Industry

The End of FBX – Replacing Black Boxes with Glass Windows

Facebook recently announced they will retire FBX, putting an end to third party vendors buying ads through the ad exchange. This has been a long time coming, as advertisers have realized the growing need for ad placement on mobile (something FBX wasn’t capable of doing).

In March of 2015, we saw the writing on the wall and predicted FBX’s days were numbered and touted the benefits of product ads for mobile reach vs FBX. As far back as July 2014, we were talking about how custom audiences were far superior to FBX for retargeting across devices.

FBX was originally built as a retargeting tool for desktop, which limited advertisers looking to take advantage of the growth in mobile devices.

Here’s what Matt Idema, Facebook’s VP of Monetization Product Marketing, said:
“Mobile is now a necessary component of effective marketing campaigns, and Facebook is helping millions of businesses understand their customers’ purchase path across devices. Dynamic Ads and Custom Audiences have mobile at their core and are delivering excellent results for businesses, so Facebook Exchange spending has shifted towards those solutions.”

Dynamic Ads

With the decline of FBX we’ve seen the rise of Dynamic Ads taking over and delivering superior results. It’s no wonder Facebook has decided to completely kill FBX. Back in 2012, mobile contributed 41% to Facebook’s $1.6 billion ad business. In its latest earnings call, mobile was 82% of its $5.2 billion ad revenue. Retargeting Vendors have been cannibalising Facebook profits by layering huge costs on top of Facebook inventory costs and hiding the fact from advertisers. Facebook is now strongly encouraging these vendors to be up front and transparent with clients to expose the true cost of Facebook inventory.

Many vendors that sell FBX inventory have not been completely transparent with advertisers. Many of our clients were not even aware that their previous retargeting vendor did not support retargeting within the Facebook app on mobile devices.  Nor were they aware that these vendors were charging up to 40% additional fees on the cost of the limited desktop inventory for their ads.

Our clients are constantly asking us to enhance our platform to provide further transparency and control over their retargeting campaigns. Dynamic ads allow us to provide highly granular control over products and campaigns. We enable clients to bid/budget based on category, profitability, location and even based on individual products.

We also enable clients to build on their retargeting activities to automate cross-selling and prospecting using Dynamic ads. The days of pumping marketing dollars into rigid black boxes are numbered as clients need to have full transparency on ad spend and successes to be able to effectively manage their marketing activities across customer devices.  Customers are engaging with them across points of sale (in store, websites, mobile apps etc.) and across devices (desktop, tablet, cell phone etc.).