FBX Is Turning Facebook Into One Of The Biggest Players In The Real-Time Bidding Space

With Facebook Exchange, or FBX, Facebook officially entered the real-time bidding space, allowing the social network to bring its targeting capabilities and incredible reach to the fast-rising retargeted display ads category. FBX is already so big that some ad buyers believe it could become a larger source of real-time bidding inventory than Google's AdX exchange.

But like with other kinds of ad tech, Facebook Exchange is complicated, and understanding how it works, how it differs from other Facebook ads, and why advertisers would choose FBX inventory is challenging.

In a recent report from BI Intelligence, we explore how advertisers purchase ads through FBX, which companies have partnered with FBX, and why the Exchange offers such a unique opportunity to marketers. The report also puts FBX in context in terms of its size and performance so far.

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Here are some of the key details surrounding FBX:

• Facebook already accounts for about half of the retargeted ad clicks on the Web. Millions of ads are sold and purchased on FBX every second with the help of demand-side platforms that plug advertisers into FBX, and billions of impressions are served every day.
• The platform has been fast out of the gate: FBX produced stellar early results for advertisers, both in terms of cost and performance. Eventually, the price and performance bar will be set higher. That's already starting to happen for better-performing News Feed placements.
• Despite FBX's huge weight in the retargeting space, it still constitutes a small share of overall Facebook revenues. FBX is not yet available on mobile, though this may be coming soon. Additionally, Sponsored Story social-native ads, which are at the heart of Facebook's ad ecosystem, aren't accessible via FBX. The FBX News Feed ads are still limited in terms of their social features.

In full, the report:

• Details how FBX works, including which DSPs are involved, and how the DSP works with Facebook to serve ads
• Outlines which ad inventory is available on FBX and which is not
• Sizes FBX in terms of the total retargeting market, and its relative weight in Facebook's paid media ecosystem
• Explains which advertisers are best suited to FBX campaigns
• Provides three case studies from DSP partners on FBX performance so far