Pineapple Express: If You Care About The Display Ad Market, Take A Hit Of This
by Joe Mandese, Mar 19, 2013, 7:39 PM
That giant sucking sound you’ve been hearing in the online display advertising marketplace apparently has been coming from where the pineapples grow. No, not Hawaii, but Menlo Park, CA, where Facebook is headquartered. The reason for the cryptic pineapple reference is that’s the new code word industry insiders use when they want to refer to Facebook’s business practices, when they are under contractual obligations not to mention the company by name. Actually, “pineapple” became the running joke during the OMMA RTB conference I emceed in San Francisco Monday, whenever anyone wanted to refer to anything that was somewhat NDAable.
The reason I’m using it here is because Facebook appears to be a primary culprit behind the slowdown in the online display advertising marketplace overall, including the RTB portion of it. Now don’t freak out when I say RTB is “slowing down,” because when I pointed that out after Brian Monahan’s opening keynote at OMMA RTB, I think some people overreacted to it. Monahan, who is managing partner of the intelligence practice at Interpublic’s Magna Global unit, was updating a benchmark forecast he made for RTB at OMMA RTB last year, which he took down from his original 2013 growth rate of 40% to 39%. That’s not exactly a market crash, if you know what I mean.
And from what I could discern, the launch of Facebook’s FBX Exchange has been a major factor in the process, dumping so much high quality inventory on the market, at what apparently are super cheap rates, that it’s had the effect of ripping a parachute cord on the overall marketplace. While some speakers put FBX’s CPMs at under $1, those on the FBX, er pineapple panel, said they were actually as low as tens of cents. No wonder the overall online display marketplace has slowed to an 4% rate of expansion, according to recent data compiled from the major agency holding companies by the Standard Media Index.