The news today from Facebook, revealing that it is fast becoming a mobile-first platform, goes a long way to explaining the rumours last week that the company is planning to abandon its ad exchange, FBX, just three years after its inception.
David Fischer, Facebook’s Vice-President of Advertising, was quoted this week as saying there are “better ways” to reach the wider Facebook audience than FBX.
At the time, it seemed an astonishing statement, given FBX, when launched in 2012, was intended to be the primary way in which Facebook would enable advertisers to reach its users away from the Facebook portal, but perhaps it is merely the site acknowledging that mobile ads for a mobile platform really are the way forward.
A desktop dilemma
Facebook intended to use FBX for audience retargeting, but its technology was built for desktop advertising. Today, the majority of Facebook’s traffic is mobile. In December 2014, Facebook had 745 million daily mobile users, an increase of 34% since December 2013, according to eMarketer.
Its mobile ad revenues of $2.48bn represent 69% of Facebook’s entire advertising revenue in the fourth quarter. With eMarketer expecting mobile revenues to reach almost $11bn in 2015, this trend towards mobile is only going to accelerate.
What Facebook has revealed is that desktop advertising technology is largely unsuited to mobile ads. Consequently, as mobile use continues to grow, FBX is becoming increasingly redundant.
Cookies are crumbling
The impending obsolescence of technology built for desktop advertising is a big problem for many publishers and ad tech companies, not just Facebook. Cookies, the small text files that websites use to track your browsing habits, are core to desktop advertising. But cookies don’t work with apps. Since eMarketer figures state how 80% of mobile ad impressions are inside of apps, any technology that is reliant upon cookies is largely useless for mobile ads.
Ad exchanges that have been custom built for mobile, like Axonix, use the unique user identifiers built into the Android and Apple operating systems to facilitate the targeting of mobile ads. Facebook’s decision to abandon FBX clearly demonstrates its belief that its desktop ad exchange technology simply does not work with today’s mobile-orientated user base.
Technology that has been built for mobile provides an optimised mobile advertising experience for consumers, advertisers and publishers. Specialist tech delivers better targeting, so ads become more relevant to the user, increasing the value for both consumers and advertisers, and delivering a higher price for the publisher.
As Facebook has proved, publishers and advertisers who continue to assume that their desktop technology partners can handle mobile are missing out on an extremely valuable opportunity to improve their mobile advertising effectiveness. Companies that instead opt for specialist mobile technology will be in a much better position to capture the full opportunity in 2015.
This article was originally published here.