Social Media

Should Advertisers panic about the death of fbx

On 25th May Facebook announced they would be closing down the FBX API which has predominantly been used by advertisers to retarget users within the Facebook desktop site.

This has not come as a surprise to those in the know, with Facebook’s mantra “people over pixel”, with “people” representing targeting users based on Facebook unique user ID and “pixel” referring to cookie based targeting.

At the same time changing consumer behaviour has seen a huge increase in users accessing Facebook through mobile devices, an area FBX has always been denied. Analysis of iProspect UK internal data shows 95% of impressions bought through the native Facebook platform in Q4 2015 were served on a mobile device, with ever diminishing desktop inventory available.

With this in mind it is easy to see why the closure of the FBX API will not be giving Facebook shareholders sleepless nights.

The FBX honeymoon period was ending

Facebook launched the FBX API in 2012 in an effort to monetise their platform through established DSPs, leveraging their advanced retargeting and creative solutions to quickly deliver revenue to the newly IPO’d Facebook. During these early days the huge volume of quality inventory on the Facebook desktop site saw FBX represent up to 20% of programmatic spend on a single campaign, a staggering number for a single domain.

Advertisers were attracted by the relatively inexpensive inventory coupled with the advanced features offered by DSPs, with cookie based retargeting and prospecting coupled with dynamic creative delivering personalised content to users.

Fast-forward to April 2016 and the scale of FBX has decreased with it representing ~4.5% of total available impressions in the UK and representing less than 1% of Dentsu Aegis UK programmatic spend.

The evolution of Facebook’s native solution

Whilst advertisers were reaping the rewards of the FBX API, Facebook were busy developing their own native solutions to complement the huge volume of data they already held on their user base.

First in 2013 custom audiences was launched, the ability to identify known customers on Facebook using email and phone numbers to accurately match users. Later in 2013 partner categories was launched, where advertisers could target users based on 3rd party data from the likes of Acxiom and Datalogix, at no additional cost to the buyer.

In 2014 Facebook released their native remarketing pixel solution, updated in 2015 to become a great deal more sophisticated allowing advertisers to retarget users across multiple devices based on user behaviour on advertiser web assets.

More recently Facebook has launched dynamic product ads, now renamed product ads, which go some way to replicate the dynamic creative offered by the more popular DSPs, with advertisers able to upload their product category to serve users ads based on their site behaviour.

What this means for advertisers

All of this has lead the progressive advertiser to divert significant budget to Facebook native solutions to deliver strong ROI performance across desktop and mobile placements, taking advantage of Facebook’s deterministic data to prospect for in-market users, and using advanced remarketing to convert those lower down the funnel.

In the short-term, advertisers running programmatic campaigns shouldn’t expect this to impact campaign performance much (if at all). The programmatic campaigns being ran through DAN UK are less reliant on Open Marketplace impressions (which FBX fell into) to deliver performance and are far more focused on first look impressions opportunities with progressive publishers.

However, advertisers still wedded to FBX now need to reconsider the role of Facebook native solutions for ROI campaigns, working closely with their agencies to develop strategies and measurement frameworks to be ready for the November death knell.

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