What’s the Big Deal About Facebook Exchange?

by on December 5, 2013 · 0 comments

what is facebook exchange?

Since its IPO, Facebook has been trying out different ways to monetise its service. The latest addition to its advertising service portfolio is Facebook Exchange (FBX), a sophisticated ad network that leverages ad cookies – not profile data.

Facebook Exchange has been credited with some pretty impressive results, so it’s natural that people want to know more about it. With Facebook users becoming more cynical about old-style ads, Exchange could offer marketers a very attractive alternative.

How Facebook Exchange Works

Facebook Exchange is a platform that sells ad space in real time. Businesses are able to target their audience very precisely compared to other types of Facebook advertising.

The aim is to help advertisers tempt would-be customers back to their websites to make a purchase. Here’s how it works.

When a user visits an online store and comes close to purchasing, a cookie is placed on their computer. The next time that person browses Facebook, the retailer is able to display an advert within the social network that will hopefully tempt them back to the online store to complete the purchase they abandoned.

Let’s say you place some baby clothes in your cart when visiting an online store, but you don’t actually buy the clothes. Next time you log onto Facebook, the seller of those clothes can bid on the advertising space on your Facebook feed in the hope that they can lure you back to complete the sale.

What Does It Mean For Facebook Marketing?

Marketers like retargeting systems because they’re quite accurate, and even small businesses have a good chance of achieving a high return on investment (ROI). The cost is set per thousand viewers, making budgeting straightforward.

For the Facebook user, the Exchange advertising itself is difficult to avoid. Users can’t opt out of the tracking system, although they can click the ‘X’ on an Exchange ad to give feedback to Facebook (whether anyone will actually read the feedback is another matter). The only way to get rid of Exchange advertising is to use a browser plugin to mask or hide Facebook’s ads.

(Of course, you could block cookies on the online store’s website, but then you wouldn’t be able to buy anything from them anyway.)

What’s New About Facebook Exchange?

This kind of real-time advertising isn’t new. Google already does it. Retargeting isn’t new either. What’s new is the way Facebook is using user data – or not using it, as the case may be.

While old Facebook advertising formats were based on the user’s profile information, with Facebook Exchange, users are shown ads based on tracking cookies stored on their computer while they’re on Facebook. It’s a bridge between the two. The power is in the sheer numbers involved: thousands, millions – even billions of impressions.

In other words, Facebook Exchange doesn’t scan the user’s profile to find out what they like. It can tie users closely with their interests based on shopping habits, but it can’t combine behavioural data with profile data for privacy reasons. The ads are based on data gathered elsewhere; Facebook Exchange is therefore bridging a gap between Facebook and the wider web.

Ready to Try Facebook Exchange?

So you’re ready to log on and place an ad? Unfortunately, it’s not quite as simple as that. While Facebook Exchange ads are very plain, listing your ads on the service requires the help of an intermediary.

If you want to try out FBX, you’ll need to enrol with an official Facebook Exchange partner. There’s a list over on the Facebook PMD Center site. Partners are companies that have completed a qualification and developed their own advertising platform that integrates with Facebook Exchange. (Perhaps the most prominent partner is DoubleClick, the advertising platform owned by Google. DoubleClick signed up just last month.)

Getting started with FBX may be a little more troublesome than some other Facebook ad types, and you’ll have to pay your Partner too. But by all accounts, your response rate could be much better than they would be with regular Facebook advertising, and marketers are much more excited about Facebook Exchange than they have been about other types of ads.

Exchange could give you access to the 7 billion impressions that Facebook ads rack up every day, and that’s pretty impressive. It also raises the question of whether Facebook will slowly grow its retargeting network to become its own independent ad platform.

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Claire Broadley has her own business and is aware of the different ways to use social media to promote businesses. She shares her tips for SMEs, writing for WhoIsHostingThis.Com, an independent hosting review site.

Claire has written 4 articles on Expand2Web

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