Post by Nonie Carson, Marketing Specialist with insights from Christine Hickey, Media Manager
Facebook recently announced it is moving focus away from its real-time bidding platform, Facebook Exchange (FBX). FBX was launched in 2012 as a way for brands to marry 1st and 3rd party cookie-based data with data from Display Side Platforms (DSPs) to deliver retargeted ads on Facebook.
Since releasing FBX, Facebook has launched retargeting alternatives for advertisers such as its own API and Custom Audiences. Retargeting has remained a focus for both the social platform and brands alike as it has proven to be a highly effective way to convert potential customers, with retargeted prospects being 70% more likely to convert.
WHY IS THIS HAPPENING?
While FBX is currently a popular choice for advertisers, its device limitations pose problems for the future. With 78% of Facebook’s U.S. daily users on mobile, FBX’s desktop focus limits mobile ad and cross-device opportunities for advertisers.
Facebook directing attention away from FBX is compatible with advertiser needs, as many have already shifted their advertising efforts to Facebook’s API or Custom Audiences, which are mobile-friendly and allow retargeting directly within the social platform. Recently, FBX has dropped about half of its DSP partners, but still plans on using FBX in the future for more complex modeling and data-driven cases.
WHAT THIS MEANS for ADVERTISERS
While the move away from FBX is certainly Facebook’s attempt to capture additional ad revenue and increase focus on mobile, it also benefits brands. Facebook is focusing on more advanced device targeting such as Custom Audiences, which uses mobile ID numbers for retargeting ads instead of cookies.
With the majority of social users accessing Facebook from smartphones, this can only benefit advertisers as they seek to create more engaging mobile ad experiences and track mobile users’ actions. If brands have not already done so, this announcement by Facebook will be an incentive to focus Facebook retargeting efforts through Custom Audiences and Facebook’s own API.
WISHLIST & PREDICTIONS
At least for now, Facebook is keeping FBX in addition to its API and Custom Audiences. This makes us wonder if Facebook has future plans for FBX, or if it will shut down FBX completely. Brands should look for new innovations from Facebook, as it seems that any innovation on top of Facebook retargeting would be limited if brands could only run their campaigns through Facebook. Currently, DSPs still provide value because they continue to innovate on top of Facebook’s current product offerings.
As mobile and cross-device tracking continue to be a focus for advertisers, FBX is becoming less relevant and appealing compared to Facebook’s API and Custom Audiences. Because FBX is dependent on cookie data, it will always be limited to desktop, and Facebook has no plans to roll it out to mobile. As advertisers seek to reach more mobile users and execute multi-device campaigns, it is expected that FBX will be shut down completely in the near future.
For more info on changes to FBX, please contact your performance account team today.