FBX by The Numbers June 2013

Facebook Exchange News Feed by the Numbers
The Ultimate Performance Marketing Report for Retargeting in the Center of the Social Web June 2013
Authors: Adam Berke, President, AdRoll Jonathan Lau, Content and Marketing Manager, AdRoll Tom Pitts, Marketing Analytics Manager, AdRoll
The #1 Retargeting Platform
Facebook Exchange News Feed by the Numbers The Ultimate Performance Marketing Report for Retargeting in the Center of the Social Web
June 2013
Executive Summary
Because of its proven return-on-investment (ROI), marketers have increasingly adopted retargeting as a marketing channel. With the launch of Facebook Exchange (FBX) last year, these marketers were able to harness the power of retargeting on Facebook with right-hand side ad units (RHS)something not previously possible. Earlier this year, Facebook expanded FBX by introducing retargeting into its most prominent real estate, the News Feed. In order to produce the most comprehensive research currently available, we looked at over 1 billion impressions from a set of 547 advertisers running retargeting across all 3 types of inventory: FBX right-hand side, FBX News Feed, and standard web retargeting. The most notable findings include: News Feed retargeting had a click-through rate (CTR) 49x higher than RHS and 21x higher than standard web retargeting. News Feed CPCs were that of RHS campaigns and 1/5 of web retargeting. News Feed grew from 0% of our overall clicks to 15% in one month. News Feed and RHS complement one another and result in an overall increase in clicks at a combined lower CPC. News Feed alone doesnt have the reach or scale of RHS or standard web, and should therefore be used in conjunction with the other channels. News Feed has different applications from RHS. Its ideal for content marketing and promotions (which can capitalize on social features) while RHS is best suited for dynamic product ads driving direct response.
Facebook news feed retargeting drastically outperforms any other retargeting Ive done both on click-throughrate and cost-peracquisition.
Ryan Bruss Customer Acquisition
972 Mission Street, 3rd Floor San Francisco, CA 94103 1.877.7AdRoll press@adroll.com www.AdRoll.com
June 2013
Table of Contents
Introduction 3 What is Retargeting? 4 What is Facebook Exchange (FBX)? 5 FBX At-a-Glance FBX Ad Units
What are FBX News Feed Ads? 6 Page Post Link Ads FBX Page Post Visibility Frequency and Scale
Social Elements of News Feed Ads 8 Comments, Likes, Shares Virality
Key Performance Metrics 10 Click-through rate (CTR) Cost-per-click (CPC) Click-through conversion rate (CTC rate) Click-only cost-per-action (CPA) Blended cost-per-action (CPA) Post-launch Performance
AdRoll Inventory Analysis 13 Additional Resources 14 About the Authors 14
June 2013
Introduction
Over the past few years, retargeting has emerged as a must-have direct response marketing channel for just about every online business. Expanding beyond its initial adoption by large retailers, businesses of all sizes and all verticals have benefited from leveraging consumer behavioral data from their site for ad targeting. During this same period, Facebook emerged as a powerful vehicle for advertising with innovative targeting capabilities and never before seen ad units that included social components. These native ad units grew in popularity because of their prominent location, ability to scale, and high engagement rates. However, this massive volume of inventory remained siloed from other performance-oriented campaigns, and created a particular blind spot for retargeting efforts. Facebook Exchange (FBX) changed all that. Officially launched in June of 2012, FBX has quickly become a near-requirement for any ROI-driven marketer. For the first time ever, advertisers could use customer intent data gathered from their websites for retargeting on Facebook. When Facebook initially debuted FBX, the only ad unit available was right-hand side (RHS) ads. Advertisers quickly adopted these units and, in May of this year, Facebook made advertising on its most premium placement, the News Feed, available through FBX. Once again, the retargeting game changed for marketers. Today, advertisers can combine the most effective display ad targeting strategy with the most engaging ad unit. We analyzed campaigns from 547 advertisers serving over 1 billion ad impressions to measure how retargeting in the News Feed compared to the right-hand side FBX placements as well as traditional display inventory from ad exchanges such as Googles DoubleClick Ad Exchange, Yahoos Right Media Exchange, and AppNexus among others.
We have seen more customers begin to use FBX. And we recently launched FBX in News Feed on desktop. We think this will continue to drive the advertisers options, given that we generally see higher engagement for ads in News Feed.
May 2013 Q1 earnings call Sheryl Sandberg Chief Operations Officer
June 2013
What is Retargeting?
Retargeting, also known as remarketing, is an online advertising strategy that allows advertisers to serve ads to potential customers whove previously visited their website as they browse the web and Facebook. Retargeting is a powerful way to re-engage potential customers. It helps advertisers show relevant ads and promotions to those customers when they are ready to make a purchase. Marketers usually see a higher ROI from retargeting than from any other display advertising channel.
June 2013
What is Facebook Exchange (FBX)?

