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Consider These 3 Things Before Investing in FBX

Published: December 28, 2012

Author: Molly Shotwell

Today’s post is by Rosetta’s Mike Pocci.
If you’ve been following Facebook’s recent developments in the realm of direct-response advertising, you’ve probably heard of the Facebook Exchange (FBX). For the first time in Facebook’s history, the social media powerhouse is allowing advertisers to use third-party data to target its users (until now, targeting was restricted to Facebook’s own first-party data, including interests, “likes,” etc.).
This could be great news for advertisers looking to expand their digital acquisition efforts. However, it’s important to keep in mind the complexities and challenges of FBX when considering whether it’s right for your clients and brands. Here are three basic questions to ask yourself before delving into the world of FBX:
1. Does FBX align with your objectives? In general, Facebook can accomplish both branding and acquisition goals, but FBX is specifically designed to drive acquisition and direct return. If you’re not a direct-response advertiser, then FBX may not be the right option. And if you are, be sure to set aside an “opportunity budget” to test the exchange as a small portion of your full campaign so that you can properly evaluate it as a potential channel moving forward.
2.       Do I have the appropriate creative assets and messaging approach?  With regard to creative elements, since Facebook is not currently equipped for standard IAB ad units, you’ll need to separately deliver Facebook-specific creative. This can add notable time to the creative development, setup, and trafficking processes. Furthermore, advertising within Facebook truly needs to be tailored and carefully crafted in order to connect with your audience within such a dynamic, socially driven environment, so make sure you have a compelling brand message that is concise, easy to understand, social in nature, and ideally, integrated into the Facebook experience.

brooks brothers facebook
This ad’s showing a little Facebook-friendly personality.

3.       Do I have the proper tracking in place to determine success?  It may sound obvious, but unique tracking is necessary to understand the impact of FBX. Using separate third-party ad tags or tracking codes for FBX placements is the most basic method for executing a clean test that is distinctly measurable. However, we must also consider that FBX is now allowing both click-through and view-through performance tracking, which is yet another area that should be tracked and evaluated separately.
So far, many advertisers are reporting tremendous success with FBX. However, FBX is still in its infancy, and if the results seem too good to be true, then they should be examined further. After reviewing some of our own results, we have been generally pleased but have still maintained a healthy level of skepticism.
Consider this:  perhaps these strong results are being skewed by the vast amount of time people are spending on Facebook in general, or the simple/straightforward creative approach coupled with above-the-fold placement, or even the extremely low CPMs currently available on Facebook. The last factor, at least, could be susceptible to change as inventory is opened to more and more advertisers and bidding becomes more competitive.
These are just a few theories to keep in mind as you explore opportunities with FBX. Understanding the external complexities that exist and asking the questions above will hopefully serve as an aid in making an informed decision about FBX.
mike pocci rosetta– Mike Pocci joined Rosetta in June 2008, after spending just over three years as a media planner at a traditional ad agency. Mike is known as a resource for online media industry insights, research, and planning expertise as well as thorough knowledge of advanced analytics as they apply to display advertising.

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