Quantcast, the company best known for its web traffic measurement business, has struck a deal to start serving ads inside Facebook — and CEO Konrad Feldman believes he’s going to be a lot better at it than his competitors.
His secret formula is counterintuitive: He’s going to pay more than his competitors for ads (in many cases); and he’s going to do less “retargeting” than they do.
That’s the reverse proposition of many Facebook media buyers, who offer clients the cheapest possible ad impressions, often based on retargeting users who have been shopping elsewhere before they arrived on Facebook.
Quantcast’s results — he’s already got about 100 clients, like Palms Casino Resort in Las Vegas, on Facebook since the deal was announced earlier this month — will sort the wheat from the chaff, Feldman says.
Quantcast is the 18th member of Facebook’s ad exchange, FBX.
The exchange works by serving ads to Facebook users who have been shopping on other web sites — for shoes, let’s say — before they arrive in Facebook. Once on Facebook, users start to see ads for shoes, perhaps from competing shoe sites. It’s called “retargeting,” because you’re being targeted twice: once when you browsed for shoes on the web, and then again when you enter Facebook. Advertisers love it because they believe retargeted shoppers are the kind most likely to buy more stuff.
Quantcast, however, has little interest in retargeting, Feldman says, because those impressions are often poor quality. Instead, Quantcast will sift its vast database of user information to identify user profiles and audiences mostly likely to buy his clients’ products. Those users will then be targeted afresh in Facebook. “Most of our business is prospecting not retargeting,” he tells us. “Finding new customers that look most like your best customers.”
Those new customers can be more expensive because they may be the target of other advertisers (including retargeters) who are also bidding to serve them ads for different products. But Feldman believes the end-value of the ad impression is more important than the price being paid, if the user being targeted is more likely to buy from his clients than retargeting clients. Thus an expensive impression may have greater value to an advertiser than a cheap retargeted impression, assuming Quantcast’s “artificial intelligence” — Feldman’s words — is superior.
Many of the other FBX partners — so-called demand-side suppliers — also bring third-party data into their buying mix. But they mostly do retargeting.
It’s an interesting position to take: Feldman’s disdain for retargeting — and his belief that low prices aren’t the point — is the equivalent of insisting that everyone else is doing it wrong.
“What’s going to separate the wheat from the chaff is that advertisers will become more sophisticated at measuring outcomes,” he says.
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