“Going mobile makes sense” - Facebook axes exchange

Pippa Chambers
By Pippa Chambers | 26 May 2016

Just as Facebook revealed its viewers spend an average of 31 seconds in its Canvas ads, it has also said it's shutting down its desktop-based ad retargeting exchange, as the social platform continues to re-route advertisers to mobile.

The Facebook Exchange (FBX) launched in 2012, but four years later it says it has now begun moving clients and ad tech partners over to newer products.

Facebook says consumer usage has primarily moved to mobile and that products such as Dynamic Ads for Carousel, video campaigns and custom audiences have mobile retargeting features that are not supported by exchange.

Speaking to AdNews, CEO of Australian Premium Advertising Exchange (APEX Advertising), Pippa Leary, who spoke at last week's Media Summit, says as most of Facebook's audience is mobile, it makes sense.

She says for premium publishers which have far better desktop real estate - like wrap arounds, home page takeovers and even the humble island ad (MREC), these are effective ad units with high CPM - as they can create true brand awareness. “They have so much more impact,” she says.

“I think this move by Facebook is an admission that its desktop exchange was really just a remnant/acquisition product and their focus really is in mobile.”

FBX didn't reach

Group performance and technology director at Bohemia, Sebastian Graham, says Facebook’s decision to shut down the FBX exchange shouldn't cause any significant issues for most advertisers.

“The vast majority of Facebook's revenue and inventory is on mobile, where FBX didn’t reach,” he says.

He adds that the best practice for Facebook over the last few years has been to treat the buy as a specific strategy with creative and targeting that recognises the unique context of the platform.

“Given FBX hasn't really supported well, I anticipate that only smaller e-commerce providers will be impacted by this change.”

A controversial move?

GroupM's director of technical operations, Timothy Whitfield, says during a face-to-face interview with the head of identity from Facebook last month, it was clear that they are “doubling down” on their Facebook audience network.

“This new product was only launched late 2015 and it’s already tipped as being a new billion dollar industry. The new algorithm by Facebook includes the ability to adjust (downwards) the amount of advertising on their mobile app to improve the user experience," Whitfield says.

“This is a controversial move as having fewer ads will lead to lower short-term profit. However, their view, and it makes sense, is that they need to find a balance between advertising and user experience.”

Matt Idema, VP of monetisation product marketing for Facebook says mobile is now a necessary component of effective marketing campaigns ands is helping millions of businesses understand their customers' purchase path across devices.
“Dynamic Ads and Custom Audiences have mobile at their core and are delivering excellent results for businesses, so Facebook Exchange spending has shifted towards those solutions,” he says.

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