Can you name the hottest thing that launched in online advertising in 2012? The answer, without a doubt, is Facebook Exchange (FBX). FBX is an entirely new way of buying ads on Facebook through the use of real time bidding. With FBX, advertisers can reach their audience on Facebook using data collected outside the social networking platform.
Wait, how does this all work? Let’s say a visitor comes to your site and learns about your products without making a purchase (bummer!). It’s not the end of the world, though—AdRoll, one of the first partners Facebook brought onto FBX, displays your ads on sites visitors browse, bringing them back to your page and keeping your brand top of mind. As you can probably imagine, this is extremely useful and beneficial for brand promotion. AdRoll integrates with all the major ad exchanges: Google, Microsoft, Yahoo, AOL and AppNexus. Today, over half of the advertisers leveraging Facebook do so using AdRoll.
Facebook represents a significant portion of display ad inventory on the web—more than 25 percent. By some estimates, real time bidding inventory doubled with the introduction of FBX. So, should advertisers put all their eggs in one basket and select FBX over standard web retargeting when allocating a set marketing budget? This is the million dollar question, and we have some insight into the answer. Of the over 700 advertisers running on FBX, AdRoll examined 468 that ran both standard web retargeting and FBX campaigns during the last six months of 2012. Let’s take a look at the results!
FBX outperformed standard web targeting in two key metrics: cost per thousand impressions (CPMs) was dramatically lower (-82%), and cost per clicks was also lower (-70%). With CPMs, advertisers pay when people see their ads; with CPCs, advertisers pay each time someone clicks on one of their ads or sponsored stories, according to Facebook.
Standard web retargeting did, however, perform better than FBX in a few important metrics. The clickthrough rate was higher for standard web targeting (FBX was 40.18% lower), requiring less ad frequency to drive attention and clicks. Also, cost-per-unique was lower (FBX was 86% higher), revealing that standard web retargeting has the potential to reach a larger, more distinct audience for less spend.
Surprisingly, AdRoll’s analysis revealed that, on average, 8.3% of an advertiser’s total audience was retargeted to by both their FBX and their standard web retargeting campaigns. The final truth of the matter is that advertisers can maximize their return on investment by leveraging both platforms for retargeting campaigns since both have their strengths and are tremendously effective marketing channels. Anything else would be leaving money on the table.
In terms of rich media capabilities and advertisement sizes offered, standard web retargeting seems to have the upper hand over FBX. As far as viewability is concerned, however, FBX ads are always viewable, which is not the case for standard web retargeting.
To learn more about the differences between standard web retargeting and Facebook Exchange as well as the advantages of each, check out the highly informative infographic below courtesy of AdRoll Retargeting.
Image: Retargeting by Shutterstock