There is a lot of speculation around the longevity of the Facebook Exchange and if it will continue to be supported by the social media giant. Industry insiders speculate that it will be shut down in 2015, while other vendors with close ties to Facebook say that it depends on who you talk to. According to them, the overall consensus within Facebook’s walls is that the FBX is “full steam ahead” for the foreseeable future. What does this all mean for marketers? Anvil’s paid media team has the pros, cons, and projections for FBX and how we think things will shake out.
Why Kill FBX?
One compelling point on why experts speculate that Facebook will be discontinuing the exchange network is because it is heavily skewed towards desktop traffic and right-hand sidebar ads. The original intent for FBX was to provide a way to remarket ads on desktop, and FBX gave marketers a high-performing channel to achieve this.
If you’ve read any digital trend headline in the past 2 years (at the least) you know that mobile is the future and everyone from your grandma to your 2-year old nephew is browsing on a mobile device. For this reason alone it makes sense for Facebook to drop FBX support and focus on ad products that are more future-facing. Facebook’s current ad UI and inventory emphasize the mobile experience and support this point, and many marketers are seeing better performance on them.
Second, FBX’s demise could also be alluded to by the fact that Facebook recently dropped more than 15 vendors from their FBX platform including Rocket Fuel, Adobe, and Quantcast. This is a direct correlation with the slow, but steady death of the Facebook exchange.
Experts speculate that in addition to a shift in focus to mobile, Facebook also is making a play at keeping ownership of user data. With FBX, 3rd parties were able to tap into the exchange and keep behavioral data to use across their own internal and external networks. With Facebook’s own platform, the company will be able to retain all of the data and use it to inform and better package their own ad products and targeting.
The Future of FBX
As to what the future holds for FBX, Anvil’s Paid Media Strategist Michael Knight and Paid Media Specialist Pascal Inderabudhi have two takes:
Michael Knight, Paid Media Strategist, Point of View on the Facebook Exchange
It’s hard to say for sure what Facebook’s end goal actually is, as I could see them change the FBX platform instead of killing it off. What if Facebook turned a desktop heavy FBX into a news feed retargeting platform? It would make perfect sense as it already has the structure in place, but would just have to no longer support right-side ads that are inherently desktop focused. Even if that doesn’t happen any time soon, I don’t think the Facebook Exchange would shut down completely, at least in the near future, since it is a revenue stream they need.
Besides Facebook wanting and needing revenue, the other simple reason for the FBX to not shut down is the positive data that comes through the program. During the last FBX News Feed campaign, I saw a click-through-rate of 1.25%, which is about the same as a custom audience campaign directly through Facebook. On the flip-side, the right-hand side ads campaign did perform poorly with only a 0.10% CTR, which then continues to support the story that right-side ads may and probably should die out in 2015.
This could be how FBX does “die off.” Maybe not that the Facebook Exchange dies completely, but that it gets a big enough facelift that it can’t be viewed the same way as that “old FBX platform everyone used to run ads on.” As the News Feed continues to highlight where Facebook’s advertising strength lies and where Facebook will dedicate their future advertising endeavors. We may see the exchange become a news feed only, mobile-friendly platform, while we watch right-side ads that are currently more common to FBX for desktop, drift into the sunset of long-lost products.
So, with all the speculation, rumors, and predictions, this entire notion of the FBX dying completely could just mean a new direction and complete transition to a News Feed only ad platform to continue to drive both desktop and mobile engagement through one dedicated ad type.
In my opinion, this would be the best and simplest solution that would solve almost all the world’s Facebook advertising problems.
Pascal Inderabudhi, Paid Media Specialist, Point of View on the Facebook Exchange
I agree with Michael’s assessment, but I lean further towards team “die off.”
FBX’s right-rail ads are already dated, and the News Feed ads on FBX make up only a small portion of their ad inventory (as well as FB’s total revenue). According to eMarketer, by 2018 75% of Facebook’s users will be mobile users, and Facebook’s mobile ad revenue already dwarfs its desktop revenue. While use in the US may be decreasing with younger generations latching onto messaging and image apps like Snapchat and Instagram, Facebook’s international base continues to grow and is increasingly mobile as well.
Additionally, FBX’s strength is its retargeting capability, but for many ad exchanges cookies do not work on mobile. Digiday points out that Facebook is using its Custom Audiences to retarget based on smartphone ID numbers to retarget on mobile apps, rendering FBX useless.
One strong reason to use FBX are for marketing campaigns that have complex and dynamic creative. When dealing with hundreds of segments and specific ad matching and sequencing, the logistics of trying to implement on Facebook’s platform (Power Editor) can be cumbersome. Until Facebook upgrades its UI to make management on the platform easier than a 3rd party’s, then there’s still reason for marketer’s to use FBX.
In the same way that Google shutters support for its once-proven products (RIP Google Reader), I can see Facebook letting off support for FBX gradually, but substituting it with superior product.
The Team’s Final Thoughts
In the end, whether in-house or in an agency, you can never grow too attached to the tools and services that drive your advertising forward as they will continue to change and adapt to the market or die off completely based on platforms changing in conjunction with the latest tech and industry trends, ultimately creating the cycle of advertising strategies.
No matter your opinion on the FBX, one way or another, it will change, so being prepared and having a forward-thinking plan is the right approach.
Featured Image: gratisography.com, Creative Commons