Facebook seems ready to kill off FBX, the ad exchange it launched back in 2012. In recent months it has become less and less of a priority for the company, and now it seems the market's shift to mobile is hammering the final nail in FBX’s coffin.
David Fischer, Facebook's vice president of advertising, hinted at FBX's demise at Adexchanger's Industry Preview conference on Thursday, Digiday reports. He said FBX would not be a focal point going forward.
Business Insider has contacted Facebook for a comment on FBX's status.
As Ari Paparo, the CEO of the adtech company Beeswax, tweeted to summarize Fischer's presentation: "David Fischer on FBX: a) it's for desktop retargeting; b) not coming to mobile; c) there are better ways to reach FB audience. Dead."
Other members of the digital ad industry also responded to the news, mentioning that the death knell for FBX had been ringing for some time.
The rumoured death of Facebook's ad exchange reveals the difficulties of adapting desktop tech to a mobile world http://t.co/6VAFop7d6j
— Simon Birkenhead (@SimonBirkenhead) January 23, 2015
Sounds like FBX spending may have peaked, with other FB products scaling further #ip2015
— Marcus Pratt (@mawkus) January 22, 2015@aripap There are still some benefits to FBX, but I agree that it appears that the future is elsewhere.
— AdExtent (@adextent) January 22, 2015@aripap FBX being on road to death has been true for a long time especially since they nuked antonia as fbx prod lead
— todd sawicki (@sawickipedia) January 22, 2015@pkafka I feel like the primary purpose is to hurt the rest of the banner business by lowering prices.
— Ari Paparo (@aripap) January 22, 2015@aripap I think it's been dead for awhile, since Antonio left.
— Elias Guerra (@eliasguerra) January 22, 2015FBX launched as Facebook's answer to Google's DoubleClick Ad Exchange and Yahoo's RightMedia— which, incidentally, Yahoo shut down earlier this month. It was social media's first real-time-bidding ad exchange and let advertisers buy Facebook ad inventory that retargeted users based on their online browsing history. It was largely responsible for those "right-rail" ads you see on Facebook. It fulfilled a very specific marketing objective — demand fulfillment — and very early on produced some stellar results for advertisers against search campaigns.
But just three years from launch, those kinds of ads are outdated for two reasons:
News Feed Facebook's focus is on News Feed ads, not the right rail. FBX inventory did also consist of News Feed ads, but Facebook's big sell to advertisers is about the branding opportunities News Feed ads can offer as Facebook looks to take on other media like TV for ad dollars. FBX inventory was more about direct-response ads, which do not command the expensive ad rates that broadcast ads do. Elsewhere, Facebook has also been prioritizing and embarking on a hiring spree for its Atlas ad server, which allows the company to sell and deliver ads outside of the Facebook platform.
Mobile Facebook has pivoted toward becoming a mobile company. Unfortunately for ad exchanges that specialize in retargeting, cookies don't work on mobile. As Digiday points out, to overcome this, Facebook has been touting its Custom Audiences product, which uses a smartphone's unique identification number to allow advertisers to retarget people who have used their mobile apps.
Facebook's mobile ad revenue is set to completely dwarf its desktop revenue next year, and by 2018, 75% of Facebook’s users will be mobile users, according to estimates released this week from eMarketer. So it's little wonder FBX, Facebook's shiny new ad product a mere three years ago, is being sidelined.
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