Facebook exchange overview - november 2012

Overview of the Facebook Exchange (FBX)

Brian GrothNovember 2012

[I created this presentation from a variety of public sources as a way to learn more about the FBX. See the appendix for the list of those sources – Brian Groth]

Key Takeaways

1. 3rd party data targeting for Facebook ads2. Desirable & massive RTB inventory3. Performance looks promising

What is it?

The FBX Ad

URL, not Page Above the fold All Facebook web users CPM Served by Facebook Not in the Newsfeed Not an IAB standard “…is not social advertising”

No Facebook user data Re-marketing & behaviorally

targeted Advertiser & DSP provide data DSPs provide day-parting, etc. Working hours inventory Over 25% of US inventory Campaigns launch within one

hour

Examples

How does it work?

techmeme.com

A cookie gets created on my PC

Meanwhile the advertiser and DSP create an ad to be displayed on Facebook

The cookie is used to anonymously identify me and a bid is made in real-time to show me an ad

I click on the ad and am taken back to the advertiser’s site

Is It Working?

FBX Performance

“Our performance so far in the (Facebook) Exchange is doing better than the Google Exchange”

Carolyn EversonVP Global Marketing Solutions, Facebook

4x CTR

2x Conv.

1/3 Avg CPA

FBX Versus Other Ad Exchanges

Ad Inventory Throughout The Day

FBX Traditional RTB

Evening

Afternoon

Morning

Facebook

All Others

US Display Inventory

FBX Partners

Key Differentiators per the 16 FBX Partners: Cost: $0-$30k Service: 5 minutes – 6 weeks Value Add: Facebook Ad API

Any Questions?

APPENDIX

Frequently Asked Questions

1. Q: Will Facebook open all their ad inventory to the exchange? A: Unlikely since that would mean admitting that Facebook is just another web publisher and Facebook wants to be seen as changing the world and doing new and different things

2. Q: Are these small Facebook ads really better than a standard 250x300 banner ad?A: Arguably, a single user checks Facebook multiple times a day, not just in the morning or evening like many web sites. This is because it’s a communications tool, not a place to search and move on or a place to read an article.

3. Q: Is this an extension of the Facebook Ads API?A: No, the Ad APIs are for building ad creation and management solutions for social ads on Facebook.

can drive direct response goals

What is the Facebook Exchange (FBX)?With the Facebook Exchange, advertisers and agencies

for remarketing and behavioral targeted audience buys

Segment

Differentiated

Purpose

Promise

through Demand-Side Platforms or Agency Trading Desks to reach their audience on Facebook with user intent data from outside of Facebook

ResultsSource / Partner Insights

TellApart Customers who do click on the Facebook ads end up spending $159 per average order, compared to $163 for Google.

Triggit one-fifth the cost per acquisition of non-Facebook RTB ad campaigns4x the return-on-ad-spend;2.2x higher than traditional RTB, and conversion lift has been 18 to 30% higher than a control group of users who did not see FBX ads

Xaxis (WPP) fast-food restaurant, which used FBX to drive new orders while lowering cost-per-order by 22 percent compared with similar campaigns that didn’t run on the exchange.

AdRoll Average ROI of 16x

The Trading Desk One client is achieving conversions at half the CPA of other sources of inventory.

AppNexus (for trading desk platform Accordant)

Reduced advertisers’ CPAs by as much as 25%30% increase in audience reach while maintaining key metrics such as impression to conversion rates.

Bizo 300% “better” cost-per-leads, at prices 66 to 80% less than “an equivalent high-quality display impression.”

TellApart 10-20x ROI

Comparing Facebook Exchange Partners

CostMinimum spend

Customer ServiceTime to get started

Value Add+FB Ads API

AdRoll $0 < 1 day

Criteo Bidded cost-per-click model with clicks beginning at 15 cents. 4 – 6 weeks

DataXu $20,000-$25,000 48 hours+

Kenshoo $10,000 a month total social media spend 48 hours+

MediaMath $25,000 1 – 2 days

Nanigans $30,000 monthly Facebook ad spend minimum (not limited to FBX buys)

“depends” Yes

Optimal $10,000 spend a month across all ad types 5 minutes Yes

Perfect Audience Free for two weeks, then $25/week minimum budget 7 minutes

Rocket Fuel $20,000 per campaign 3 days Yes

TellApart Retailers pay when a shopper clicks a TellApart served ad and buys. “very rapid”

TheTradeDesk $0 1 day+

Triggit $10,000 minimum spend for advertisers that see about 500,000 UV/month

1 week

Turn $0 48 hours Yes

Xaxis “case by case basis” 24 hours

X+1 About $25,000 per month 1 week This

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Steps to how the FBX works

1. A user visits a travel site that’s hired a DSP rigged up with Facebook Exchange2. A cookie is dropped on that user’s computer, typically when they’ve shown purchase

intent3. If the user fails to make a purchase, or the advertiser wants to market to them more,

the DSP contacts Facebook and gives them the user they wish to target’s anonymous User ID

4. The advertiser pre-loads creative for ads that would target that user5. When the user visits Facebook it recognizes the cookie dropped by the DSP6. The DSP is notified and allowed to make a real-time bid to show the user ads7. The DSPs with the highest bids get their highly-targeted ads shown to the user8. If the user disapproves of being shown the ad and ‘X’s it out, they’re shown a link to

the DSP where they can opt out of future Facebook Exchange ads

• February 2012: http://www.comscore.com/Insights/Presentations_and_Whitepapers/2012/2012_US_Digital_Future_in_Focus and http://www.poynter.org/latest-news/mediawire/162949/facebook-delivers-1-of-every-4-online-display-ads/

• June 13, 2012: Initial announcement of FBX• http://techcrunch.com/2012/06/13/facebook-exchange/ • http://allthingsd.com/20120613/whats-a-facebook-ad-exchange-a-partial-explainer/• http://www.bloomberg.com/news/2012-06-13/facebook-to-debut-real-time-bidding-for-advertising.html

• June 20, 2012: http://www.businessinsider.com/facebooks-new-rtb-ad-exchange-is-about-data-not-effectiveness-2012-6 • September 11, 2012: http://www.digiday.com/platforms/how-facebook-just-became-critical-for-b2b/ • September 13, 2012: FBX exited the beta phase

• http://www.facebook-studio.com/news/item/introducing-facebook-exchange• https://www.facebook-studio.com/fbassets/resource/66/FacebookExchange20120913• http://allfacebook.com/facebook-exchange-officially-out-of-beta_b99565 • http://allthingsd.com/20120913/facebook-throws-a-coming-out-party-for-its-ad-exchange/• http://www.adexchanger.com/ad-exchange-news/fbx-ftw-partners-share-results-as-facebook-exchange-exits-beta/ • http://blog.appnexus.com/2012/the-world-of-display-advertising-just-got-a-lot-bigger-2/ • http://blog.triggit.com/facebook-exchange/ and http://triggit.com/fbx-insights-around-speed • http://tellapart.com/early-results-from-facebook-exchange-show-strong-roi • http://www.adweek.com/news/technology/buyers-bullish-facebook-exchange-143658

• September 27, 2012: http://adage.com/article/digitalnext/viewable-impressions-digital-s-future-ready/237439/ • October 5, 2012: http://allthingsd.com/20121005/why-the-ad-tech-guys-are-going-nuts-about-facebook-exchange-and-why-that-matters/• October 15, 2012: http://www.mediapost.com/publications/article/185176/facebook-exchange-adopts-ad-verification-intent-r.html • October 23, 2012: http://www.forbes.com/sites/afontevecchia/2012/10/23/facebook-exchange-two-birds-with-one-stone-challenge-google-drive-revenues/ • October 25, 2012:

• http://www.insidefacebook.com/2012/10/25/facebook-exchange-what-it-is-and-who-to-work-with-to-get-started/ • http://www.valuewalk.com/2012/10/facebook-inc-fb-ad-exchange-fbx-step-by-step-analysis/

• November 5, 2012: AdWeek and Triggit articles with FBX results• http://www.adweek.com/news/technology/sitdown-144982• http://finance.yahoo.com/news/facebooks-ad-exchange-quadrupled-market-134300969.html • http://blog.triggit.com/why-the-facebook-exchange-ends-the-viewability-debate/ • http://www.adweek.com/news/technology/turn-builds-out-facebook-ad-capabilities-144979 • http://www.webpronews.com/facebook-facebook-exchange-is-doing-better-than-google-exchange-2012-11

• Facebook Resources: https://apps.facebook.com/pmddirectory/ and https://fbcdn-dragon-a.akamaihd.net/cfs-ak-snc6/85001/143/446672752021203-/Marketing_API_Guide_US.pdf

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