Launched last summer, Facebook Exchange is a new way to advertise to Facebooks one billion active users with data collected outside of the platform. Unlike other Facebook advertising offerings that are targeted based on a users profile information (age, relationship status, education, gender, etc.) or actions on Facebook, advertising on FBX is powered by intent data or, more simply put, how a visitor interacted with a certain website outside of Facebook. An advertiser can now retarget potential customers who previously browsed their site with Facebook ads. Additionally, FBX ads cannot be purchased through Facebook and must be purchased with a FBX Qualified Company. AdRoll is one of a select group of tech companies that has access to this premium inventory. FBX Ad Units Right Hand Side Launched on FBX: June 2012
FBX At-a-Glance Reach

1 billion active users (June 2012), 57% of whom are daily users.
Targeting
Your customer intent data
Access
Via FBX Qualified Partners
Formats
Right-hand side and News Feed on Desktop
Primary Objective
Direct response
Title: 25 character limit (including spaces)
Body: 90 character limit Image: 100x72 pixels
News Feed Page Post Link Ads Launched on FBX: May 2013
AdRoll
Youve been to our site and now youre seeing retargeting in action. Comment to let us know if youre excited about retargeting in the News Feed!
Post: 500 character limit (remainder truncated)
FBX News Feed Ads Beta!

ADROLL.COM
Title: 25 character limit Body: 90 character limit Image: 154x154 pixels (shown at 90x90 for some users)
Reach potential customers in the most prominent location on Facebook, the News Feed.
Like Comment Share
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Sponsored
Social Elements
June 2013
What are FBX News Feed Ads?

Facebooks News Feed is the reason that billions of users log in to the platform each monthits the first place people go and the place where they spend the most time. Introduced this May, Page Post Link Ads (PPLAs) are highly-visible and highly-engaging units that bring the power of FBX retargeting to the News Feed. Page Post Link Ads Unlike standard Page posts that can support various types of media: links, videos, photos, events, or even offers, FBX only currently supports Page Post Link Ads on desktop browsers. As the name implies, Page Post Link Ads link to an external site rather than another Facebook Pagean important distinction that makes these units optimal for direct response marketing. In addition to a 154x154 pixel image, these units have multiple fields for marketing copy and call-to-actions. Their large size and prominent placement make them nearly impossible to miss when inserted into the News Feed. FBX Page Post Visibility These News Feed ad units are served as unpublished posts, sometimes referred to as dark posts, and cannot be seen on a Facebook page. This allows advertisers to maintain their brand voice while testing and optimizing post creative, and prevents oversaturating an audience.
The right hand side ads in FBX have been great, but the News Feed is now proving to be our highest ROI retargeting channel.
Garrett Scott Sr. Marketing Manager
June 2013
What are FBX News Feed Ads?

contd
Insertions vs Impressions Unlike right-hand side Facebook ads which are bought on a cost-per-impression (CPM) or cost-per-click (CPC) basis, FBX News Feed ads are purchased on an insertion basis or by cost-per-insertion (CPI). Because a section in the News Feed can be viewed multiple times (as a user scrolls through content), one insertion often has multiple views. This means that even with just the paid distribution, advertisers are getting more impressions than they would with an ad purchased at a similar CPM. But, News Feed ads receive more than just paid distribution and can receive viral social impressions. Frequency and Scale Because of its prominent location, News Feed retargeting is currently limited by Facebook to only one insertion per user per day. Unlike its RHS counterpart that can serve at any frequency an advertiser specifies and can appear alongside other brands advertisements, FBX News Feed units stand alone for maximum effect. While its logical to limit frequency in the News Feed given its prominence, this restraint makes it necessary to complement News Feed campaigns with other inventory to maximize overall retargeting ROI.
June 2013
Social Elements of News Feed Ads

One of the key features of these ads, aside from their premium placement and response rate, is the social layer embedded in each ad. Unlike other ads, FBX News Feed ads have all the familiar Facebook social elements of page posts, allowing for unique dialogue between customer and advertiser and additional viral distribution as people like, share, and comment on an ad. CTR is always going to be a good indicator of an ads efficacy, but these social options bring a whole new measurement of success to performance-oriented campaigns. Comments, Likes, and Shares These social elements appear directly below the ad unit and are visible to the ads target audience with each insertion. Notifications of comments on the page post will show up on a brands Facebook page.
At Udemy, were always excited to experiment and test new channels that will help us better engage our community. Weve been testing Facebook News Feed via AdRoll these past two weeks and have seen amazing results. We plan to continue investing in this channel.
Gokce Cozen Marketing Manager
When AdRoll ran its first FBX News Feed ad, the ad received over 235 likes and 100 positive comments in its first week live. We were able to respond to the feedback and start a dialogue with our current and potential advertisers through the ad unitsomething not possible with other types of retargeting ads today.
June 2013
Social Elements of News Feed Ads

