And how to opt out.
Image by Robert Galbraith / Reuters
One of the major ways that Facebook sells ads now is through its ad exchange, FBX. You know that weird feeling you get when you were just searching for say, Blu Dot couches, and suddenly you see ads for Blu Dot popping up all across the web? Facebook's ad exchange works similarly — you look at stuff on the web, tracking cookies follow you, and then an advertiser can target you with an ad when you go to Facebook, like when you didn't follow through on buying something.
The process looks like this, as diagrammed by BMO Capital Markets analyst Dan Salmon:
Source: BMO Capital Markets / via: businessinsider.com
Now, through an agreement with the Better Business Bureau's Advertising Self-Regulatory Council, Facebook will display an AdChoices icon whenever an ad is targeted at you through tracking services. The icon looks like this:
