A Closer Look at Facebook Exchange and Real-Time Bidding (RTB)
Ryan Buddenhagen, August 1, 2012
As reported extensively last week when Facebook’s quarterly earnings were made public, they are actively looking for additional ways to increase their revenue from all corners of their business. Our CEO, Ken Wisnefski talked with Bloomberg TV about Facebook, their latest earnings, and the direction of the company going forward. Check out the video here, and the follow-up blog post that discusses some of Ken’s additional ideas. All eyes are on Facebook to determine if they will be able to initiate winning programs and added revenue streams. A primary aspect of this process is finding new, viable ways to advertise on the platform. In this vein a promising offering is Facebook Exchange, their new Real-Time Bidding (RTB) service.
RTB is where both marketers and advertisers have the opportunity to purchase digital ads in real-time. This allows advertisers to buy targeted ads based on real-time data they are receiving about what Facebook users are doing and where they are going elsewhere on the web. Armed with this information, advertisers can target users specifically based on actions they have been making and those that they are likely to make in the future. By knowing where they have been and what they were doing, for example looking at or searching for certain types of products, it can be ascertained what they are interested in buying right now.
And that is the difference. The real-time element changes the game; as the immediacy of these online actions forces advertisers to act fast in order to capitalize on a closing purchase window. This process can prove lucrative for both Facebook and the advertisers themselves as they traditionally see greater return on investment with such ads. Full details regarding Facebook Exchange are not fully available, but there is buzz and it is mounting. When it arrives in its full capacity, it could mature Facebook’s advertising suite, providing greater confidence of its overall viability as a company.
And the next frontier…could very well be video. According to Forrester, digital video advertising will likely hit $5.4 billion by 2016, representing an increase of 250% over the video spend in 2011, and is 5% of the amount spent on TV. It appears Facebook Exchange will deal with image-based ads to start, but capitalizing on the power and emergence of video, could be the next move.
Reach out to me directly at rbuddenhagen(at)webimax.com for more detail on this subject.