FEBRUARY 2014

Insider’s Guide to

Retargeting
with Facebook
Exchange

Strategies, Case Studies, and Best Practices
to Maximize Your FBX Campaigns

PREDICTIVE LIFETIME VALUE™
FOR PERFORMANCE MARKETING AT SCALE


INSIDER’S GUIDE TO RETARGETING WITH FACEBOOK EXCHANGE

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INTRODUCTION
Retargeting has become a must-have component of
any performance marketing campaign as marketers
have discovered the extraordinary value of reaching
the 98% of consumers who didn’t convert on their
first visit to a website. Brands across the majority
of verticals have achieved exceptional results by
leveraging behavioral data from their websites for ad
targeting.
Concurrently, Facebook emerged as a powerful
advertising channel boasting more than 1 billion
users globally. Facebook won over advertisers with its

innovative targeting capabilities and native ad units that perform exceptionally well
because of their centralized location, ability to scale and high engagement rates.
To capitalize on its massive inventory, Facebook introduced Facebook Exchange
(FBX) in June 2012. FBX lets advertisers purchase Facebook ad inventory that
retargets users based on their browsing behavior or intent shown on websites.
Since then, FBX has grown to represent a significant portion of retargeting
ad spend—it now accounts for about half of retargeted clicks on the web.
Numerous studies have shown that FBX delivers an astounding return on
investment (ROI). On average, we’ve seen FBX campaigns achieve an ROI (return on
ad spend investment) of 546%.
However, there is some confusion about how advertisers can make the most of
FBX to meet their ROI objectives at scale. In this latest eBook we explore:
 Details on how FBX works
 Strategies and approaches for your
FBX Campaigns
 Case studies on FBX performance

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 A comparison of FBX to other
exchanges
 Best practices for maximizing your
FBX campaigns


INSIDER’S GUIDE TO RETARGETING WITH FACEBOOK EXCHANGE

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HOW FBX WORKS

Real time bidding (RTB) helps media buyers find audiences at scale with automated
or programmatic buying that allows advertisers to bid on each ad impression as it
is served. Facebook entered the RTB market with Facebook Exchange.
FBX gathers data data from people’s interactions on external websites. Advertisers
can then retarget Facebook ads to potential customers who previously browsed
their site. Consumer behavior with FBX often works as follows:
1



Customer visits a
product page for a
specific brand

2



Customer sees a product
ad retargeted uniquely to
them on Facebook

3



Customer clicks on ad
and purchases a product
after seeing FBX ad


A consumer visits a product page on a brand’s website and a cookie is set on their
browser. A request is sent to the Facebook servers to notify the DSP of when the
user is on Facebook. Next, Facebook notifies the DSP of the users presence, with
what is commonly called a bid request. The DSP responds to Facebook with a bid
and an ad creative, within 100ms of the initial request. Facebook holds an auction
and if the ad wins the consumer sees a product ad retargeted uniquely to them on
Facebook. The user clicks on the ad and purchases a product after seeing the FBX ad.

Real-Time Marketing
FBX powers time-sensitive advertising because ads are bid on and delivered to
users in real time as people browse Facebook. This allows marketers to drive
performance by targeting a user who for example, has recently browsed a hotel
room on an online travel agency website with personalized ads immediately when
they open their Facebook page. FBX is ideal for displaying the right product at
the right time to the right user, increasing not only clicks, but more importantly
consumer purchases.

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INSIDER’S GUIDE TO RETARGETING WITH FACEBOOK EXCHANGE

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FBX Ad Formats
Advertisers have multiple options for FBX ad placement which include:

News Feed
Unpublished Page Post Link Ads
Creative can be dynamic or

static.

Right Hand Side
Domain Ads on the
right hand side (RHS)
Creative can be
dynamic or static.

