AdRoll CMO and president Adam Berke acknowledges that FBX has evolved since its inception. Since the advent of Custom Audiences, FBX is no longer the only way for advertisers to apply their first-party data to Facebook inventory.
“In the longer term, marketers will always want to bring their own data sets to Facebook whether it be first-party, third-party or some combo of data sets and there will always be some segment of advertisers that will want to be able to apply their own customized bidding algorithms,” Berke said, adding that these capabilities are most easily enabled through FBX’s RTB environment.
“Finally, the beauty of RTB is that since it's an open standard, it allows you to unify your campaigns across platforms,” Berke said. “For example, advertisers often want to apply global frequency caps regardless of where they serve the ad. With FBX, it's easy for an advertiser to say, ‘I only want to serve five impressions per person per day whether that's on Facebook or other website and have that type of restraint applied to their campaigns across inventory sources.’”
Jeff Green, CEO and founder of The Trade Desk – which was also an FBX alpha partner – said Facebook has more inventory than most publishers, and faces similar challenges on how to monetize it. The open exchange concept is valuable because it helps support "economic principles of liquidity and transparency."
"Regardless of the news or rumors coming out about Facebook, there are market forces that should signal to them that the auction will overtake direct sales," he said. "Any step away is a step backward."
Still, FBX's value has changed and continues to change. Consequently, so does its place in the Facebook ad stack. And of late, it seems Facebook’s focus is on nurturing its Custom Audiences products, whose functions increasingly overlap with FBX’s, or rolling out its Atlas ad serving and measurement product to more partners. (Fischer wouldn’t reveal how many clients use Atlas.)
The Big Video Opportunity
Facebook is also becoming more of a content provider, particularly with video, where Facebook views itself as a discovery mechanism – one of the reasons it eschews pre-roll but enables post-roll, notably with its partnership with Verizon and the NFL through which it hosts football clips in the news feed.
“People are discovering videos as they scroll through their news feed. So seeing the video you’re discovering first is really important, as opposed to when you go watch a specific video the way you might on YouTube,” Fischer said.
On the video content front, there have been reports that Facebook hopes to attract YouTube creators. What could it offer to this crowd?
“Unparalleled distribution opportunities in terms of the number of people on our platform, the amount of time people spend – more than five minutes on mobile and more than nine minutes on desktop – is very compelling,” Fischer said. “And when people come to Facebook, they’re in discovery mode, so getting onto [the] news feed and being discovered there is very powerful.”
Facebook is also increasingly aware of its importance to publishers, primarily as a referral engine, and developments in this front could have advertising implications. (For instance, if Facebook were to host articles rather than direct users to publisher pages, how would this affect purchase of ads and distribution of ad revenue?)
So given all of these grand initiatives, how important is FBX?
“It’s most effective with straight-up retargeting capabilities,” Fischer told AdExchanger.
FBX is only a small part of Facebook’s ad tech and provides only desktop inventory on Facebook. Yahoo’s Right Media exchange expanded beyond Yahoo-owned sites, but that inventory quality degraded to the point where Yahoo pulled the plug.
AdRoll’s Berke, when asked about the current quality of FBX inventory and whether it was buying the same amounts for clients as it did when the exchange first came about, simply stated: “Facebook is a crucial inventory source for us and our spend continues to grow there because it performs and provides a platform for us to build on in a variety of ways to deliver value for our customers.”