Overview of the Facebook Exchange (FBX) as of November, 2012

1. Overview of the Facebook Exchange (FBX)
Brian Groth
November 2012
[I created this presentation from a variety of public sources as a way to learn more about the FBX.
See the appendix for the list of those sources – Brian Groth]

2. Key Takeaways
1. 3rd party data targeting for Facebook ads
2. Desirable & massive RTB inventory
3. Performance looks promising

3. What is it?

4. The FBX Ad
 URL, not Page  No Facebook user data
 Above the fold  Re-marketing & behaviorally
targeted
 All Facebook web users  Advertiser & DSP provide data
 CPM  DSPs provide day-parting, etc.
 Served by Facebook  Working hours inventory
 Not in the Newsfeed  Over 25% of US inventory
 Not an IAB standard  Campaigns launch within one
hour
 “…is not social advertising”

5. Examples

6. How does it work?

8. techmeme.com
A cookie
gets
created
on my
PC

10. Meanwhile the advertiser
and DSP create an ad to
be displayed on Facebook

11. The cookie is
used to
anonymously
identify me
and a bid is
made in real-
time to show
me an ad

12. I click on
the ad and
am taken
back to the
advertiser’s
site

13. Is It Working?

14. FBX Performance
“Our performance so far in the
(Facebook) Exchange is doing
better than the Google Exchange”
Carolyn Everson
VP Global Marketing Solutions, Facebook

15. FBX Versus Other Ad Exchanges
Ad Inventory Throughout The Day
US Display Inventory Morning
Facebo
ok
Afternoon
All
Others
Evening
FBX Traditional RTB

16. FBX Partners
Key Differentiators per the 16 FBX Partners:
 Cost: $0-$30k
 Service: 5 minutes – 6 weeks
 Value Add: Facebook Ad API

17. Any Questions?

18. APPENDIX

19. Frequently Asked Questions
1. Q: Will Facebook open all their ad inventory to the exchange?
A: Unlikely since that would mean admitting that Facebook is just
another web publisher and Facebook wants to be seen as changing the
world and doing new and different things
2. Q: Are these small Facebook ads really better than a standard 250x300
banner ad?
A: Arguably, a single user checks Facebook multiple times a day, not just
in the morning or evening like many web sites. This is because it’s a
communications tool, not a place to search and move on or a place to
read an article.
3. Q: Is this an extension of the Facebook Ads API?
A: No, the Ad APIs are for building ad creation and management
solutions for social ads on Facebook.

20. What is the Facebook Exchange
(FBX)?
With the Facebook Exchange, advertisers and agencies Segment
can drive direct response goals Promise
through Demand-Side Platforms or Agency Trading Desks
to reach their audience on Facebook with user intent Differentiated
data from outside of Facebook
for remarketing and behavioral targeted audience buys Purpose

21. Results
Source / Partner Insights
TellApart Customers who do click on the Facebook ads end up spending $159 per average order, compared to $163
for Google.
Triggit one-fifth the cost per acquisition of non-Facebook RTB ad campaigns
4x the return-on-ad-spend;
2.2x higher than traditional RTB, and conversion lift has been 18 to 30% higher than a control group of
users who did not see FBX ads
Xaxis (WPP) fast-food restaurant, which used FBX to drive new orders while lowering cost-per-order by 22 percent
compared with similar campaigns that didn’t run on the exchange.
AdRoll Average ROI of 16x
The Trading Desk One client is achieving conversions at half the CPA of other sources of inventory.
AppNexus (for trading desk platform Reduced advertisers’ CPAs by as much as 25%
Accordant) 30% increase in audience reach while maintaining key metrics such as impression to conversion rates.
Bizo 300% “better” cost-per-leads, at prices 66 to 80% less than “an equivalent high-quality display
impression.”
TellApart 10-20x ROI

22. Comparing Facebook Cost Customer Service Value Add
Exchange Partners Minimum spend Time to get started +FB Ads API
AdRoll $0 < 1 day
Criteo Bidded cost-per-click model with clicks beginning at 15 cents. 4 – 6 weeks
This list of API partners is probably not 100% complete
DataXu $20,000-$25,000 48 hours+
Kenshoo $10,000 a month total social media spend 48 hours+
MediaMath $25,000 1 – 2 days
Nanigans $30,000 monthly Facebook ad spend minimum (not limited to FBX “depends” Yes
buys)
Optimal $10,000 spend a month across all ad types 5 minutes Yes
Perfect Audience Free for two weeks, then $25/week minimum budget 7 minutes
Rocket Fuel $20,000 per campaign 3 days Yes
TellApart Retailers pay when a shopper clicks a TellApart served ad and buys. “very rapid”
TheTradeDesk $0 1 day+
Triggit $10,000 minimum spend for advertisers that see about 500,000 1 week
UV/month
Turn $0 48 hours Yes
Xaxis “case by case basis” 24 hours
X+1 About $25,000 per month 1 week

