Facebook May Be Getting Rid Of FBX, Social Media's First Ad Exchange

It looks as though Facebook is 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 wouldn’t be a focal point going forward.

Business Insider has contacted Facebook for a comment on FBX’s status.

As Ari Paparo, the CEO of 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.

FBX 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 the first ever social media real-time bidding (RTB) 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 out-dated 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 it 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, it has also been prioritizing and embarked 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 to 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 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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