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Bill Gray on Facebook’s New Ad Platform

October 10, 2012

Bill Gray spent decades in the advertising industry and rose to become Co-Chief Executive Officer of Ogilvy Group North America. At Ogilvy, Bill Gray handled advertising, publicity, and marketing accounts for large technology firms such as IBM and Cisco, and for financial firms such as American Express and TD Ameritrade.

Facebook has released more details about its new Facebook Exchange (FBX) advertising platform, and has allowed some of the platform’s alpha testers to speak to the media about their experiences. FBX will allow advertisers to bid for ad slots in real time, based on a given user’s browsing history. For example, if a Facebook user has been looking at an online clothing site, the ads he sees will be related to clothing.

On the surface, FBX isn’t that different from the ad exchanges currently offered by companies like Google and Yahoo. However, the agencies who have tried the exchange claim that their returns on investment (ROIs) and conversion rates are considerably higher than the ones they get from Google. It’s unclear if the increase is a result of how people use Facebook. Perhaps Facebook users have been trained to pay attention to sidebar prompts, and so are more likely to respond to the targeted ads. On the other hand, the better ROI could be a function of the small scope of the trial. As more advertisers take advantage of FBX and users grow accustomed to seeing the same ads repeatedly, they may be less likely to respond at the same rate.

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