Sheryl Sandberg Admits Facebook's Ad Exchange Is 'Very Small'
The news came as a shock to the adtech world and some analysts, which had previously made predictions that the exchange would soon be worth billions to Facebook.
Analyst Youssef Squali of Cantor Fitzgerald asked on the earnings call about "programmatic" advertising on Facebook. Programmatic ads are bought through super-fast automated real-time bidding systems, as opposed to being manually placed and targeted by humans. They're a HUGE trend in the ad world right now, and generally more money is moving into programmatic.
But Sandberg just poured a big bucket of cold water on that. She said:
One thing worth noting is that FBX which is part of that programmatic selling is actually a very small part of our business and I think sometimes people don't understand that. So that piece is quite small.
The fact that FBX is either "very small" or "quite small" goes a long way to explaining why no one knows how big it actually is. It's probably not material to Facebook's results, which is why the company hasn't disclosed actual dollar numbers.
From the adbiz point of view, it also explains why it has been so hard — almost impossible — to get any of Facebook's 18 demand-side platforms (DSPs are the companies that plug ads into FBX) to admit how much money they're actually handling in FBX.
The answer: So little they're embarrassed to say it aloud.
Disclosure: The author owns Facebook stock.