In February, more than a third of all online-display ads in the U.S. appeared on Facebook, according to comScore Inc. That's more than three times as many as its closest rival, Yahoo Inc., had.
But Facebook doesn't come close to capturing a third of the online-ad budgets of major marketers, partly because its ad rates are relatively low, and also because of its hard-to-navigate in-house systems for buying ads.
Enter a new set of specialized Facebook agencies that seek to offer an easier way to buy ads on the social-networking site. The emergence of more than a dozen firms, including Blinq Media LLC, Kenshoo Ltd. and Web-trends Inc., follows a move by Facebook in 2009 to start opening direct access to its internal ad systems to select outsiders.
The Facebook agencies sell marketers the ability to manage the buying of thousands of different versions of their ads, with varying text and images. They also make it easier for advertisers to buy ads targeted at niche groups of consumers, based on their ages, locations, interests and other factors. The agencies also offer tools that track the performance of an ad campaign, such as how many users click on the ads or become fans of the brand on Facebook.
Blinq Media Chief Executive Dave Williams started his firm in 2008, predicting that a new advertising "ecosystem" would emerge tied to Facebook, and that marketers would need help to buy ads on the site, just as new agencies cropped up about a decade ago to help the marketers buy ads on search engines.
"With search, advertisers can match their ads to user intent. With Facebook, advertisers match their ads to user interests," said Mr. Williams, who previously co-founded the search marketing firm 360i, now owned by Dentsu Inc. "It's like fishing."
Facebook said it welcomes the specialized agencies because they bring in new customers and can handle large-scale campaigns. "The ecosystem that these third parties are developing and building on Facebook is healthy and of benefit to everyone," said David Fischer, Facebook's vice president of advertising and global operations. Already, he said, he is seeing signs that agencies are encouraging big marketers to spend more.
While Facebook's own ad-sales team sells premium ads directly to big marketers, much of its inventory is sold through a self-service tool built by the website. The tool lets marketers create an ad by manually inserting text and images, then selecting targeting features, such as the location, age and interests of users they want to reach.
But Facebook's in-house system is unwieldy, ad executives say, especially for big brands, which often want to place thousands of versions of their ads, with different texts and images, to target different audiences.
"It wasn't built with large advertisers in mind," said Michael Brunick, vice president of strategic partnerships at Interpublic Group of Cos.' digital-ad buying unit Cadreon, whose clients include Chrysler Group LLC and Verizon Communications Inc. Mr. Brunick said his agency doesn't buy any Facebook campaigns for its clients at present.
"The infrastructure is still in its infancy," said Rob Griffin, a senior vice president at Havas Digital, part of French advertising group Havas SA. "It makes working with them very challenging." Havas Digital recently signed a deal to work with Blinq.
Deals website Groupon Inc. said it was placing its Facebook ads manually until four months ago, but could turn out only a couple of dozen different ads a day using the self-service system. Now it has hired Facebook specialist AdParlor Inc. to navigate the system and can churn out thousands of ads a day targeting narrow-niche demographics like 27-year-old women in South Carolina who like yoga.
Technology from Blinq Media helped restaurant chain Buffalo Wild Wings identify groups of likely customers beyond its ordinary target audience of college football fans who would respond to its campaign. That tripled the campaign's return on investment, said David Rollo, senior vice president of digital and social strategy at 22squared, an agency that brought in Blinq for help.
While the specialized agencies can help with the problem of placing ads, it isn't clear whether that will do much to raise ad rates on the site, which have been damped by a flood of inventory and marketers' wariness about the effectiveness of ads on such sites. However, by increasing demand and making it easier to target ads and measure their performance, the specialized agencies could improve Facebook's rate equation.
Some of the smaller agencies have ended up selling their services to larger ones. Blinq Media has attracted business from firms including Havas Digital, Publicis Groupe SA's Moxie Interactive and privately held 22squared.
Some large ad companies, however, say they would like their own direct access to Facebook's systems so that they can build ad-buying tools that they might merge into their existing systems, and better evaluate how ads on other websites compare with Facebook ads. "We want to have the relationship with Facebook directly," said Cadreon's Mr. Brunick.
Facebook's Mr. Fischer said his company plans to expand access to its technical infrastructure, but the small, technologically oriented agencies were a natural place to start. "They are able to move fast," he said
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