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Why Advertisers Can’t Leverage FBX without Native Facebook Ads API Buys [Study]

Facebook Ads API Buys Drive 39% Additional Customers Who Purchase 89% More

Nanigans recently conducted a study of over $1.2 million in sales revenue from an ecommerce giant to understand the interplay between the Facebook Ads API (native Facebook audience targeting) and the Facebook Exchange (impression-level retargeting on Facebook).

Specifically, we aimed to understand the incremental sales lift that Facebook Exchange (FBX) generates for customers acquired through native Facebook audience targeting as opposed to customers acquired through non-Facebook channels, such as organic discovery or paid search.

The results underscore how critical native Facebook audience targeting is to FBX efforts. After being retargeted through FBX, customers entering the remarketing pool through native Facebook audience targeting purchased 89% more in sales revenue than those who entered the remarketing pool through non-Facebook channels. Additionally, native Facebook audience targeting led to 39% additional purchasing customers than FBX tactics alone.

Background

Facebook Exchange Logo Nanigans

FBX allows advertisers to leverage their own data or third party data to selectively bid on individual impressions in the right-hand side of Facebook (read more: “5 Myths of the Facebook Exchange, Demystified”).

Much of the compelling performance of FBX, which has been published widely by DSPs, comes from the opportunity and cadence of retargeting itself: advertisers target potential customers who have already visited their website as they browse other sites across the web. These potential customers have already shown intent, and in theory are then more likely to convert into purchasers than those who have never visited the advertiser’s website. DSPs help advertisers capitalize on this intent with display inventory outside of Facebook, and some are now using FBX to access Facebook as an inventory source, as well. Not surprisingly, they’re seeing success.

However, access to FBX does not provide access to any native Facebook audience targeting (demographics, interests, custom audiences, etc.), the powerful social context of native Facebook ad types (Sponsored Stories, page posts ads, mobile app install ads, etc.), nor access to the most engaging part of Facebook (the News Feed on desktop and mobile). These highly valuable ad products are available only through access to the Facebook Ads API, and are critical to helping advertisers find new customers and drive people into the marketing funnel who can then be retargeted and converted into purchasers through FBX.

The one disappointing topic surrounding FBX is the lack of conversation about just this – the tactics that drive users into the remarketing funnel who then become the focus of retargeting. Our study aims to help provide clarity, and shows how critical native Facebook Ads API buys are for any advertiser leveraging FBX.

Analysis

Nanigans conducted a four-month, longitudinal study of an online retailer that advertises extensively on Facebook.* Nanigans analyzed over $1.2 million in sales revenue from the retailer from 5,188 customers who were retargeted through FBX.

A portion of these 5,188 customers initially visited the retailer’s site after being targeted with ads through native Facebook audience targeting through Facebook Ads API buys. The other portion initially visited the retailer’s site by other non-Facebook channels such as organic discovery or paid channels like search. After visiting the online retailer’s site, all 5,188 customers were then retargeted through FBX.

The findings were staggering on two fronts. FBX retargeting to people who entered the remarketing pool through Ads API buys vs. finding the retailer’s site through other channels resulted in:

  1. 39% additional unique purchasers (1,456 people), and
  2. 89% higher sales per purchasing customer ($354 vs. $187).

Nanigans_APIFBX

* This longitudinal study is based on one retailer, and results may vary advertiser-to-advertiser. Exact sales revenue totaled $1,216,080.56.

Conclusion

  1. Without using native Facebook audience targeting through the Ads API, the retailer would have seen a much smaller universe of potential customers to retarget. Filling the remarketing funnel with high quality candidates is essential to successful FBX campaigns.
  2. Customers acquired through native Facebook audience targeting were much better qualified from the onset than those acquired through other channels.  This was likely due to the deep targeting capabilities and social context of native ad types available through the Facebook Ads API.

This study makes clear that if you’re not leveraging Facebook Ads API buys alongside FBX retargeting, you’re not only missing out on new customers, you’re missing out on your highest quality customers and significant incremental revenue.

To learn how Nanigans’ platform with access to both the Facebook Ads API and Facebook Exchange, contact us today!

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