What Is The Facebook Exchange Opportunity?

Welcome to 2013 folks, the year that programmatic marketing and big data will dominate the thoughts of smart marketers, now with the additive known as FBX, or the Facebook Exchange. Anything this big and new is bound to cause disruption, and therefore opportunity, and so let’s look at how you can take advantage of it.

What Is The Facebook Exchange (FBX)?

In some ways, FBX is another media exchange like the GDN, AdMeld, RightMedia etc., an open marketplace where display media ads are bought and sold using RTB (Real Time Bidding).

As opposed to many different domains being aggregated together in one place, the FBX offers inventory from Facebook only.

Unlike Facebook Marketplace ads that are bought on a CPC basis and utilize Facebook user profile data, FBX is bought on a dynamic CPM basis, and the buyer must bring their own data to the decision rather than use Facebook data.

Search marketers will be very familiar with the auction process as it is a second price environment, just like AdWords.

Where Is The Money Coming From Today?

Given that FBX doesn’t offer data for targeting purposes, the first money into the pot has been from the retargeting companies. They can easily use the pixels they have in place for their clients retargeting campaigns and extend that buy onto FBX. And this is happening a lot, but many other companies are following and this will dilute the retargeting dominance in the future.

Is This For Search Marketers Or Display Planners?

Well, in many ways both – think of FBX as an equal opportunity media source.

When Facebook Marketplace ads began, it was the media planners that seized the early opportunity; but, as the buying model shifted from CPM to CPC, search marketers stepped up and stole the show.

Search marketers built the better tools and had the more relevant experience and quickly put their display colleagues to shame. I was running a global display media team when this happened, and I have to reluctantly admit I saw the budget disappear from under my nose before I realized it!

The difference with FBX, though, is that you need to access the inventory through a DSP, or a company that uses DSP technology. We have discussed previously in this column about how a real-time CPM buy seems to scare off the search marketers, and so perhaps FBX is the media buyers revenge?

Search Retargeting On FBX

When we created the idea of search retargeting at Chango, it was the first time that display media and search marketing truly overlapped. Up until then, we, as an industry, were guilty of propagating the idea that somehow search + display was this magical 1+1=3 model, without really ever having more than anecdotal data.

Search retargeting, though, took that wonderful intent signal and combined it with the scale and affordability of display, and finally delivered on the promise. Now, as one of the ad exchange partners, our search data can be paired with Facebook. For us media and data geeks, that’s more than a little cool!

For the search marketer, that means that perhaps they can win on this battleground, and make the case that it is search data providing the smarts, and FBX, the reach. I certainly think that can be the case; but, given that most search retargeting is still bought as media and not search, I do wonder.

Does FBX Matter? Could I Not Just Ignore It For Now?!

Nope, sorry! Unlike the introduction of just another media exchange, FBX potentially adds 25% to the real-time media available, and results are showing that consumers are converting quicker, with fewer impressions, and at a considerably lower CPM than elsewhere. It kind of has everything going for it right now.

There are a number of ways to take advantage of it. I would advise marketers to start in two ways. First, look at your site retargeting programs and extend them on to FBX – with the media price alone, you will increase the efficiency. And secondly, add prospecting to the mix by excluding your existing site visitors from the buy, and finding new individuals using search data.

Search and social in one place? Now that’s a huge opportunity.

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: Channel: Social | Facebook | Search & Display


About The Author: is the Chief Strategy Officer at Chango, the solution to programmatic marketing and "big data", and is based in San Francisco and London. You can follow him on Twitter @DaxHamman.

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  • http://twitter.com/DaxHamman Dax Hamman

    Thanks for the addition Christina – I think triggit are becoming the new comment spammers! :)

    I understand that triggit has not had success with search data in the past, many haven’t, but Chango uniquely is the 2nd largest source of search data (Google being the first) and our partners see enormous success, particularly when moving from partners who don’t have it.

  • http://www.triggit.com/ Christina Park

    What can I say – we like talking about our data points. Would love to hear more about your results soon!

  • http://www.facebook.com/linnxx Linn Björklund Pettersson

    Thanks for a great post, as usual! Unfortunately there are only a few companies working with FBX in Germany so far, but a lot of the retargeting agencies seem to be testing it. Hoping to get in on the act ASAP, seems like a lot of fun.


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