Facebook Exchange Rolls Into News Feed

Testing expansion with TellApart, MediaMath, Nanigans

Last summer, Facebook began letting advertisers retarget users with ads on the social network based on their off-Facebook browsing behavior through Facebook Exchange (FBX). For as much praise as the retargeting program has received from advertisers, one gripe has been that the ads are confined to the easily overlooked right rail adjacent to the all-important News Feed.

Make that were confined.

On Tuesday, Facebook announced that it has begun testing the roll-out of FBX to the News Feed. The company’s keeping the alpha test pretty small for now; it's limiting it to the desktop News Feed and a portion of its existing FBX partners, including TellApart, MediaMath and Nanigans, although it plans to bring on more demand-side platforms in the coming weeks. Nonetheless, the news is big for Facebook and advertisers.

During Facebook’s most recent earnings call, COO Sheryl Sandberg highlighted the company’s push to attract advertisers to the News Feed, saying that 65 percent of Facebook advertisers are now running ads there. That share should climb more now that Facebook is rolling out FBX to the News Feed because direct-response advertisers like retailers or travel brands will stay in front of potential customers when they navigate to Facebook, which has become many people’s online home base. Being able to reach those people with ads where they're most likely to see them would likely coax any FBX hold-outs to try the program and persuade those toeing the water to invest more.

The average Facebook post attracts 75 percent of its total engagement within the first three hours of hitting the News Feed, said Rob Leathern, CEO of social ad firm Optimal, which is an FBX partner but not participating in the News Feed alpha. “There are new interesting opportunities when combining immediacy needs and what people are engaging with organically,” he said. Leathern also pointed out that News Feed ads tend to perform at least 10 times better than their right-rail counterparts. A Facebook spokesperson said advertisers may opt to run FBX ads within the desktop News Feed alone and not appear in the right rail at all.

For now, the FBX News Feed ads are limited to Page Post link ads. Those units would allow, for example, a clothing retailer to promote a specific dress to someone who had recently checked out the item on the retailer's site and include a thumbnail image of the garment plus a brief description with a link back to the product’s landing page on the retailer’s e-commerce site. Conceivably the idea is to help direct-response advertisers address the common behavior of people who often boomerang back to Facebook to check their News Feed but risk not returning to what they had been doing, like researching travel arrangements. 

“Allowing advertisers to reach people in News Feed is important because people spend more time in News Feed than any other part of Facebook," Facebook said in a statement announcing the news. "We also believe that ads delivered through FBX will create more relevant ads for people. Introducing Facebook Exchange in Desktop News Feed will not change the number of ads people see in their News Feeds.”

That Facebook is essentially capping the number of News Feed ads despite the infusion of FBX will likely impact advertisers’ ability to crack the feed. Because FBX is at its core simply another way to buy ads on Facebook—in addition to buying media through an ad API partner like Optimal or Facebook’s self-serve tools, both of which let brands target ads using Facebook data unlike FBX—making FBX available for News Feed buys could effect the price of FBX as well as non-FBX ads and how advertisers value their in-feed ads. “There’s going to be a higher effective [cost-per-thousand-impressions] for ads in the News Feed when the bidding is competing with other ads in the News Feed,” Leathern said.

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