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Why Advertisers are Flocking to Facebook Exchange

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People visit a website, leave, and then they go to Facebook. eCommerce, gaming and travel marketers looking to target customers who contemplated a purchase on their site but didn’t complete their transaction are flocking to Facebook Exchange or FBX, to capitalize on intent shown on their website and to maximize revenue.

As Facebook pushes more ad space into its RTB marketplace, there are signs that advertisers are coupling both the native Facebook Ads API to generate demand and FBX to convert individual customers. The Facebook Ads API provides access to Facebook’s rich targeting data (demographics, connections, interests, more) while FBX allows marketers to bring their own 1st party data to Facebook. Facebook API ads are effective for driving users to landing pages who can then be retargeted with FBX ads. This helps to grow the pool of people in their remarking groups.

Facebook Ads API and FBX Boost eCommerce Sales by 89%

In a study of $1.2M in ecommerce sales, Nanigans found that customers who entered FBX remarketing pools after first viewing a standard Facebook ad purchased 89% more in sales revenue than those who entered FBX remarketing pools from other channels, such as organically or through search.

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The study also revealed that combining FBX buys with prospecting through the native Facebook Ads API delivered 39% more customers into FBX remarketing pools.

The results underscore that without using native Facebook audience targeting withe the Ads API, the retailer would have seen a smaller pool of potential customer to retarget. Filling the remarketing funnel with high quality candidates is critical for a successful FBX campaign.

In addition, customers acquired through native Facebook audience targeting were much better qualified than those acquired through other channels. This can be attributed to the deep targeting capabilities and social context of Facebook’s native ad types, available through the Facebook Ads API.

Based on the results, it’s clear that if an advertiser is not leveraging Facebook Ads API buys alongside FBX retargeting, they are not only missing out on new customers, but they are missing out on their highest quality customers and significant incremental revenue.

The compelling performance of FBX has been touted widely by DSP’s, primarily noting the opportunity of retargeting in general — advertisers target potential customers who have already visited their website and then browse other sites across the web.  These potential customers have already shown intent, and studies have shown they are more likely to convert into purchasers than those who have never visited the advertisers’ website.  DSP’s make the most of this intent with display inventory outside of Facebook and some use FBX as an inventory source.

However, many DSP’s without access to Facebook’s Ads API, can’t take advantage of the social network’s deep audience targeting (demographics, interests, custom audiences, etc.), the social context of Facebook’s native ad types or the fastest growing area of Facebook—mobile.  All of the information Facebook has on its users if off-limits so they focus on helping advertisers target with their own first-party data or third party data.  And reporting on specific Facebook targeting segments is also limited.

By leveraging the Facebook Ads API and FBX, advertisers can spend with confidence knowing that they are minimizing wasted impressions and maximizing ROI.  Advertisers can define rules-based retargeting groups, such as people who have registered but not purchased.  They also have access to real-time dynamic ad creative in News Feed at the individual product SKU level.

As Facebook continues to see strong demand for FBX ads in both the desktop News Feed and right hand rail, some, such as J.P. Morgan, suspect they will look to capitalize on their mobile momentum and roll out FBX to mobile later this year.

“We believe FBX will become an increasingly important part of Facebook’s ad platform as retargeted ads move further into the Desktop and Mobile News Feeds,” said J.P. Morgan Internet analyst Doug Anmuth in a recent report. “Our anecdotal checks suggest that FBX ads have increased notably in the Desktop Right Rail—often representing the majority of ads shown—and marketer feedback after a few months of FBX in the Desktop News Feed is positive.”

If you are a direct response marketer who is not leveraging remarketing on Facebook, you are missing out. Facebook’s massive reach (more than 1 billion users) combined with its high quality ad inventory provide exceptional results for advertisers. When planning your campaign, be sure to leverage the Facebook Ads API to discover and FBX to close individual customers to maximize your return on ad spend.

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