The innovative typically do that. They surprise us because they’re already on to the next thing
Mitch Joel, Mirum
Facebook confirmed the long-suspected shuttering of the Facebook Ad Exchange, or FBX, on Wednesday, a move that is being widely viewed as an effort to move advertisers away from the desktop and toward newer, more mobile ad products.
FBX launched in 2012, and during its inaugural month, it quickly amassed a dozen tech partners and drew much excitement from the industry. The exchange allowed marketers to target ads based on web browsing habits, and some marketers saw nearly 200% increases in ROI with click-through rates 17 times higher than before.
The desktop-based ad retargeting exchange, however, only contributed a “very small” portion of the company’s overall revenue, according to statements made by Facebook COO Sheryl Sandberg in 2013.
The end of FBX is widely considered an attempt to refocus attention on more profitable mobile ad solutions. Mobile advertising comprises 79% of Facebook’s total business, and has clearly occupied more of the company’s attention in recent months. Facebook has announced plans to upgrade its retargeting ads on mobile and recently began rolling them out on Instagram as well.
“I think that there is what I would call a generalized migration, and it is moving beyond the desktop,” said Mitch Joel, the president of Mirum, a global digital marketing agency. “They’re seeing a lot more in terms of video, they’re seeing a lot more in terms of live streaming, they’re working very hard on 360 video and they’re obviously doing a lot in terms of controlling what brands are seeing when they’re not paying for placement, so there’s probably good reason for them to put more effort on metrics, things that really matter to marketers.”
Related
• Mobile keeps gaining momentum in online video: Videology
Facebook has also shifted focus toward its own Audience Network, where marketers buy ads across the web while leveraging Facebook’s user data. It recently started selling video ads through the platform.
“This is a company that was web-browser based, that has made a significant move towards mobile, that has acquired several companies that I would call mobile-first like Instagram and next generation stuff like Oculus,” said Joel. “They are probably just looking at what it takes to maintain and focus on these companies, and they probably feel like there’s more time and effort that’s needed for audience and data so that they can drive the mobile side up.”
Joel isn’t surprised by the shuttering of FBX, and believes a new, more up-to-date product will arrive in the near future to replace it.
“My guess is that they will come out with kind of self-serve component, but it will probably be a hybrid of data, audience and mobile at some level, but I guess we’ll have to see,” he said. “It feels like early days. It feels like there’s a level of surprise in the industry, but I think the innovative typically do that. They surprise us because they’re already on to the next thing.”
