FBX Drives Lower CPMs, Web Retargeting More Clicks

With the launch of Facebook Exchange (FBX) last year, Facebook began allowing marketers to target audiences on the social network, based on their browsing activity on the wider Web. Since formally launching in September, the real-time bidding platform has attracted 1,300 advertisers and is now processing over 1 billion impressions per day.

Facebook and its ad partners have reported promising early results from FBX campaigns. The optimism surrounding the new platform has given rise to the question of whether marketers should shift their retargeting spending entirely to FBX.

To test that idea, AdRoll -- which has over 700 advertisers running on FBX -- compared results from that platform with those from standard Web retargeting efforts.

AdRoll looked at 468 advertisers that ran both standard Web retargeting and FBX campaigns during the last six months of 2012. It found that FBX generally proved more cost-effective:

-CPMs were 82% lower than through Web retargeting.

-CPCs were 70% lower.

But Web retargeting was superior in other ways:

-Click-through rates were higher (FBX was 40.18% lower), requiring less ad frequency to drive attention and clicks.

-Cost-Per-Unique Visitor was lower (FBX was 86% higher), indicating that Web retargeting reaches a larger, more distinct audience for less spend.

“Most surprising, when we compared audience overlap among the campaigns, we found that on average, only 8.3% of an advertiser’s total audience was retargeted by both their FBX and their standard Web retargeting campaigns,” stated AdRoll in a blog post today.

The firm concluded that two retargeting methods have their relative strengths, and that leveraging both makes sense to maximize return on investment.

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2 comments about "FBX Drives Lower CPMs, Web Retargeting More Clicks".
  1. Mike Einstein from the Brothers Einstein , February 22, 2013 at 9:08 a.m.
    Talk about a tallest midget debate. The idea that CTRs via FBX are 40.18% lower than those via Web retargeting is a scary thought. If we assume a .06% avg ad CTR on Facebook, the avg CTRs with FBX (after reducing by 40.18%) hover somewhere south of .04%. On the other hand, who can doubt the precise targeting of the 1-in-2500 that actually click through on the FBX ads? Stated another way, the 468 advertisers that participated in the study would collectively require 1,170,000 impressions to generate an average of a single response each!
  2. Domenico Tassone from Viewthrough Measurement Consortium , February 23, 2013 at 11:17 a.m.
    Great point Mike...too many digital marketers still obsess about CTR, a success metric that comparable to the odds of getting a full-house in 5-card poker (0.14%). For some media and advertisers, it is actually closer to getting a four-of-a-kind (0.024%). Time to upgrade and think about passive reponse, i.e. viewthrough: http://viewthroughs.blogspot.com/2013/02/stop-stressing-about-clickthrough.html