Infographic: Real-Time Bidding Year Review Europe

Our team of experts have put together a RTB Year Review Infographic. It includes key market trends from 2012, insights from our in-house experts and predictions for 2013 – all in a easily digestible format.

Scroll down below to view our Infographic:

The Facebook Exchange is RTB on Overdrive

Chris Stark, Product Director at Infectious Media, explains why Facebook’s recent launch of Facebook Exchange (FBX) is a massive opportunity which marketers should capitilise on.

For marketers, the Facebook advertising proposition is increasingly compelling. The site boasts 1B users globally which includes almost 65% of the UK online population. As a site built by users rather than publishers, Facebook is a rich source of consumer data. And because pages are designed individually for each user there is rarely a clash of ads, making Facebook a great brand-safe outlet.

Facebook launched its Ads Marketplace a few years ago to provide a channel that leverages its immense store of users profile data. Aimed at increasing activity within the Facebook environment, this display advertising gives marketers extremely precise targeting options. In combination with the personal connections that Facebook enables, marketers can raise awareness and keep their fan base engaged.

However Facebook Marketplace lacks the ability to reach the bottom of the sales funnel. So by supplying the same inventory via an open exchange model, Facebook’s recent launch of Facebook Exchange (FBX) is a massive opportunity for marketers with retargeting strategies. FBX does not make its own data available, but crucially it allows buyers to utilise their 1st and 3rd party data sets and bid optimisation technology to participate in the inventory auction.

Facebook is different from other inventory sources because its inventory is ‘always on’, with users accessing it regularly throughout the day. In contrast, other RTB inventory is often weighted towards the evening. As a result, any activity requiring high frequency touch points will benefit from being run on FBX; for example, basic retargeting, creative and message testing, and ‘bench testing’ 1st party segments.

With Facebook adverts there are no viewablity issues, even though the ad-size (100×72) is smaller than IAB standard ads, they are always visible on the page. Incompatibility is not a problem because the site provides a high standard of consistency and appropriateness to the user. For the marketer, this means that a larger proportion of ad spend is focused on media costs, and not on site qualification or viewability metrics. The reduced ‘overhead’ means better ROI for simple retargeting.

So how does this work in real life? For e-retailers FBX allows for rapid re-acquisition. Many customers do not complete a purchase after visiting an e-retailer site; they may abandon their cart, get distracted, or stop their product research. The objective here is to get their attention, remind them of the purchase intent, and encourage them to complete the transaction. But e-retailers face cutting through an excess of online noise, in a limited amount of time, to reach these customers effectively.

The question is how long does the purchase interest last after the site visit? Two days? Five? The best retargeting campaign is one that can reconnect within hours. A good percentage of customers will be on Facebook for a few hours each day, so can be reached while they are still considering the purchase. So for e-retailers, marketing through Facebook Exchange allows for site visitors to be re-acquired faster than ever before.

For hotel chains, people become prospects the moment they begin to plan a trip. This planning is often motivated by reading about holidays or seeing friends posting pictures of travel abroad on Facebook. The benefit of FBX is you can apply external data sources to decide on the best time to serve travel ads. For example, we apply weather data to capitalise on a user’s increased desire to travel when it’s raining or cold.

There is also a real benefit in this industry, in running hundreds of small, sophisticated tests of pricing and travel packages in combination with the external data. Not only can you find the right customers, but the right messaging and the right opportunity as well. There are rarely simple combinations of creative and data that work all the time, the scale of FBX allows for the speedy optimisation of campaigns, minimising the cost of acquiring new customers.

Infectious Media has many years’ experience working with Facebook, serving sophisticated awareness-building adverts on the Facebook Marketplace via our own integrated tool, Impression Desk Social. We use this experience to maximise the benefit that can be gained through the Facebook Exchange, combining detailed knowledge of your customers, our robust optimisation and analytical techniques, and creative that can adapt to engage the audience in the most effective way.

Our integrated approach of FBX, Facebook Marketplace and non-Facebook RTB, offers a ‘whole that is greater than the sum of its parts’. We define and test your target audience with Facebook Marketplace advertising. We then drive them at scale to your site using larger ad formats on external RTB inventory. This audience is then retargeted when they go back to Facebook via FBX, well within the effectiveness window, and with a message optimised to their interests. As the system learns, it becomes more effective, optimising over time to produce better and better ROIs.

A common mistake is to think of Facebook advertising as similar to social media marketing. It is more accurate to think of Facebook advertising as a vast source of inventory and data, allowing the benefits of scale and consistency to be brought to bear to meet advertiser goals, making it one of the most effective advertising channels.

The Third Channel

There’s something happening at Facebook.  Almost under the radar it seems that they have established one of the strongest online advertising platforms available which is disrupting the established digital media buying landscape.  A simplistic view of digital media buying is that there are two very clear disciplines, ‘search’ and ‘display.’  Search is 100% platform traded whilst a growing portion of display is now starting to be platform traded via real time bidding (RTB).  This certainly seems very neat and Google have been in pole position to offer an over arching digital advertising management platform, the acquisition of Invite Media being the latest display addition to the existing, ubiquitous Adwords search platform.

However somewhere in the middle of this neatly bisected landscape, Facebook have started to build their own advertising empire, ignoring this equilibrium, and fast creating what would appear to be a completely new channel. In 2008 this quiet revolution started with the release of their self service buying interface for ASU’s (Facebook’s proprietary ad unit) and to complement this came a buying API on which they have allowed a limited number of third parties to build out campaign management tools.  At the start of this year, the walled garden approach started to pick up pace with the removal of all third party banner advertising and the under reported but very significant release of the Facebook conversion pixel.  Add to this an unwillingness to accept third party view tracking (at least for self service buyers) and the platform becomes a hybrid of the existing search and display models that are already prevalent but powered by Facebook using micro-targeted demographic and interest data.  Walled advertising gardens are the preserve of the audience or perhaps more crucially the data rich, and Facebook has both in abundance.

Rumour has it that their standard ‘banner’ CPM’s were incredibly poor with response rates for advertisers to match.  With the new system, advertisers now have the opportunity to tap in to the vast (and bettered only by Google) data treasure trove that Facebook holds on its users and create highly targeted campaigns.  Our experience of advertising on Facebook via their self serve platform is that it performs incredibly well for advertisers and justifies the ‘channel’ label with an emerging trend (in the UK at least) being Facebook specific pitches separated out from the rest of digital media buying.   Revenues are growing exponentially as well, up to $700m in 2009 and predicted to be over $1bn in 2010.  It’s safe to say that with this type of revenue and growth that banner advertising will not be returning to Facebook any time soon and they will push on with new ways to mine user data for advertising purposes all within the confines of Facebook.

So an interesting dynamic is emerging with Paid search, RTB traded display and now Facebook all having bespoke buying systems that are needed to operate them.   A couple of platform companies from both the search and display space backed up by large amounts of VC money are trying to solve these interoperability problems with the vision being a universal buying platform.  However, the further down the walled garden route Google and Facebook go, the more difficult it will be for this to become a reality as data is not portable between these environments.

From a media buyers perspective this is frustrating, but then it’s only from this side of the fence that interoperability make sense.  After all, would you share your data, if you were sitting on the monopolisitic advertising goldmine that both Google and Facebook are or would you keep it behind closed doors? It’s a smart play and the early signs are that Facebook could well be here to stay as a channel in its own right.