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Is FBX Living up to the Hype?

Last week, Skai’s Director of Marketing Research, Josh Dreller, moderated a panel at OMMA RTB in Chicago. The event was hosted at The Metropolitan Club, aka the 66th floor of The Willis Tower (forever known as The Sears Tower to Chicagoans who refuse to acknowledge the name change).

Set against sprawling views of The Windy City and looking out at an audience of 200 practitioners, Josh led the session: Is Facebook FBX Living Up To the Hype? With the help of panelists from ChoiceStream, IgnitionOne, Dstillery, and VivaKi, Josh took the RTB (that’s real-time bidding) community down the path of exploring how the Facebook Exchange (FBX – because we can’t get enough of 3 letter acronyms) has already made a big splash in the display marketplace, just one year in.

The dynamic bunch discussed how FBX has ushered in a new era of RTB, bringing massive quantities of inventory into the market with efforts to solve some of RTB’s enduring challenges of transparency, targeting accuracy, and inventory quality.

To add a bit more color: there are currently, at any time, 1.3 million ads a second flowing through the RTB space. Rather than focusing on the particular inventory source for these ads, practitioners have really been conditioned to think of RTB on the impression-by-impression basis. Historically, as RTB has grown, there has always been bunch of inventory available to cherry pick from.

There are 3 primary differences with the FBX pipe compared to other supply side partners (SSPs). The following are the panelists’ takes on FBX and its effectiveness after a year in the marketplace:

  1. How good is it? Does it perform? – The short answer is yes. Because there is so much inventory, ad rates are very efficient. We’re still at a point where this source is still new and growing, so it’s not saturated by bidders yet. (About 20% of all display ads are on FB today.) In an auction-based media environment, you get lower prices when supply outweighs demand; eventually, that will change as FBX continues to grow and mature, but it will still be less expensive than buying direct.
  2. Is it social or not? – According to social experts, yes. While the nature of display ads is not inherently “social”, the way the ads are created for FBX has much more of a social appeal than how ads would otherwise operate on standard RTB. The ads on FBX are more catered to the audience. They should be bought and sold like display, but there should be social messaging–short and digestible.
  3. How does FBX fit within the 3 historic challenges of RTB?
    • Transparency – FBX is very transparent. One of the things buyers like about FBX is that they know their ads will run on Facebook. People who would otherwise be apprehensive about where their RTB ads might be running are more willing to try RTB when it’s tied to the Facebook name.
    • Targeting Accuracy – Though no one disputes that Facebook has the best data out there, it hasn’t been as quick to share as many would like. Facebook still owns the data, controls it and is (understandably) cautious of giving too much away, as the company is managing so much personal information. #privacyissues
    •  Inventory Quality – Marketers feel a sense of quality control on FBX – what you are buying is inherently Facebook. That said, any Social advertiser needs to remember there is user generated content that may surround your ads, specifically messaging you might not typically promote/support. The panelists were in agreement that Facebook could certainly take more measures to ensure ads for, college courses, for instance, aren’t sandwiched between your 16-year old cousin posting #selfies and your long lost “friend” from high school sharing a political rant.

Moral of the story? FBX is a force to be reckoned with and will continue to dominate in the RTB space.

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