Facebook Exchange Retargeting: Converting Browsers into Buyers
October 15, 2013
Let’s start with how retargeting works.
How Retargeting Works
- Users visit websites that track browsing history with embedded code in the form of “cookies” created by demand-side platforms (DSP), like AppNexus.
- The cookie’s unique ID is read as the user visits other sites, and ads for the previously viewed product are placed in their browser by the DSP.
- These relevant ads and focused marketing increase click-thru rates, ROI, and conversion by specifically targeting users further along in the spending process.
Facebook Exchange and Retargeting
Facebook Exchange’s (FBX) role in retargeting ads is simple. DSPs contact FBX with the unique ID cookie of a user it would like to retarget to its client’s site. When that user comes online, FBX reads the cookie and holds real-time bids (RTB) for marketers to purchase the right to advertise to the targeted user in News Feed and right-hand side. The user is then targeted by the highest bidder and shown relevant ad content that they have previously viewed outside of Facebook. What’s game-changing about how FBX operates is the enormous user pool at its disposal – over 1.15 billion active monthly users – and its focus on real-time engagement.
FBX’s real-time capabilities to drive direct marketing and time-sensitive products like vacation packages or TV shows that air while the user is online are growing. Ad Age reported eMarketer’s projection that “RTB spending in the U.S. will increase by 73.9%” – over $3.34 billion. FBX is primed to take home the lion’s share of that spending. As of December 2012, FBX already accounted for 45% of clicks on retargeted web ads globally. And that was when it was just in beta!
FBX is changing how ads are made by redefining for whom they’re made. Ads that previously cast a wide net by targeting general interests can now be laser-focused to leverage recent external browsing history, personal search patterns, and purchasing intent. The results are undeniable!
FBX might not be ideal for generating brand visibility (a staple of Facebook marketing to date), but it is ideal for displaying the right product, at just the right time, with the right CTA, to the right user. Retargeting dramatically increases not just clicks, but consumer spending, while simultaneously reducing CPA and enhancing the user’s shopping experience with relevant ad content. It’s a win-win-win-win.
But don’t just take our word for it:
- AdRoll reports an average ROI of 16x for its 60+ clients
- Triggit published a ROI of 4X at one-fifth the CPA
- AppNexus reduced CPA’s by 25% while increasing reach
- The Trade Desk CEO Jeff Green said, “Acquisition costs are sublime.”
- NetMining research shows that retail marketing via FBX reached 62% higher impressions, and 42% more clicks in just one quarter, with spending in sectors like travel increasing by as much as 15%.
The specificity of retargeted ads combined with real-time engagement on the largest social platform in the world is a recipe for marketing success. FBX is a proven winner even in its current desktop-only format, and with continued News Feed integration and mobile development, its relevance will only increase.