Social Media

Closing Time for Facebook Exchange

Effective November 1st, 2016, Facebook will be shutting down Facebook Exchange (FBX). This news comes after the company’s announcement that they no longer plan to turn Atlas into a DSP. Originally launched in 2012, the FBX ad exchange was a desktop retargeting solution that allowed advertisers to buy Facebook inventory programmatically via a DSP by means of pixel-based website retargeting. To replace FBX, Facebook has launched a new ad offering: Facebook DPA (Dynamic Product Ads).

In official statements, Facebook speaks to the evolution of consumer behavior as a key driver of their decision to switch their ad strategy. In 2012, digital advertising was built around the desktop; but since then the digital world has expanded to include mobile. Today, consumers spend the majority of their time on mobile devices and also frequently switch back and forth between their various mobile and desktop devices. Because it was based on browser cookies, FBX did not enable cross-device experiences or measurement, meaning that brands were losing out on potential opportunities to reach interested consumers. With its latest release of product updates like Custom Audience, Facebook is clearly focused on updating their ad offerings to be more relevant for today’s user.

The DPA Difference

While change of any kind – even a positive change – is usually accompanied by some amount of resistance, we believe that most advertisers will be pleased with the expanded feature set of Facebook’s Dynamic Product Ads. Here’s a quick comparison between the old FBX option and the new DPA offering:

FBX

DPA

Bottom Line

Programmatic

Very manual

DPA will take more time to implement, but the features are more advanced

Desktop inventory only

Desktop and mobile inventory

Mobile is where the bulk of social activity occurs, and DPA allows for mobile eCommerce

Limited to 2 ad units on Facebook

All Facebook ad units available

The shift to DPA allows for more more creative flexibility, which is important since creative is often the most powerful optimization lever.

Lower CPM

Lower CPC and higher ROAS

Right now, DPA is our best-performing targeting segment on Facebook

Limited creative options

Offers cross-sell and up-sell features

DPA allows for the ability to increase awareness of additional products or services and thus ultimately leads to a higher AOV

Managed by display team

Managed by paid social team

DPA will be run alongside other paid social campaigns, leading to better total account performance and reduce the risk of oversaturation or loss of frequency control


Next Steps for Advertisers

The discontinuation of the FBX ad exchange has been in the works for a while, so it shouldn’t come as a complete surprise. The most proactive advertisers have already transitioned to DPA campaigns and are exploring the potential of the opportunities provided by the expanded feature set.  If advertisers have not made the transition yet, we strongly encourage them to do so as soon as possible so that they are able to take full advantage of all that DPA has to offer before the FBX cut-off date of November 1, 2016.

Brittany Richter, National Director, Paid Social, also contributed to this post.