As FBX Goes Dark, Future of Programmatic Is Bright

Back in July of 2012, we started working on a secret project with Facebook that would end up becoming its RTB ad exchange called Facebook Exchange, or FBX. Now, we’ve officially come to the end of the road for that project.

To be clear, this move should be a surprise to no one, and will have a limited short-term impact on the average marketer. Facebook hasn’t been too subtle about its intentions over the last 12 to 18 months, as all of the company's innovation in marketing tools has been in its native platform.

In the intervening years since we were part of the launch of FBX, we’ve migrated all but 2% of our Facebook spend away from FBX and onto Custom Audiences. The remaining 2% will now move along with the rest.

Longer term, however, there are some interesting questions. There was a moment (albeit brief) where it appeared the system might be moving toward a single standard for digital media buying--namely, RTB. As with any wave of standardization, this would’ve had the promise to take a lot of complexity out of a notoriously complex ecosystem, but alas, that is not how things have turned out.

With Facebook’s move to officially shutter FBX, it would seem that, at least for now, we’re moving to a world where there are multiple media buying standards: an open standard used by multiple platforms, as well as (at least one) proprietary standard. It remains to be seen the approach emerging players like Snapchat and Pinterest will take. There are certainly forces that will pull them in both directions.

So what does this mean for everyone else? Well let’s start with the obvious one, Google. In terms of direct impact, the most obvious change will be felt by Google’s buying platform, DoubleClick Bid Manager (DBM). Even before this news, DBM came under criticism for not being a truly neutral platform.

Facebook's move only strengthens that argument, since the only access DBM had to Facebook (the largest single publisher on the Web) was through FBX. All the issues around being both an owner and seller of inventory aside, not having access to this major inventory source provides a serious obstacle to being a truly neutral buying platform.

The other big question is how this will affect the rest of the marketing-tech ecosystem. Inherently, entrepreneurs are an optimistic bunch, but I tend to see the positive side of this move. For one, it removes ambiguity. Maintaining two buying systems for the same inventory source is confusing and costly.

More importantly, Facebook's shuttering of FBX highlights the value proposition of neutral platforms. This move makes executing, optimizing, and measuring campaigns across platforms more difficult and confusing, and presents an opportunity for truly neutral players to step in and help solve those issues.

Marketers don’t care that Facebook and Google are competing in certain areas. Advertisers just want to maximize the impact of their marketing dollars and for their campaigns to run intelligently and cohesively across channels. The more these two behemoths lock each other out, the more difficult they make it for an advertiser to achieve that goal. They also intensify the need for neutral players without a horse in the race to optimize for one purpose, driving results for the advertiser, regardless of whether it benefits Google or Facebook.

So while many will look at this move as a rejection of the open ecosystem, with Facebook becoming more closed off, it will also have the effect of highlighting the importance of neutral players. As Facebook and Google grow and continue to try to play expanded roles, more conflicts will arise. Neutral players who are entirely focused on the advertiser have an increasingly important role to play as this dynamic unfolds.

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