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INSIDER’S GUIDE TO RETARGETING WITH FACEBOOK EXCHANGE

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HOW TO GET THE MOST OUT OF
YOUR FBX CAMPAIGN
When using FBX, it’s important to consider the following strategies to yield
maximized return:
 Leverage dynamic creative for better ad relevancy
 Use FBX in combination with native Ads API ads
 Target specific audience pools using rules-based logic
 Create your retargeting groups around the goal you are trying to achieve

Dynamic Creative
By leveraging dynamic creative, advertisers have the option to dynamically
display creative at an individual SKU, or product, level. With intent already shown,
dynamic creative promises to provide greater relevancy for consumers and better
performance for advertisers.
Nanigans’ FBX solution supports dynamic

SKU based creative for both domain ads
on the right hand rail, Page post link ads
and unpublished Page posts in News
Feed.
With support for hundreds or thousands
of creative versions, advertisers can
make frequent changes to an ad,
target a specific creative message to a
select audience and optimize the best
performing creative elements.

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INSIDER’S GUIDE TO RETARGETING WITH FACEBOOK EXCHANGE

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 Case Study
A Nanigans study highlighted the importance of leveraging dynamic creative
through FBX:
FBX Dynamic creative resulted in a 5.1.X higher ROI (return in sales revenue on the
cost of ad spend) than evergreen creative

Evergreen FBX Creative

5.1X




Dynamic FBX Creative

Compared to more evergreen creative delivered through FBX, dynamic creative
resulted in:

7X

68%

higher CTRs

higher day-1 purchase rates

43%

66%

lower CPCs

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lower CPA for new customers who
purchased on the same day they viewed ads


INSIDER’S GUIDE TO RETARGETING WITH FACEBOOK EXCHANGE

Product Feeds
A product feed is a file that includes a
company’s full product list and all information

tied to each individual product, such as the
price, an image, and a description. This allows
the contextual creation of ads based on the
copy or image associated with a particular
product.

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To set up a product
feed, you’ll need a
feed (.csv, .txt, or .tsv)
that includes:
 Product SKU
 Product Category
 Image URL
 Product URL
 Product Title (optional)

Product feeds make it easy to remarket
 Product Description (optional)
and dynamically display product ads at the
individual SKU level, providing increased ad
relevancy for targeted consumers. A best
practice is to update your product feeds based on the rate of product changes on
your website.

Image dynamically
rotates depending
on product or
product category.


Ad headline changes
depending on
product or product
category featured.

Ad body/message
rotates depending
on product feed.

When setting up dynamic creative, make sure to keep creative image sizes in mind.
For example, when using unpublished Page post link ads in News Feed, the creative
image should be in a 1.9:1 ratio (1200x627) pixels.

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INSIDER’S GUIDE TO RETARGETING WITH FACEBOOK EXCHANGE

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Benefit from “The Assist”
For advertisers seeking to achieve ROI objectives at scale, it’s essential to use
FBX in conjunction with prospecting and Custom Audience targeting through the
native Facebook Ads API. Complementary advertising channels, a mix of FBX and
Facebook Ads API lets you maximize reach and achieve a strong return on your ad
spend.
The Facebook Ads API provides access to Facebook’s rich targeting data
(demographics, connections, interests, and more), while FBX allows marketers
to bring their own fist party data to Facebook. Facebook API ads are effective for

driving users to landing pages who can then be retargeted with FBX ads. This will
help you grow the pool of people in your remarking groups.
While DSPs typically only have
access to FBX, Nanigans is one of
three Facebook Strategic PMD’s
with access to both the native
Ads API and FBX. Advertisers
choosing a to run a combination
of the two benefit from “the
assist”—by leveraging the Ads
API to discover audiences and
generate demand, and FBX to close
individual customers.

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Standard
Facebook Ads

Demand
Generation

Demand
Fulfillment

FBX Ads


INSIDER’S GUIDE TO RETARGETING WITH FACEBOOK EXCHANGE


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 Case Study
Facebook Ads API and FBX Boost eCommerce
Sales by 89%
In a study of $1.2M in ecommerce sales, Nanigans found that customers
who entered FBX remarketing pools after first viewing a standard Facebook ad
purchased 89% more in sales revenue than those who entered FBX remarketing
pools from other channels, such as organically or through search.
The study also found that coupling FBX buys with prospecting through the native
Facebook Ads API drove 39% additional customers into FBX remarketing pools.
The results underscore that without using native Facebook audience targeting with
the Ads API, the retailer would have seen a smaller pool of potential customers to
retarget. Filling the remarketing funnel with high quality candidates is critical for a
successful FBX campaign.

