Facebook Will Shutter Facebook Exchange (FBX)

Facebook on Wednesday said it will shut down Facebook Exchange (FBX), its desktop-based retargeting ad exchange, as of Nov. 1. FBX enables third-party ad-tech firms to purchase ads on the social network. The news was confirmed by The Wall Street Journal.

What this means is that partners buying through the FBX API will have to use a different one. This impacts companies including AppNexus, Criteo, AdRoll and MediaMath.

“Mobile is now a necessary component of effective marketing campaigns, and Facebook is helping millions of businesses understand their customers’ purchase path across devices,” Matt Idema, vice president of monetization product marketing for Facebook, told the Journal.

“Dynamic Ads and Custom Audiences have mobile at their core and are delivering excellent results for businesses, so Facebook Exchange spending has shifted towards those solutions,” he added.

Facebook has recently focused on its Facebook Audience Network or FAN, through which it began selling video ads. The pullback on FBX feels similar to the company's shuttering of LiveRail, which it acquired in 2014.

In an ad ecosystem that wants so-called “walled gardens” opened up, “Facebook is becoming more of a closed ecosystem, something we expected,” Greg Williams, MediaMath's co-founder and general manager of media, told the Journal.

Facebook's news was no surprise to Dave Zinman, COO, RadiumOne, who told Real-Time Daily via email: "This news was long predicted, but significant, as it cements the commitment Facebook is making to wall off their proprietary assets from the open marketplace. They are building a large moat around their data, inventory and identity, with the very clear goal of building an independent and fully captive advertising ecosystem.

"This makes logical business sense, but is in conflict with their consumer mission to connect people globally."

Also, FBX was primarily focused on desktop inventory, and Facebook has been more focused on mobile.

Adam Berke, CMO and president of AdRoll, weighed in on the news as well: "The writing has been on the wall for FBX for a long time. There's been limited investment in FBX for well over a year, and all of Facebook's innovation efforts have been put toward its native products. We had already moved all but a few customers over to Custom Audiences, so there's no real short-term impact for us."

Berke believes that the development cements the fact that there will be multiple standards for media buying over the long term: "There will be an open standard and there will be one or many proprietary closed standards. Obviously, if we consolidated on a single standard, life would be a lot easier for the average marketer -- campaigns could flow seamlessly between inventory and platforms.

"However, that's not the way things are unfolding, so marketers will need tools and solutions that span the various standards and platforms and help them execute their campaigns in a holistic way," Berke said.

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