How Facebook Became An RTB Game-Changer

by Jeff Green, Nov 16, 2012, 10:43 AM

• Comment (1)
• Recommend (2)
• Tweet
• 

Much has been said about the Facebook Exchange since its summer debut. Facebook’s power as a social media tool and advertising moneymaker are impossible to ignore. But one side of the storyline that doesn’t receive as much attention is what the Facebook Exchange means for the future of real-time bidding (RTB).

In short, it’s a massive game-changer. Many have said that the Facebook Exchange would be the final straw or deciding factor in enticing people to adopt RTB. It’s much more than that. This is what will force publishers to use RTB.

I often mention the macroeconomic components of RTB and how there’s more supply than demand, creating a buyers’ market. The buyers are thus powered to demand exactly what they want for inventory, and how they’re going to go about getting it. More and more buyers have said they want to employ RTB, causing publishers to sell in this way. Said simply, RTB is growing like a weed primarily because the demand side has required it — if you want my demand, sell via RTB. 

With Facebook entering the picture, our ecosystem has taken an enormous step forward in the direction we were already headed. The inevitable conclusion is accelerating. 

Numbers alone can paint an authoritative picture. It’s been nearly two years since comScore data showed that 35%  of U.S. impressions were RTB-delivered. That’s a pretty significant number, even standing on its own, and without accounting for the amount it’s grown since. Now add in a whopping 25% more from the Facebook Exchange, which is what happens when you assume Facebook adds their entire swath of standard inventory to the exchange. Since Facebook needs all the demand it can get (it has a lot of ads), it’s reasonable to believe that its inventory would be universally available in the fastest growing demand source: RTB. So that gets you to over 50%. 

When you reach and then cross that 50% plateau, you’re at a tipping point where people simply have to be involved in RTB. If you were a demand source that didn’t want to buy, it’s hard to ignore now. Certainly, there are publishers that kind of wish RTB never was. It’s an unfortunate thing for them, but this is the world we now live in. ESPN put its toe in the water in the Google Ad Exchange and have now announced a private exchange, signifying that it’s all in. Microsoft tried to kick and scream away from RTB, but now that it’s involved, it’s doing phenomenally well.

One lesson here is that RTB remains a better way to buy. There are some sophistication problems and people have to understand it, but that won’t stop the changing tide. Publishers are simply running out of reasons to avoid it. Even the argument that some content is premium and needs to be sold directly won’t make RTB any less attractive. 

Facebook hasn’t even made 100% of its impressions available through RTB yet. The company’s commitment and status as a social media force will make it very easy to grow into RTB, and to help blaze the path that RTB is currently on. The Facebook Exchange will also increase in size at a faster pace than any ad exchange before it. It’s a proving ground, and a place where case studies are born.

RTB was the way to go even before Facebook, but with Facebook now involved and the buyers’ market sticking around for the foreseeable future, this suggestion will be made even clearer. The inevitable is picking up the pace because FBX is a game changer. 

 

• Comment (1)
• Recommend (2)
• Tweet
• 

1 comment on "How Facebook Became An RTB Game-Changer".

1. Domenico Tassone from Viewthrough Measurement Consortium
   

   commented on: November 17, 2012 at 11:10 a.m.
   Great post Jeff...thanks for sharing this. It will be interesting to see what incremental "social" data may be available for targeting via FB or as a standalone product.

Leave a Comment