Revenue per Purchasing Customer

In addition, customers acquired
through native Facebook audience
targeting were much better
qualified than those acquired
through other channels. This
can be attributed to the deep
targeting capabilities and social
context of Facebook’s native
ad types, available through the
Facebook Ads API.

Customers Entering FBX Remarketing Pools from Ads API

Buys Purchase 89% More in Sales Revenue

$354.11
$187.70

Facebook Ads API

Non-Facebook Channels

Origin of Customer in FBX Remarketing Pool

Based on the results, it’s clear that
if an advertiser is not leveraging Facebook Ads API buys alongside FBX retargeting,
they are not only missing out on new customers, but they are missing out on their
highest quality customers and significant incremental revenue.

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INSIDER’S GUIDE TO RETARGETING WITH FACEBOOK EXCHANGE

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Target Specific Audiences Using Rules Based Logic
Marketers have achieved FBX targeting success with highly targeted user segments
by defining a set of behavior rules to create and automatically update retargeting
groups. Some examples include:

eCommerce



Gaming


Travel








People who have added an item to their cart but didn’t purchase
People who viewed a product but didn’t purchase
People who have visited the website but didn’t purchase
People who have registered or logged in but didn’t purchase

 People who have made a purchase but not in the last 3 or 7 days
 People who have fired a DAU pixel but not in the last 3 or 7 days

 People who searched for a flight but didn’t purchase within a specific
time period (e.g. 3, 7, or 14 days)
 People who searched for a hotel but didn’t purchase within a specific
time period (e.g. 3, 7, or 14 days)

A best practice is to use inclusion or exclusion rules on a combination of events
that occur within a designated timeframe to design targeted messages for greater
ad relevance and performance.


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INSIDER’S GUIDE TO RETARGETING WITH FACEBOOK EXCHANGE

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FBX in News Feed
Initially FBX ads were only delivered in the right
hand side, and while, advertisers were already
seeing great performance compared to other
exchanges, Facebook’s News Feed inventory
brought FBX to a whole new level.
Located prominently in the center of the
News Feed, FBX Page post link ads are highly
visible and engaging. The News Feed is the
place people go when they come to Facebook
and where they spend the majority of their
time. Plus these ad units have all of the
Facebook social elements—Likes, shares, and
comments—for additional viral distribution.

 Case Study
Facebook Exchange News Feed Increases
ROI 197%
FBX Page post link ads in News Feed
delivered an average 17.1 times
higher CTRs and 51 percent lower
CPCs versus the RHS.
ROI was 197% higher as a result.


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ROI RHS,
Domain Ads

ROI News Feed,
Page Post Link Ads


INSIDER’S GUIDE TO RETARGETING WITH FACEBOOK EXCHANGE

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FBX vs. Other Exchanges
Through exchanges, advertisers can find specific audiences across the web and
retarget specifically to behavior patterns and purchase activity. Advertisers can
bid in real time for these users, meaning that inventory can be sold to the most
qualified bidder via an auction-based bidding model. Yahoo, Google, Microsoft, and
other major players on the web all have exchanges, but with one in five U.S. page
views being on Facebook, the social network is the heavyweight in the crowd.

CPA

+

Benefits of FBX compared to
other exchanges
 Lower costs-per-acquisition and ads that


appear above the fold and on brand-safe
pages

 With News Feed inventory, FBX ads are

in the large Page post link format and
get prime real estate among posts from
people’s friends and pages

 FBX ads include options for Likes,

comments, and shares, which can lead to
other types of engagement

FBX
+
API

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 A combination of FBX and Ads API can fill

your remarketing groups with high value
prospects—a critical element for any
successful FBX campaign


INSIDER’S GUIDE TO RETARGETING WITH FACEBOOK EXCHANGE

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FBX BEST PRACTICES
Since FBX went live, Nanigans has worked with hundreds of the world’s largest
ecommerce, gaming, and travel companies to help them remarket on Facebook.
We’ve found that there are a variety of factors that help advertisers boost
conversions and have created a list of some best practices to help you get the most
out of FBX.

