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How Big Is FBX Anyway?

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Sheryl-SandbergIn its year of existence Facebook’s ad exchange has earned a reputation as an ATM machine for Facebook, and even something of a savior during the company’s rocky post-IPO period. But comments by COO Sheryl Sandberg throw that image into some doubt.

During yesterday’s earnings call, she noted, “FBX is actually a very small part of our business.”

Is FBX big or is it small? Forrester Research analyst Susan Bidel points out it could be both.

“FBX can be a small part of Facebook’s business but remain important for ad tech companies, specifically because marketers remain deeply committed to retargeting potential customers in the Facebook environment,” Bidel said. “Which means work and revenue for a host of DSPs and data vendors all participating in tracking users and serving those ads.”

Eric Franchi, co-founder of the online advertising company Undertone, agreed. While speaking from an outsider’s perspective, since Undertone does not currently use FBX, Franchi noted, “some folks may be evangelizing it [FBX] because that’s where they see the opportunity for their business as FBX clients or representers or platforms.”

He continued, “On the other side of the coin, for that segment of the market that is very focused on RTB and direct response, FBX is a growing portion of their spend, but what we think is pretty large could be relatively small to Faceboook when they have a $1.8 billion quarter.”

Sandberg noted that the company will continue to invest in FBX. “We are expanding both our direct selling efforts, as well as the third parties we work with,” she said. “And we think having a healthy and growing ecosystem on both sides is really good for our business.”

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