contd
Virality FBX News Feed ads garner views outside of their paid insertions due to the social layer on the unitin other words, free advertising to friends of those who previously interacted with the ads. Viral engagement can be viewed by clicking from the unpublished page posts permalink by hovering over the number of people whove seen the post.
For example, the paid distribution of our very first News Feed ad (shown below) was nicely bolstered by 1,867 views from connections of those who had liked, commented, or shared our ad.
AdRoll
Youve been to our site and now youre seeing retargeting in action. Comment to let us know if youre excited about retargeting in the News Feed!
FBX News Feed Ads Beta!

ADROLL.COM
Reach potential customers in the most prominent location on Facebook, the News Feed.
Like Comment Share
144
55
20
Sponsored
June 2013
Key Performance Metrics

To see how FBX News Feed ads performed, we looked at over 1 billion impressions from a set of 547 advertisers running retargeting campaigns across all 3 types of inventory: FBX right-hand side, FBX News Feed, and standard web retargeting serving on ad exchanges run by companies such as Google, OpenX and Pubmatic. The advertisers included in this analysis spanned all verticals, apparel, consumer electronics and travel among others, and budget sizes some spending over $20,000 per month and others as little as $200. Click-through rate (CTR) We found astoundingly high average click-through rates for FBX News Feed ads compared to other types of retargeting. The ad format, location and audience combine to create the engaging retargeting ads with the highest response rates weve ever seen.
21x CTR over web retargeting 49x CTR over FBX RHS
Cost-per-click (CPC) The high CTR contributed to a substantially lower CPC as compared to both FBX RHS and web retargeting.
-79% CPC compared to web -54% CPC compared to FBX RHS

This data confirms that clicks in the News Feed are generally cheaper than clicks on the RHS. This was also validated by News Feed ads run with standard Facebook ad targeting. Spruce Media recently reported in their Q1 2013 State of Facebook Advertising report that News Feed clicks were 30-50% cheaper than RHS clicks. Click-through conversion rate (CTC rate) Sometimes when marketing or advertising drives substantial traffic and has a high CTR, conversion rate suffers. While CTC rates were slightly lower for FBX News Feed ads compared to FBX RHS and web retargeting, the traffic quality was still strong and similar to the other inventory sources.
-9% CTC compared to web -16% CTC compared to FBX RHS
10
June 2013

contd
Click-only Cost-per-action (CPA) Given the more efficient CPC and comparably strong traffic quality, FBX News Feed ads are performing very extremely well when compared to other retargeting inventory sources on a click-only attribution model.
-77% CPA compared to web -45% CPA compared to FBX RHS

Blended Cost-per-action (CPA) Most retargeting advertisers use a more sophisticated attribution model than last click by giving at least partial credit to view-through conversions. Using a multi-touch attribution model that takes into account both clickthrough and a smaller percentage of view-through attributed conversions, FBX News Feed ad CPAs were still 63% lower than web and 6% lower than FBX RHS.
-63% Blended CPA compared to web -6% Blended CPA compared to FBX RHS
This means that when we include view-through conversions into the attribution mix, web and FBX RHS performance improves. This is likely due to the access to audience that these inventory sources provide. FBX RHS ads are included multiple times per page on almost every FB page view and the rest of the web provides even greater audience reach. This analysis weighted view-through conversions the same across inventory sources, but because of the premium placement of the News Feed, it can be easily argued that News Feed ad views have a much bigger influence on conversions as compared to less prominent ad units. RHS are not positioned in the content area on FB and web banner ads suffer from visibility limitations because they are not always guaranteed to be above the fold. Its likely that FBX News Feed ads should be given more view through credit than RHS or web. So, despite only outperforming RHS by 6%, the actual performance difference may be much greater.
11
June 2013

contd
Post-launch Performance One of the biggest reasons to run retargeting both on the web and FBX is that the inventory sources reach different audiences. Because FBX News Feed is essentially the same audience as FBX RHS, we wondered whether the campaigns were driving incremental traffic. To help answer this question, we compiled data from a set 258 advertisers as they launched retargeting campaigns in the News Feed. We found that in the first 7 days after advertisers launched, News Feed ads helped raise total clicks from FBX advertising by 62%, helping to prove that News Feed campaigns drive incremental visits and conversions. Additionally, in these 7 days the average CPC on FBX for these advertisers decreased by 30%. More traffic and conversions at a more efficient spend. What more could a direct response advertiser ask for?
FBX Ad Clicks
FBX RHS FBX NF CPC
+62% Total Clicks
CLICKS
-7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7
DAYS FROM NEWS FEED LAUNCH
12
Facebook Exchange News Feed by the Numbers The Ultimate Performance Marketing Report for Retargeting in the Center of the Social Web Impressions / Insertions
AdRoll Inventory Analysis