23. Steps to how the FBX works
1. A user visits a travel site that’s hired a DSP rigged up with Facebook Exchange
2. A cookie is dropped on that user’s computer, typically when they’ve shown
purchase intent
3. If the user fails to make a purchase, or the advertiser wants to market to them
more, the DSP contacts Facebook and gives them the user they wish to target’s
anonymous User ID
4. The advertiser pre-loads creative for ads that would target that user
5. When the user visits Facebook it recognizes the cookie dropped by the DSP
6. The DSP is notified and allowed to make a real-time bid to show the user ads
7. The DSPs with the highest bids get their highly-targeted ads shown to the user
8. If the user disapproves of being shown the ad and ‘X’s it out, they’re shown a
link to the DSP where they can opt out of future Facebook Exchange ads

24. • February 2012: http://www.comscore.com/Insights/Presentations_and_Whitepapers/2012/2012_US_Digital_Future_in_Focus and http://www.poynter.org/latest-
news/mediawire/162949/facebook-delivers-1-of-every-4-online-display-ads/
• June 13, 2012: Initial announcement of FBX
• http://techcrunch.com/2012/06/13/facebook-exchange/ Resource
• http://allthingsd.com/20120613/whats-a-facebook-ad-exchange-a-partial-explainer/
•
• http://www.bloomberg.com/news/2012-06-13/facebook-to-debut-real-time-bidding-for-advertising.html
June 20, 2012: http://www.businessinsider.com/facebooks-new-rtb-ad-exchange-is-about-data-not-effectiveness-2012-6
s for this
•
•
September 11, 2012: http://www.digiday.com/platforms/how-facebook-just-became-critical-for-b2b/
September 13, 2012: FBX exited the beta phase
• http://www.facebook-studio.com/news/item/introducing-facebook-exchange
presentati
• https://www.facebook-studio.com/fbassets/resource/66/FacebookExchange20120913
• http://allfacebook.com/facebook-exchange-officially-out-of-beta_b99565
• http://allthingsd.com/20120913/facebook-throws-a-coming-out-party-for-its-ad-exchange/
on
• http://www.adexchanger.com/ad-exchange-news/fbx-ftw-partners-share-results-as-facebook-exchange-exits-beta/
• http://blog.appnexus.com/2012/the-world-of-display-advertising-just-got-a-lot-bigger-2/
• http://blog.triggit.com/facebook-exchange/ and http://triggit.com/fbx-insights-around-speed
• http://tellapart.com/early-results-from-facebook-exchange-show-strong-roi
• http://www.adweek.com/news/technology/buyers-bullish-facebook-exchange-143658
• September 27, 2012: http://adage.com/article/digitalnext/viewable-impressions-digital-s-future-ready/237439/
• October 5, 2012: http://allthingsd.com/20121005/why-the-ad-tech-guys-are-going-nuts-about-facebook-exchange-and-why-that-matters/
• October 15, 2012: http://www.mediapost.com/publications/article/185176/facebook-exchange-adopts-ad-verification-intent-r.html
• October 23, 2012: http://www.forbes.com/sites/afontevecchia/2012/10/23/facebook-exchange-two-birds-with-one-stone-challenge-google-drive-revenues/
• October 25, 2012:
• http://www.insidefacebook.com/2012/10/25/facebook-exchange-what-it-is-and-who-to-work-with-to-get-started/
• http://www.valuewalk.com/2012/10/facebook-inc-fb-ad-exchange-fbx-step-by-step-analysis/
• November 5, 2012: AdWeek and Triggit articles with FBX results
• http://www.adweek.com/news/technology/sitdown-144982
• http://finance.yahoo.com/news/facebooks-ad-exchange-quadrupled-market-134300969.html
• http://blog.triggit.com/why-the-facebook-exchange-ends-the-viewability-debate/
• http://www.adweek.com/news/technology/turn-builds-out-facebook-ad-capabilities-144979
• http://www.webpronews.com/facebook-facebook-exchange-is-doing-better-than-google-exchange-2012-11
• Facebook Resources: https://apps.facebook.com/pmddirectory/ and https://fbcdn-dragon-a.akamaihd.net/cfs-ak-snc6/85001/143/446672752021203-
/Marketing_API_Guide_US.pdf