Facebook Exchange: How it works and why you should care

Back in June, Facebook rolled out a new ad platform with a select group of advertisers. Now out of beta, Facebook Exchange (FBX) is up and running with 15 approved partners authorized to buy real-time inventory. (Hopefully this is a sign of things to come and Facebook will open the platform to agency partners as well.) In concept, FBX is similar to Google retargeting.

Here’s how retargeting works: Typically, an ad network (Google, Bing, etc.) places a cookie in your browser log when you visit a participating site, which stores information about the products or content that you viewed. Later, when you visit Google, Bing or another part of the exchange, a targeted ad will appear with content the network knows you are interested in, trying to compel you to return to the site.

An example: You’re looking for a new pair of shoes on the Nordstrom website, but you decide that you’re not ready to buy anything, so you leave. Later that evening, you see an ad on Facebook prompting you to reconsider the very same shoes you were looking at earlier, and now you’ll even get free shipping! It’s a pretty great advertising concept.

The exciting news for advertisers is that Facebook beta partners are reporting lower cost per acquisition (CPA) than with other ad platforms. According to Inside Facebook, companies are getting great numbers from FBX:

  • TellApart is showing 10 to 20 times return on investment (ROI)
  • Bizo is reporting 300 percent better cost-per-leads
  • According to AppNexus, CPAs can be reduced by as much as 25 percent
  • Triggit (which shared the infographic below) saw numbers at one-fifth the CPA and four times the ROI, compared to traditional campaigns

Why should we care? Because FBX is another great tool we can use to better target our advertising efforts, resulting in what we all want: higher conversion rates.

We’ve had great results with many Google retargeting campaigns over the last decade, and the team here at Imaginuity Interactive can’t wait to get our hands on the new platform so that we can get similar results for our clients.

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