What is Facebook Exchange?

What is Facebook Exchange?

By Rob McNair

Touted as a cheaper, capable of both higher click-through and post-click conversion rates than other display retargeting solutions (including Google’s AdX), Exchange is Facebook’s way of providing a more traceable advertising format that goes beyond awareness and further towards sales.

Based on a real-time bidding system, visitors are marked with a cookie when they visit third party websites meaning they can then be shown ads relevant to their browsing within Facebook. For example, when a customer shows purchase on a particular auto retailer could then promote this to them when they’re within Facebook. The proposition is particularly valuable when the portion of display inventory and attention Facebook controls is considered – 25% of the entire web with the average user spending 46 minutes per day respectively – the result is said to be a powerful tool for driving direct response goal.

Facebook Exchange is perfect when the objective is a conversion outside Facebook and the data used to drive that objective exists outside Facebook. When brand goals like increasing awareness and favourability are the objective, Facebook’s native tools are usually a better fit because they work with all social formats and placements in addition to fan targeting.

How it Works

  • A user visits a retailer
  • When the user has shown purchase intent, a cookie is dropped on that user using a retailer’s chosen DSP* provider
  • If the user doesn’t make a purchase or the retailer wish to continue advertising to them, the DSP contacts Facebook to inform them who they wish to target
  • Retailer pre-loads creative to target that particular user/user base
  • When the user returns, Facebook recognises the cookie on the users system
  • The DSP can now bid on ad inventory within Facebook that targets this user, the highest big gets their targeted ad shown

* Demand-side platforms currently supported: AdRoll, AppNexus, Brandscreen, Criteo, DataXu, MediaMath, Nanigans, Kenshoo, Optimal, RocketFuel, Tellapart, TheTradeDesk, Triggit, Turn, Xaxis, and X+1.

Reported Performance

AdRoll noted 16X return on investment in Facebook Exchange ads on average for its clients.

TellApart reported “Hugely so, as every one of our clients on the exchange has seen a 10-20x return on investment. eBags, one of our earliest marketers to go live on FBX, sees an unwavering 15x return on ad spend. And when we say the Facebook Exchange works, understand that this is based on solid direct response data”

Triggit reported:

  • 4x higher Click-through ROAS compared to retargeting on the traditional ad exchanges
  • 2.2x higher post-click conversion rate
  • 6.5x less Cost per click-through order (CPA)
  • 18% – 30% lift in FBX conversions when comparing against control test of users


Facebook has long struggled to match the sales accountability that other online advertising solutions prevail at. This takes a big step away from Facebook’s user focus although it’s clear to see why they’re looking to capitalise on the wealth of attention the platform receives. Whilst it’s hard to disagree that Facebook has the ability to influence an individual’s perception of a brand, it hasn’t yet been able to paint a clear picture of exposure to purchase.

This post was written by Rob McNair

Rob has experience advising some of the worlds most iconic brands. He thrives on helping improving social media knowledge within organisations with the ultimate goal of making theirs brands more social, transparent and accountable.