Google selling FBX ads – what it means

So what’s behind this sudden (and downplayed, at least by the two main parties) union of Google and Facebook ads?

Simple– marketers and ad agencies are lazy. Facebook has to make it easier to buy inventory, and allowing DoubleClick into FBX makes complete sense. All else equal, I don’t want to have to use multiple buyers for my paid search and display.

Moreover, adding more bidders to FBX will increase competition and lift average CPMs. Facebook’s right-hand side (RHS) inventory has been at 60 cents, while general display inventory is often over $4, so there is plenty of room for price increases.

Programmatic ad buying and cross-channel marketing optimization are forcing these awkward partnerships.

Dennis Yu

About Dennis Yu

Dennis Yu is the Chief Technology Officer of Portage. He is an internationally recognized lecturer in Facebook marketing, having been featured in The Wall Street Journal, New York Times, LA Times, National Public Radio, TechCrunch, Fox News, and CBS Evening News. He is also an author at InsideFacebook and AllFacebook. Dennis has held leadership positions at Yahoo! and American Airlines. He studied Finance and Economics from Southern Methodist University and London School of Economics. Besides being a Facebook data and ad geek, you can find him eating chicken wings or playing Ultimate Frisbee in a city near you. You can contact him at dennis@portage.co, his blog, or on Facebook.
This entry was posted in Most Read, News and updates. Bookmark the permalink.

4 Responses to Google selling FBX ads – what it means

  1. Agree with you 100% on both fronts, Dennis; this is about FB wanting to get more spend onto its inventory, faster. Your point about consolidating vendors is dead wrong, though, at least for the big direct response advertisers that have enough scale that they can handle it.

    To use a Monopoly analogy, Google’s at the point in the game where they finally own the blues, the yellows and the reds. FB has the greens and everyone else is fighting over lesser properties and utilities. Andrew Chen’s Law of Shitty Clickthroughs (online marketing’s equivalent of Moore’s Law) states that all marketing channels start out great and then suck over time, leaving advertisers no choice but to aggressively attack new channels before they suck. FBX is that new channel, and because Google will neither do right by the advertisers’ ROI metrics (which is to say, spend more on FBX than Google AdX) nor enable fully dynamic ads, the top 5000 AdWords advertisers – who make up two-thirds of G’s revenue – will need the best solution to fight off Chen’s Law.

  2. Dennis Yu says:

    Wow– Chris, you are fast.

    Yes, I agree with you on the point about sophisticated direct marketers– folks who have the scale to build their own tools to squeeze out every penny. But for the masses, they don’t have time or budget. Even big brands rely upon old vendor processes, as you and I both have had lots of experience with!

  3. mark tull says:

    Hi Dennis, long time no see… FYI Google has rolled out into Yahoo 7, the Australian Version of Yahoo SM and is now providing them their search content as a google partner.. Facebook next perhaps as part of world domination?

  4. Dennis Yu says:

    Mark– yes on Facebook as the contender for review domination. Hope you’re well and that we can work together officially some time!

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>