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Previously, it only showed its ads to people with Facebook accounts, and could target individuals all around the web through data collected via Facebook. Because the company knows so much about you—your Likes, sharing history, location, relationship status, app use, and hordes of other data—it can serve up hyper-targeted, interest-based advertising.
Facebook will now collect data from web users who aren't part of the site with 1.65 billion users. Facebook's buttons and pieces of software built into websites will track your behavior, and Facebook will distribute ads from its network it thinks you'll be interested in. It's a fairly small change that puts Facebook into tighter competition with Google.
If this ad tracking seems invasive, consider there are many other companies that do the exact same thing. Google, for instance, knows similarly large amounts of personal data it collects through your browsing, emails, and searches, and uses it to show you ads the company thinks you're likely to click on.
Ads are an unavoidable part of the internet experience, and while using interests to improve targeting to get you to click on things is supposed to make ads better, seeing ads for couches after searching for a particular couch one time doesn't necessarily mean you'll want to buy it. And it can feel creepy when the couch continues to follow you across the web.
You can opt-out of Facebook's ad targeting (and other services, too) through settings on your device. On iOS devices, tap "Privacy" under "Settings." Go to "Advertising" and enable "Limit Ad Tracking." For Android users, tap "Ads" under "Google Settings" and hit "Opt-out of interest-based ads."
If you're a Facebook user, you can opt-out through your ad settings on the site.
Facebook's advertisers will be pleased with the new arrangement. It lets them expand their ad reach to non-Facebook users who might be interested in publishers, apps, and services. You probably won't even notice a difference when you're browsing, but if you don't want Facebook tracking your online behavior to target ads, be sure to opt-out.