Tips for Compelling
FBX Creative
 Keep creative for non-dynamic creative

gender neutral so it is appealing to a wider
audience

 Differentiate your FBX ads from your API Ads
to avoid serving the same ads over and over
to the same people

 If you are not using dynamic creative, push
new creative often to keep ads fresh

 Customize your creative to specific

categories and subcategories and analyze
performance across the entire category to
optimize results

 Test, test, and test some more—changing


colors, images, and CTAs can make the
difference between a low CTR and a high one

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Tips for Increasing Volume with FBX
FBX remarketing segments are limited by the number of people who visit your
website so volume can be more challenging with FBX as compared to acquisition
campaigns with the Facebook Ads API. Here are some best practices for reaching a
bigger audience on Facebook.
 Increase your bids to reach a
broader audience
 Utilize Facebook API ads to
fill your remarketing pool by
bringing more traffic to your
website
 Create more retargeting groups
based on user behaviors to
increase the amount of people in
your remarketing pools
 Push more dynamic creative ads
to new categories to increase
relevancy
 Adjust your frequency limits
to increase the amount of

impressions a user sees in a
given time period

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

What to Expect After You’ve Launched Your
First Campaign

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

Higher CTRs for dynamic creative
ads—Dynamic creative is more
personalized which improves CTRs
and ultimately, ROI



Higher CTRs for Page post link ads
in News Feed—News Feed ads are
more engaging with large native
ad formats and a more centralized

location than the RHS



Higher purchase rates with
dynamic creative in comparison
to static FBX—Dynamic creative is
more engaging and more relevant
in comparison to static creative



Lower volume for FBX ads in
comparison to regular API Ads—
This is because the audiences
targeted only includes people who
have visited your website



Lower volume on News Feed ads
in comparison to RHS ads—News
Feed ads have a limited number of
impressions per user per day



Lower volume for dynamic creative
rather than static creative—Static
ad creative is not limited by SKU

matching


INSIDER’S GUIDE TO RETARGETING WITH FACEBOOK EXCHANGE

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CONCLUSION
With only 2% of web traffic converting on the first visit, ad retargeting will only
continue to grow in importance during 2014. Retargeting not only helps to remind
consumers of the product they may have recently viewed, but it takes the next step
to reengage them for specific purchase events.
Facebook Exchange has driven significant impression volumes since launch. With
20 billion user minutes spent on Facebook per day, the ability to serve dynamic ads
based on known user preferences will be a key contributor to driving conversions.
As Facebook continues to see strong demand for FBX ads in both the desktop
News Feed and RHS, some, such as a J.P. Morgan analyst, suspect they will look to
capitalize on their mobile momentum and roll out retargeting to mobile later this year.

“We believe FBX will become an increasingly important part of
Facebook’s ad platform as retargeted ads move further into the
Desktop and Mobile News Feeds.”
Doug Anmuth, J.P. Morgan Internet Analyst

Today, just as you wouldn’t run advertising campaigns on desktop without buying
on Facebook, you certainly shouldn’t be retargeting consumers without FBX.
Facebook’s extensive reach combined with its high quality ad inventory provide
exceptional results for advertisers. When planning your campaign, be sure to
leverage the Facebook Ads API to discover and FBX to close individual customers to
maximize the return on your retargeting campaign.


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INSIDER’S GUIDE TO RETARGETING WITH FACEBOOK EXCHANGE

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ADDITIONAL RESOURCES
Articles
 Why Advertisers are Flocking to Facebook Exchange 
 Facebook Exchange: 10 Steps to Boosting Conversions 
 Facebook Exchange: Driving FBX Results with Dynamic Creative 
 Introducing Dynamic Creative in the Facebook News Feed 

Case Studies
 Dynamic Creative Increases ROI of Facebook Exchange by 5X 
 News Feed Increases ROI of Facebook Exchange by 197% 
 Why Advertisers Can’t Leverage FBX without Native Facebook Ads API
Buys 

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12TH FLOOR
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857-227-0364


Nanigans offers the only SaaS platform that optimizes to Predictive Lifetime Value™. Our
technology empowers over 250 performance marketers to find, acquire and retarget their most
profitable customers at scale across social and mobile. With over $350 million running through
our platform annualized, Nanigans provides in-house marketers a significant cost savings due
a publisher-direct relationship model. Backed by Avalon Ventures with over 140 employees,
Nanigans has offices in Boston, New York, San Francisco, London, Sydney, and Singapore.