Dive Brief:
- Facebook is completely closing down its FBX ad exchange on Nov. 1, in a move that has been widely expected by the digital advertising industry.
- The ad exchange retargeted audiences on non-Facebook websites, but only worked on Facebook’s desktop site. As mobile has become the main driver of its ad revenue, accounting for 82% of Q1 revenue, the decision comes as no surprise.
- Another knock against the outgoing exchange is it didn’t support video ads, another key ad unit for the social giant.
Dive Insight:
Facebook has been fairly aggressively reworking its advertising options in order to offer both end users and marketers the best value and experience. This move looks to be simply ending a low-value technology for everyone involved, including Facebook. The move is also a very strong indicator in the value Facebook is placing on mobile and video advertising.
One loser in the closing of FBX, according to reporting by Seeking Alpha, are some of the companies that worked through the exchange. For example, Criteo, a company that delivered retargeted e-commerce ads via FBX, saw its shares drop on the news of the exchange’s closure on Wednesday.
Meanwhile, Matt Idema, Facebook’s VP of product monetization, told Ad Exchanger, “FBX was built as a retargeting tool for desktop and, over the years, consumer use of Facebook has shifted more and more to mobile.”
Examples of Facebook’s emphasis on high-value advertising include its Dynamic Ads format, its slow shuttering of LiveRail capabilities, and internal research that led the social media giant to favor native and video ads over what it called "valueless" banner ads.
