Facebook is the largest social network in world and therefore has access to a database of millions upon millions of consumers, and should therefore be the ultimate platform for advertisers.

In 2010 advertisers started to cotton on to the potential of ‘social advertising’, as advertising spend on Facebook reached $605 million and is predicted to rise to $4 billion worldwide for 2011.

Now Facebook is trying to improve the way in which it delivers ads by targeting real-time conversations in order to show relevant ads, potentially seconds after someone has changed their status in order to try and catch that person in buying / decision-making mode.

Earlier this month Facebook began testing these real-time ads on 1% of its worldwide users, which equates to a modest 6 million people across the world.

In the recent article on AdAge.com it mentions how Facebook will be tweaking its algorthim to target conversations in real-time.

It talks about the principle and how “Keywords are a small part of that equation, but Facebook says sometimes keywords aren’t even used. The company said delivering ads based on user conversations is a complex algorithm continuously perfected and changed. The real aim of this test is to figure out if those kinds of ads can be served at split-second speed, as soon as the user makes a statement that is a match for an ad in the system.”

Hopefully this means that Facebook will be tactfully and creatively targeting the ads, as simply using a system based on keywords could back fire if the context in which the words are used is not taken into consideration.

For instance, if someone states that they “fancy a cold beer” on a warm day, then an advert for a cold alcoholic beverage would be appropriate, but if they were to say something about an “alcohol anonymous meeting”, for example, then that would not be so appropriate.

Facebook also needs to be careful that they do not intimidate users into not sharing information at all.

They may find that some users are perturbed by the ‘Big Brother’ concept of the ads and stop sharing this sort of information in their status updates altogether.