Facebook links to Chinese businesses(2)

Google, which remains the largest player in the online advertising sector in the United States, has a similar service called DoubleClick Ad Exchange. Amazon.com Inc, US biggest online retailer, has also launched its own RTB services, says a report in Adweek earlier this month.

Huang says that the revenue earned by Facebook from traditional display advertisements, measured by cost per thousand price, is 5 to 10 times less than vertical websites. She adds that it is also the reason why the US-based social networking company launched Facebook Exchange to improve the relevance of its advertising.

An increasingly large proportion of display advertisement sales will be generated by the RTB technology. RTB will account for 27 percent, or about $5.08 billion, of the $18.9 billion marketers are expected to spend on online display advertisement in 2015 in the United States, according to market research company IDC.

RTB generated sales of $1.07 billion last year, accounting for 9.8 percent of total display sales in the US.

Figures on RTB sales in China are not available, as the technology is still not widely used in the country.

"Those who want to try RTB advertising first on Facebook are exporters and travel companies," said Huang, adding that some of the company's corporate customers have shown willingness to try out Facebook.

Facebook, which had 1 billion monthly active users by Sept 30, earned $3.15 billion from advertising last year. However, its share prices have tumbled as investors' think it is not generating enough revenues despite the huge user numbers.

Carlos Kirjner, an analyst with Bernstein Research, estimated that Facebook Exchange is on course to generate annual revenues of $1 billion. He also estimates that the service could take up to one third to half of the whole market for advertising generated by RTB.

Facebook Chief Operating Officer Sheryl Sandberg earlier told investors that she believed the global RTB market was somewhere in the vicinity of $2 billion.

In June, Facebook and US researcher ComScore Inc said in a joint report that advertisements on social networking sites encourage users to buy products from brick-and-mortar stores as well as online platforms.

However, in a separate poll by Reuters and Ipsos, results showed that just one in five people on Facebook have bought products because of the advertising or comments they saw on the website.

Other than Facebook, iPinYou has already connected with the RTB platforms of Alibaba Group Holding Ltd, Tencent Holdings Ltd, and 14 Chinese online video companies, Huang said. She added that with the technology, the cost for an online video provider to get a new customer was just half of the traditional way.

IPinYou has about 100 customers, most of whom are in industries like e-commerce, finance, travel, car, and fast moving consuming goods.