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What Is The Facebook Exchange Opportunity?

In some ways, facebook exchange 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). Via Search Engine Land

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What Is The Facebook Exchange Opportunity?

  1. 1. What Is The Facebook Exchange Opportunity?by Dax HammanWelcome to 2013 folks, the year that programmatic marketing and big data will dominate the thoughts of smart marketers, now with the additive knownas 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 youcan 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 andsold 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, andthe 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 thepixels they have in place for their clients retargeting campaigns and extend that buy onto FBX. And this is happening a lot, but many other companiesare 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 toCPC, 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 globaldisplay 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 havediscussed 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 buyersrevenge?Search Retargeting On FBXWhen we created the idea of search retargeting at Chango, it was the first time that display media and search marketing truly overlapped. Up untilthen, we, as an industry, were guilty of propagating the idea that somehow search + display was this magical 1+1=3 model, without really ever havingmore 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 thepromise. 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 alittle 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, andFBX, 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 areshowing that consumers are converting quicker, with fewer impressions, and at a considerably lower CPM than elsewhere. It kind of has everythinggoing 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 andextend them on to FBX – with the media price alone, you will increase the efficiency. And secondly, add prospecting to the mix by excluding yourexisting 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.