As Facebook Eyes Online Deals Space, Groupon Plots Facebook Ad Blitz

As I’m sure you’ve heard by now, Facebook is looking to shake up the social ecommerce industry with yesterday’s expansion of Deals, its location-aware rewards program. The company is expected to turn Deals into a serious rival to online coupon, collective purchasing and location-based daily deal sites like Groupon and LivingSocial.

We’ve learned that Groupon, in turn, has tapped a startup called AdParlor to exclusively manage their advertising spend on Facebook. The group buying site will let AdParlor run “tens of thousands of ad variations” on the wildly popular social networking service.

In a way, Groupon will thus be increasing Facebook’s revenue, which will enable the social network juggernaut to more effectively compete against Groupon. This, of course, is a very simplistic way to look at these things – the truth is that for Groupon, like many companies, Facebook could prove to be a phenomenal platform for massive user acquisition.

In essence, AdParlor will run all of Groupon ads on the right-hand column of Facebook through a wide variety of campaigns – from generic ads driving users to sign-up for daily emails to deal-specific advertising units with a focus on driving direct sales.

Through dynamic ad creation and bid optimization, AdParlor, which has official access to the Facebook Ads API, says it manages to purchase advertising on the social networking site more effectively than any other party.

AdParlor says it already works with the some of the largest advertisers on Facebook, including companies like Ubisoft and Playfirst, and currently manages over 15 billion monthly impressions.

Kristaps Ronka, chief technology officer at AdParlor, explains how the startup will try and help Groupon grow its business by advertising on Facebook:

“We have built a powerful layer of artificial intelligence connecting the Groupon API and the Facebook Ads API. This allows us to dynamically build effective creatives for every Groupon deal and then micro-target them to the users who would be most interested in them.”

Indeed, the integration with Groupon’s API allows AdParlor to instantly create and micro-target effective ads to Facebook users the minute a deal goes live.

Let’s hope – for Groupon’s sake in particular – that the startup does a better job at not randomly throwing around Botox ads left and right.