Facebook today began to allow its data to be used for targeting mobile advertising in apps and websites. This is an extension of its “ad exchange layer” concept in which, rather than creating its own ad network, Facebook instead layers its demographic- and interest-based targeting on top of existing networks.

If you wanted to know how Facebook can monetize without annoying its users, then this is it.

“Advertisers set a bid they’re willing to pay Facebook to reach a certain demographic of users. Meanwhile, Facebook syncs its anonymous user IDs with several mobile ad exchanges. When a Facebook user visits one of the apps or sites where these exchanges have placements, the exchange instantly sends Facebook that user’s ID and asks if there’s a bid set to target them. If so, Facebook pays the ad exchange some portion of the bid, and the ad is shown to the user.”

More here.

And here.