Facebook Exchange, a platform for showing ads to Facebook users based on their Web browsing history outside the social network, is already a dominant player in the ad retargeting space.
Facebook Exchange, or FBX, accounted for 45% of clicks on retargeted Web ads globally at the end of December 2012, according to data released by L2 Think Tank this month.
Launched in mid-2012, Facebook Exchange gives advertisers a powerful tool for reaching relevant audiences.
Say you have been shopping for a living room sofa on a site called Sofa World. The e-commerce site could later come to Facebook and buy sofa ads to target you in real-time, as you browse Facebook a week later (the sofa ads might appear in your Facebook news feed or on the right-rail of the site). The purpose would be to get you to click and bring you back to the Sofa World site.
This is all accomplished with the help of third-party data collectors that Facebook has paired up with to power FBX. These include BlueKai, Acxiom, Epsilon, and Datalogix. These four vendors also can bring offline data to bear, such as names and emails collected via in-store loyalty card programs.
During Facebook’s second quarter earnings call this year — when Facebook reported its best-performing ad revenue ever — Sheryl Sandberg said that advertisers are very excited about Facebook’s data partnerships bridging the offline-online divide.
On the Web as a whole, the idea of targeting ads based on user’s browsing history helped spawn the still-burgeoning ad tech industry. But Facebook’s entry into the space has raised the competitive stakes for retargeting, and may herald an era in which more big-name Internet properties launch similar or more sophisticated retargeting solutions.
Twitter announced in July 2013 that it was beta-testing its own retargeted ad product.
While more recent data isn’t available, if FBX continued growing at the same rate year-to-date as it did through December 2012, it would account for well over 60% of total retargeted clicks today.
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