Transitioning from Facebook Exchange (FBX) to Dynamic AdsFacebook’s shuttering of FBX heralds the maturation of mobile-friendly, people-based approaches for digital advertising.

Brian Boland, Facebook VP of ads product marketing and Atlas, created a stir at Ad Age with his article “Facebook Exec: Cookies Don’t Cut It Anymore for Online Ad Measurement.”

In his article, he says, “Here’s my prediction: We’ll look at cookie-based measurement in two years the same way we look at a tricked-out 1992 Dell today — antiquated and inefficient. Alternatives to cookies … will be the way that marketers measure campaigns. This is the future of measurement, especially in today’s mobile world.”

Brian’s quote came as a wake-up call for advertisers on Facebook’s FBX, launched two years previously at the height of programmatic interest. In 2012, FBX was the first social real-time bidding (RTB) solution and provided a direct response channel into the growing Facebook audience.

FBX was an early success for right-column programmatic marketers, but had two limitations: it was solely cookie-based, and desktop-only.

As predicted by Brian, 2016 is bringing new marketing realities to the fore. Reaching the same audience across devices is a significant hurdle to solve.

Every digital marketer understands the rising tide of mobile, but some may not understand Facebook’s scale. As of their Q4 2015 earning report, 51.7% of Facebook users were exclusively mobile, while over 90% of their monthly active users were mobile at least some part of the time. That last figure nets out to about 1.4 billion monthly mobile users.

Without mobile support, scratch FBX.

Bombshell: dateline 2014

Backwards FBX: cookies, not people

Mobile killed the radio star

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REPLACING FBX: PEOPLE, NOT COOKIES

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Facebook now offers more compelling performance alternatives and more interactive ad formats than it did when FBX launched in 2012. The best practice today is to combine user signals to create a Facebook Custom Audience, and couple that with the marketer’s product feed in a Dynamic Ad.

Custom Audiencesallow a you to combine different methods to compose an audience segment, including cookied-behaviors from web browsers, social logins, API-integrations with FMPs, and CRM-based 1st party integrations. These Custom Audiences are tied to persistent ids, are mobile and desktop friendly, are device independent, and are the basis of Facebook’s people-based approach for targeting and measurement.

02Dynamic Adsare a template-based approach tied to a marketer’s product catalog and Custom Audience segments. These ads can provide a native impression inside the news feed, support cross-device retargeting, and even allow deep linking into apps. And when a user buys a product, that ad stops being served to that user.

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THE KENSHOO VIEWKenshoo is excited by Facebook’s commitment to a strong mobile-friendly, people-based approach. Kenshoo has been supporting Facebook’s core innovations and adding complementary solutions that enhance the audience-focused approach.

In 2014, we launched our award-winning Intent-Based Audience solution, which creates Facebook Custom Audiences from recent search activity for an advertiser’s products. And in Q1 2016, Kenshoo announced Infinity Tag, which reveals more contextual data to help marketers understand audience path-to-purchase flows. Both of these solutions contribute to an accurate cross-channel signal-rich segmentation strategy that is crucial for increasing ad relevancy.

We’ve also seen Dynamic Ads take off with Kenshoo’s clients. In our Q1 2016 Digital Marketing snapshot, we noted “Paid social spend actually increased from Q4 to Q1, running counter to normal seasonal patterns and demonstrating the advertiser appeal for new offerings like Instagram and Dynamic Product Ads.”

Kenshoo is also supporting Facebook’s Dynamic Ads for Travel which brings this approach to the travel vertical, and Dynamic Ads for Instagram which extends this performance approach to the Instagram platform.

Kenshoo’s clients have always favored a more native, performance-driven mobile approach. While FBX will go away this November, we expect continued success from these latest audience-focused innovations in the quarters ahead.

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WHY SWITCH FROM FBX TO DYNAMIC ADS?Facebook launched Dynamic Ads in the last year which is a more robust solution than FBX. Dynamics Ads can be used for all placements including mobile news feed, Facebook audience network, and Instagram, whereas FBX is limited to only desktop news feed. This opens up opportunity for greater inventory and scale beyond FBX alone.

