Facebook To Allow Real-Time Bidding, Launches ‘Facebook Exchange’

facebook exchange

Facebook has signed deals with a number of demand side platforms to enable real-time bidding on its ad inventory, AdExchanger has learned.

In an offering called Facebook Exchange, the company plans to let advertisers deliver impression-level targeting to Facebook users who they have previously cookied elsewhere on the web. It’s the first time audience buying has been possible on the platform.

The DSP deals, confirmed to us by Facebook, come with limitations that make it quite different from a typical website DSP practice. For one, ad formats will be limited to Facebook’s native ad types, in particular Marketplace ads, and mobile inventory will not be accessible – at least not initially.

And DSPs and clients will only be able to use information they have in-house or through data partners. None of Facebook’s contextual or affinity-based targeting options are available. For instance,  a travel website can retarget a user who abandoned a travel search for Hawaii through a DSP partner but can’t target people on Facebook who like “Hawaii.”

In many cases, campaign creative may be delayed as it wil be subject to Facebook’s normal review process, which is a combination of human and automated review.

Speaking with AdExchange, Facebook said it believes bidding on a specific impression rather than a larger group is a great way for Facebook advertisers to show more relevant ads while maximizing efficiency and effectiveness.

“We think more relevant ads are better for people, and this is just another step in that direction,” said spokesperson Annie Ta.

Facebook has not yet confirmed which DSP partners will have access to its ads, but Update: The list of DSP partners includes Triggit, TellApart, Turn, DataXu, MediaMath, AppNexus, TheTradeDesk and AdRoll. Facebook says it has purposely limited the number, in part to safeguard user privacy. One notable exclusion from the list is Google’s Invite Media, now known as DoubleClick Bid Manager. If Google has indeed been locked out of Facebook Exchange, it would be one of the few times it has been put back on its heels in the programmatic media environment.

Google’s exclusion would be in keeping with Facebook’s earlier decision to barr AdSense as a monetization option for app developers. AdSense and DoubleClick are still absent from the company’s approved ad providers list, though many have reportedly continued to use it without a punitive response from Facebook.

MediaMath CEO Joe Zawadzki said, “For advertisers and agencies who use buying platforms like MediaMath to optimize their marketing, with the Facebook Exchange now they can expand their reach to harness the quality and scale of Facebook, while continuing to target using their audience data they have collected, to build a relevant, efficient and complete marketing programs across channels”

The move opens up Facebook inventory not only to retargeting campaigns, but to any RTB type campaign – including sequential messaging efforts designed to reach individuals who have already been served an ad elsewhere.

– Zach Rodgers

More on Facebook’s Exchange

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  1. This is big. Very big. And continues the inevitable march towards more biddable media. Science. It works. Congratulations to you know who…..

    • Mr. Kawaja- how will this development impact the LUMAscape? Do you see more acquisitions on the horizon?

  2. Pradeep Javangula

    What data is going to be exposed here in the RTB call? Creative not being a part of what is served is a significant pain…

  3. Given Facebook is 900M users and, massive time on site, this could become the 2nd biggest direct response channel for Google’s bread & butter top 5000 advertisers. It’s really just a question of how fast the partners FB works with can scale to handle the immense size of inventory FB brings to the table.

    Terrence – S-C-A-L-A-B-I-L-I-T-Y to Facebook’s size is now the ID required to have a spot on the real-world display ecosystem. Delete your map and start over, ’cause only a handful will have it.

  4. Wow – big news – big enough to warrant a ‘breaking’ email. I mainly have questions as opposed to answers at this point…

    – Which DSPs? Did Invite get the invite? Did FB just pick the winners in the DSP space? Will be interesting to see…
    – This is the second big consolidation move in the last 2 weeks with DCLK DDM being the other. Maybe there is hope for all Lumascape haters after all?
    – What does this mean for social buying platforms/DSPs?
    – How do agencies react? Do ATDs get social budgets? (Disclosure: I work for an ATD)
    – For the DSPs involved here, do they become more like DMPs – i.e., platforms that consolidate and share data from multiple sources/channels. Do the lines blur between DMP and DSP? (Apologies for the 3 letter acronym abuse in this question)
    – Since FB is public, how will markets react (if at all)? Perhaps a directional indicator of what wall street thinks of the RTB space’s IPO potential?

    Looking forward to hearing the thoughts of the adexchanger audience.


    • I dont think the DSPs will be able to target on users based on Facebook data, to start. Sales Funnel retargetting being extended to Facebook users thru Marketplace Ads could be very interesting with the massive reach that Facebook has. Assuming of course users in Europe do not opt out of the DSP cookies when the new law comes into effect.

  5. Turn_dude

    Hmm, “None of Facebook’s contextual or affinity-based targeting options are available. ” Bummer.

    To add to this–In the past, FB didn’t allow cookie-based remarketing at all. If this is to work efficiently, they are going to allow the use of Data Providers. But, does this mean they will allow the use of Turn and other “third party” cookies?? Otherwise, it’s all this access to inventory but little you can do with it..

  6. This is such exciting news in the world of online direct response advertising. I can’t type, gotta call my partners!

  7. So, Facebook “re-targeting” begins! Finally will be able to close the loop between corp web site visitors and Facebook pages. Nice!

  8. With biddable media coming to FB, the precise interests (which the DSPs can’t correlate with yet) of each users may create their content to become premium content.

  9. This is great news! Users can now be served intent based ads. Not too worried about FB not allowing access to its demographic data/etc, I’m not sure how useful it is anyways compared to purchase intent. I have always been surprised why FB has not made any big ticket ad tech acquisitions so far. I am guessing, we should see this in the next few months. Once FB tastes success in the ad exchange model, they would want to build out other parts of the stack.

  10. Paul Bland

    This is very big news, it will open up Facebook’s billions of ad impressions to both impression based tracking and to enable audience targeting available on practically every other commercial site out there.

    Looking forward to data being passed back the other way. For example, targeting users who’ve liked a brand elsewhere on the web, or using facebook’s audience data to measure the effectiveness of a campaign.


  11. Gavin Deadman

    Very exciting news. Can’t wait to test this out using MediaMath’s algorithm, global freq. capping and post view optimisation towards our high value customers.

    Amazing that MediaMath have the exchange already in their T1 UI.

    Interesting that Invite Media hasn’t been chosen as a DSP partner.

    Next step is to integrate paid search into DSPs.

    • Gagarin

      Wow. MediaMath has FBX already in their UI… and the exchange isn’t even live! And MediaMath can handle your EU campaign… even though Facebook says it’s US only for now.

      Gawd. It’s no wonder people are so fed up with ad tech companies. They’ll say anything to close the deal.

  12. Great news, finally a serious competitor for Google/Adsense, I believe they have been locked out…..there really is an advertising God.