106.056 deg web 252.216 deg rhr 1.76 deg nf
% Web RHR % NF % January 35.39% 64.61% February 39.71% 60.29% March 36.11% 63.89% April 32.76% 67.24% May 30.80% 69.13% 0.07% June 29.46% 70.06% 0.48%
June 2013
Clicks Adoption of FBX News Feed ads among AdRoll advertisers has been rapid. % Web RHR percentage NF % Just 6 weeks ago, we started rolling out FBX News Feed ads to select AdRoll January 56.41% 43.59% advertisers and weeks later opened the55.23% ad unit to all AdRoll February 44.77%existing customMarch 51.12% 48.88% ers. Today, any advertiser can sign up and launch a FBX News Feed campaign. April 48.89% 51.11% May 45.60% 51.45% In this short amount of time, FBX News Feed ads are already2.95% a substantial June 38.00% 47.35% 14.65% essions / Insertions portion of advertisers retargeting. Despite the fact that News Feed ads are % Web RHR % NF % less than .5% of the total ads served, clicks from these ad units now account ary 35.39% 64.61% for 15% of60.29% all retargeting clicks that occur in AdRoll campaigns. uary 39.71% h 36.11% 63.89% 32.76% 67.24% 30.80% 69.13% 0.07% Impressions 29.46% 70.06% 0.48% Impressions 106.056 deg web 252.216 deg rhr s 1.76 deg nf % Web RHR percentage NF %
FBX News Feed 15% of our clicks 136.8 deg web from 170.46 deg rhr 0.5% of our 52.74 deg nf impressions
*As of June 2013
Clicks
ary 56.41% 43.59% uary 55.23% 44.77% h 51.12% 48.88% FBX 48.89% 51.11% 45.60% 51.45% 2.95% 38.00% 47.35% 14.65%
WEB
70.1%
RHS
29.5%
136.8 deg web 170.46 deg rhr 52.74 deg nf
FBX NF
0.5%
Impressions
Clicks Clicks
WEB
Not to scale
38%
47.4%
FBX NF
FBX RHS
14.7%
972 Mission Street, 3rd Floor San Francisco, CA 94103 1.877.7AdRoll press@adroll.com www.AdRoll.com 13
o scale
June 2013
Additional Resources
AdRoll Resources Retargeting on Facebook Exchange AdRoll.com Retargeting with Social Ads Has Arrived AdRoll Blog Ready for DIY FBX News Feed Ads? AdRoll Blog Rollin Out Retargeting in Facebooks News Feed AdRoll Blog Leveraging Behemoths: Standard Web Retargeting vs Facebook Exchange AdRoll Blog Retargeting in the News Feed AdRoll Support Center External Resources Facebook Exchange Qualified Companies Facebook PMD Center FBX Now Both In Desktop News Feed and Right Hand Side Facebook Studio Blog Q1 2013 Report: The State of Facebook Advertising Spruce Media Facebooks Q1 2013 Earnings Call Transcript Seeking Alpha
About the Authors

Adam Berke
President, AdRoll In his role as President, Adam oversees the companys Business Development and Marketing teams, working directly with many AdRoll customers.
Jonathan Lau
Content and Marketing Manager, AdRoll Jonathan possesses a rich understanding of the online advertising ecosystem, consultative selling, and customer service. At AdRoll, he manages content strategy and production, as well as social media.
Tom Pitts
Marketing Analytics Manager, AdRoll Tom runs online marketing and analytics for AdRoll. Previously, he led web and mobile analytics for Sephora.com, helping to integrate their cross-channel marketing and analytics capabilities.
14

FBX by The Numbers June 2013

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Facebook Exchange News Feed by the Numbers

The #1 Retargeting Platform

Social Elements of News Feed Ads 8 Comments, Likes, Shares Virality

AdRoll Inventory Analysis 13 Additional Resources 14 About the Authors 14

What is Facebook Exchange (FBX)?

FBX At-a-Glance Reach

Title: 25 character limit (including spaces)

Body: 90 character limit Image: 100x72 pixels

Post: 500 character limit (remainder truncated)

FBX News Feed Ads Beta!

Like Comment Share

What are FBX News Feed Ads?

What are FBX News Feed Ads?

Social Elements of News Feed Ads

Social Elements of News Feed Ads

FBX News Feed Ads Beta!

Like Comment Share

Key Performance Metrics

-79% CPC compared to web -54% CPC compared to FBX RHS

-9% CTC compared to web -16% CTC compared to FBX RHS

Key Performance Metrics

-77% CPA compared to web -45% CPA compared to FBX RHS

Key Performance Metrics

+62% Total Clicks

AdRoll Inventory Analysis

About the Authors

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