Dynamic Ads also allow for greater control over bid strategy including CPC, CPM, and oCPM bidding, whilst FBX only supports CPM. Also, unlike FBX, Dynamic Ads allow for cross-device targeting. In addition, Website Custom Audiences can be used to build specific audiences based on site visits and/or user events.

Kenshoo has fully supported Dynamic Ads for over a year, and has worked with several clients on ground-up implementations with significant Return on Ad Spend (ROAS) incrementals over non-Dynamic Ad campaigns, proving the necessity of this switch.

WHAT IS REQUIRED TO LAUNCH DYNAMIC ADS?Facebook requires two main elements to launch Dynamic Ad: a product feed and Facebook pixel configuration. Most search clients opt to use their product feed from Google Product Listing Ads (PLAs). Facebook has built their integration to support Google Merchant Center (GMC) feeds and bespoke product feeds in many formats.

The Facebook pixel is universal. There is no need for additional pixel placement for Dynamic Ads, compared to FBX. If you already have the Facebook pixel placed across the entire site, then it just needs to be configured for Dynamic Ads.

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While Dynamic Ads rely on the use of a product feed, there are other options. Facebook has recently enhanced Website Custom Audiences to allow for advanced targeting options such as frequency of site visits or events. You can also exclude audiences just as you would with FBX. By leveraging Website Custom Audiences, advertisers have more control of their targeting, more flexibility to capture insights, and is a more powerful solution than the FBX pixel.

Yes! Kenshoo and Facebook co-developed a hybrid of PLA and Dynamic Ads to make it easier for advertisers to go live with Dynamic Ads. With Kenshoo’s Performance Driven Ads, if an advertiser is currently running PLA through Kenshoo, our tool can build product sets of top-performing PLA products to use for Dynamic Ads on Facebook.

Since Dynamic Ads require a product feed, we recommend leveraging the advanced Website Custom Audiences option. You can mirror the placement of the FBX pixel by setting your Website Custom Audiences to a specific URL or event. From there you can use the same static ads you used for FBX, targeting the new Website Custom Audiences.

What if I don’t have a product feed?

Does Kenshoo offer a solution to leverage my existing Google PLA feed for Dynamic Ads?

FBX is great for time sensitive promotions. How will Dynamic Ads solve for this?

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It made a lot of sense to have the Display team managing FBX, as the execution of the media buying is very similar to any other Display buying practices. With this sunsetting of FBX, we believe many companies will transition the ‘retargeting’ part of FBX to their Social team or Search team. This is mainly due to the experience they have in buying on Facebook through native targeting and bidding capabilities, and being familiar with solutions like Kenshoo. We are already seeing some of this transition with early adopters of dynamic ads.

We have helped several clients launch Dynamic Ads from the ground up. One in particular was a large e-Retailer in EMEA. We worked with the client, their Facebook reps, and their feed vendor to go live. This client has been live with dynamic ads for several months and ROAS has surpassed non-DPA campaigns by 71% and CTRs by 62%.

FBX is currently managed by our Display team. Should this be part of the Search, Display or Social marketing team?

Do you have an example of clients transitioning from FBX to Dynamic Ads?

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HOW DO YOU RECOMMEND STRUCTURING A DYNAMIC ADS CAMPAIGN?While every client objective is different, it’s best to evaluate the products you are trying to promote. It’s recommended to segment your product feed by mid-level categories so you have more control and visibility over performance. With Dynamic Ads, you have more bid strategy options including oCPM for Product Catalog Sales.

For more best practices on Dynamic Ads: http://kenshoo.com/kenshoos-best-practice-guide-to-dynamic-ads-2/

Other materials for reference:http://kenshoo.com/inventory-management-just-got-even-better-with-dynamic-pro-duct-ads-for-instagram/

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