Facebook makes a big play for mobile programmatic

New in-app exchange marks a much-anticipated entry into the space

Facebook finally laid out its plans to climb into the mobile programmatic ring at the f8 Facebook developer conference in San Francisco last week.

The goal for all of our ad tech capabilities is to eventually bring all the ways you can target on Facebook to all of our ad tech features

tim rathschmidt, Facebook

For years, there have been rumours that Facebook would eventually expand its programmatic sales capabilities to publishers beyond its own site. Although the Facebook Exchange (FBX) is considered a programmatic exchange, it has only ever sold Facebook inventory, rather than aggregating inventory from partnered publishers and networks as exchange platforms like Google DoubleClick do.

But with several big changes to LiveRail, the programmatic video platform for publishers that it acquired last year, Facebook has finally created something that lives up to the name “Facebook Exchange.” (Though it won’t be called that.)

LiveRail’s platform will expand from video to mobile in-app display advertising, giving publishers the tools to manage their mobile app inventory and sell it programmatically via LiveRail’s exchange. That will put it on par with mobile marketplaces like Twitter’s MoPub or Yahoo’s Flurry.

Unlike other mobile publisher platforms, LiveRail will have access to Facebook’s unique “people-based” data targeting capabilities. Publishers will be able to segment and forecast their inventory based on Facebook’s mobile demo data, and offer audience guarantees that line up with GRP guarantees typically offered in TV.

Facebook ads monetization spokesperson Tim Rathschmidt explained that since there are few widely adopted alternatives to cookies in mobile, even audience data as basic as age and gender can be unreliable. He said that Facebook’s data — based on 1.3 billion logged in users across mobile and desktop devices — will help to differentiate LiveRail from competitors like MoPub.

“We’re focusing on age and gender right now because there is such a low level of accuracy, and actual capability to sell guaranteed audiences, on anything other than a cookie, which doesn’t really work on mobile,” he said. “We’re starting there because that’s the biggest opportunity and it’s table stakes for what we want to do in mobile.”

Publishers that use LiveRail to manage their inventory will be able to use Facebook’s people-based audience capabilities regardless of whether they’re selling on the LiveRail exchange, or plugging into another network or exchange to sell their inventory, he said.

Although for now, only age and gender data is available, this is only the first step. “The goal for all of our ad tech capabilities is to eventually bring all the ways you can target on Facebook to all of our ad tech features. So you can imagine that in the future, we’ll look to bring things like interest to that as well,” Rathschmidt said.

Advertisers first got a chance to use Facebook’s people-based system on non-Facebook sites in the fall, with the relaunch of its third-party ad server, Atlas. The update made it possible for advertisers to use Facebook’s audience data to target users across the desktop and mobile web.

Rathschmidt said that the LiveRail changes represent the other half of that package, extending the same data tracking capabilities to publishers so they can drive up the value and reliability of the mobile app audiences they sell.

“We’re really focused on providing both Atlas and LiveRail the resources they need to scale and grow their specific businesses on both the advertiser and publisher sides,” he said.

With the new update, LiveRail will also incorporate one other small but crucial component of Facebook’s people-based targeting toolset for both its mobile and desktop video offering: cross-device user identification.

Thanks to Facebook’s many, many logged-in users, it’s one of the few technology companies that can reliably pair mobile users with their desktop devices. Advertisers can use the matched IDs that Facebook provides to take data they collect about users on the desktop web and apply it in mobile advertising, to give the user more relevant ads across any device they use.

Other ad tech companies, notably Google and LiveRamp, have also developed cookieless cross-device targeting capabilities based on user logins. But with such a massive and engaged userbase on desktop and mobile, Facebook looks to be the dominant force in the cross-device space.

Rathschmidt said the decision to skip desktop display and go straight to mobile in-app advertising was based on where Facebook is seeing the most demand from publishers. That’s likely a relief for the dominant desktop supply-side platforms like AppNexus and Index Exchange, who wouldn’t look forward to facing a competitor powered by Facebook’s data.

Rathschmidt said adding a desktop display offering hasn’t been ruled out, but for now it’s a low priority.

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