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Facebook Exchange (FBX) Attracts Bigger Ad Budgets, Boosts Returns for Advertisers

fbx

According to data from Nanigans’ clients, the final quarter of 2013 was the biggest Facebook FBX spending period ever as advertisers looked to boost returns by reengaging high value consumers on Facebook. Since its introduction in June 2012, marketers have increasingly allocated bigger budgets to FBX, as serving ads based on known user preferences to Facebook’s massive audience (more than 1 billion users globally) has proven to be highly effective for driving conversions.

Nanigans examined its global performance data to better understand the demand for FBX in the past year.  Some of our key findings include:

  • Ad spend on FBX reached an all time high in Q4 2013, with an increase of 55X from Q4 2012 to Q4 2013
  • Click-through rates (CTRs) increased 385% as compared to a year ago
  • Cost-per-clicks (CPCs) increased 46% year over year but despite higher costs, revenue-per-click (RPC) increased by 149% indicating that advertisers are realizing greater value in sales revenue than the cost of their advertising investment

Facebook ad spend increased 55X, Q4 2012-Q4 2013

FBX ad spend Q4 2013

The significant year-over-year growth in ad spend indicates that advertisers are increasingly recognizing the value of FBX and the opportunity to boost returns by retargeting people who have visited their website.

FBX CTRs increased 385%, Q4 2012-Q4 2013

FBX CTRs

The increase in CTRs shows that marketers are seeing high engagement with their FBX ads.  Advertisers started to leverage FBX in News Feed in Q2 2013 which helped to increase distribution for their retargeting efforts.  Facebook’s News Feed ads provide consumers with a more engaging ad unit than standard domain ads delivered to the right-hand side of Facebook because of their central location, larger surface area and social context.  A Nanigans study revealed that on average, Page post link ads delivered in the News Feed resulted in a 197.3% increase in ROI as compared to domain ads delivered on the right-hand side of Facebook.

In the same period, Nanigans rolled out dynamic creative for FBX providing advertisers the ability to dynamic display creative at an individual, product SKU level.  This provided much greater relevancy for end consumers by displaying products they recently viewed and engaged with on their website.  A Nanigans case study revealed that dynamic creative increases ROI of Facebook Exchange by 5X.

FBX Page Post Link Ad in News Feed

FBX Page Post Link Ad in News Feed

FBX CPC and RPC, Q4 2012-Q4 2013

FBX CPC and RPC

Despite higher average CPCs (CPCs increased 46% YOY) the RPC for FBX advertisers has increased significantly (RPC increased 149% YOY) indicating that advertisers are realizing greater value in sales revenue than the cost of their advertising investment.

Marketers have benefited by using FBX in combination with the Facebook Ads Api, allowing them to maximize reach and achieve strong ROIs. Facebook API ads are effective for driving users to landing pages who can then be retargeted with FBX ads which helps to grow the pool of people in their remarking groups. Our data shows that Facebook Ads API Buys drive 39% additional customers who purchase 89% more.

Facebook marketers have achieved FBX success by creating retargeting groups around the goal they are trying to achieve and by defining a set of behavior rules to create and automatically update their retargeting groups.  For example an online retailer could target people who:

  • Added an item to their cart but didn’t purchase
  • People who viewed a product but didn’t purchase
  • People who visited their website but didn’t purchase
  • People who have registered or logged in but didn’t purchase

With only 2% of web traffic converting on the first visit, ad retargeting will only continue to grow in importance during 2014. Retargeting not only helps to remind consumers of the product they may have recently viewed, but it takes the next step to reengage them for specific purchase events

FBX has driven significant impression volumes since launch. With 20 billion user minutes spent on Facebook per day, the ability to serve dynamic ads based on known user preferences will continue to be a key contributor to driving conversions for advertisers in 2014.  Today, just as you wouldn’t run advertising campaigns on desktop without buying on Facebook, you shouldn’t be retargeting consumers without FBX.

As you are thinking about your own FBX strategy for the year ahead, find out more about retargeting on Facebook with Nanigans’ latest eBook: Insider’s Guide to Retargeting with Facebook Exchange.

Download the Free eBook Today

 

 

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