Facebook’s New Retargeting: Will Custom Audiences Eliminate FBX Partners?

By Stevie Sleeter, Content & Social Media Manager

Published: October 15, 2013

This morning, Facebook announced a new custom audience feature “to help marketers reach people who have visited [their website]” through targeted advertising. Also referred to as remarketing or retargeting, this interactive business strategy offers substantial value for companies to encourage closed loop transactions and positively affect sales. With social retargeting, companies can target potential buyers who have recently visited their website and taken a key action (like added to cart) and then left without purchasing.

Retargeted ads track that visitor behavior and serve up ads via Facebook to remind them of the product or content they’ve recently left behind; a great top of mind reminder and valuable brand awareness at a low cost.

Historically, companies that wanted to leverage social retargeting to spur sales had to go to a third party source, via the Facebook Ad Exchange Network (FBX), to participate. These third party networks like AdRoll, Nanigans, and Triggit helped manage ad exchange, but not without taking a cut of ad spend.

What’s Changing?

Now that Facebook offers retargeting opportunities through features in their “custom audiences” advertising, it will be interesting to watch the future of third party ad exchange networks unfold – particularly as Facebook’s option seems to offer an advantage compared to typical retargeting with greater opportunity to target specific demographics.

Major features added by Facebook include:

  • The ability for companies to serve retargeted ads on the desktop version of the Facebook news feed, encouraging targeted users to complete a conversion online.
  • The option to target mobile users, built to help mobile app developers reach their customers on Facebook. Mobile retargeting offers reminders via the social network to people who have downloaded a company’s app and haven’t used it in a while. This is a feature not available via third party retargeting partners.
  • Demographic targeting for serving up ads, also something unavailable via other sources. For example, if a woman is shopping on our site for lawn mowers around Father’s day, we can design an ad that speaks directly to her assumed situation rather than retargeting her with an ad that is general and must speak to everyone who has potentially visited our site. It’s a key consideration of content and context.

We are curious see how Facebook Exchange partners end up playing a role in this shift. Will they phase out as Facebook takes control with their own version of retargeting that eliminates any sharing of revenue with partners? According to Facebook, they see their new features as complementary to Facebook Exchange partners.

“We anticipate that marketers will use FBX and website and mobile app custom audiences in different ways. For advertisers who have a large number of products and advertise to multiple audiences, FBX is the better solution. For businesses that don’t typically work with third parties, website and mobile app custom audiences will allow them to show ads to people who have been to their site or mobile app and still utilize Facebook’s targeting abilities.”

It’s definitely a business move to keep our eyes on. Facebook will roll new custom audience features out to a limited group of beta advertisers over the next few months. We are excited to test out Facebook’s foray into retargeting. How have you leveraged this type of social advertising?