We’ve written about the rising cost of Facebook ads and what that could mean for the run-of-the-mill Google publisher. But why are Facebook Exchange ad prices increasing? Is it just because of the increased volume DoubleClick’s publishers are bringing? Or was this happening before people started using Google’s tools to buy Facebook ads?
These ads were increasing in cost well before Google joined the party.
According to a report from Turn (a demand-side platform), Facebook Exchange (FBX) prices were shooting up before Google’s DoubleClick Bid Manager became an option for buying Facebook Exchange ads, with an eCPM that’s up at least 87% to date. The eCPM of all Facebook Ads in the 3rd quarter was $0.45, but the eCPM of over 20% of the impressions was $.10.
While this isn’t a Google-Facebook partnership per-se, the ability of Google’s customers to buy Facebook ads is ostensibly all about benefiting mutual clients, so it’s a win-win situation for both companies. Facebook wins in that it presents an opportunity to boost competition and increase revenue, whereas Google wins in that it makes its DoubleClick property more valuable. A new source of inventory will be available on DoubleClick for Publishers, and more advertisers will content for Facebook ad inventory.
Both companies win.
Why Google got involved
FBX and AdX ads are both centered on demand generation; in other words, they both intend to get people to purchase something — or even to think about purchasing something. By letting advertisers buy cookie-based retargeted ads on Facebook’s site, FBX ads are directly competing with Google’s bread-and-butter: search ads. Facebook gets most of this money, not Google.
But Google had to get involved; they had no real choice.
Advertisers were going to go somewhere to buy these ads. Facebook ads are just too important for Google to cede grounds to competitors. So buy allowing DoubleClick clients to buy retargeted ads on FBX, DoubleClick will become a one-stop-shop for buying ads across the web.
In response to this new partnership, Google said, “Partnership has been key to Google’s success as a rising tide lifts all boats. So we’re excited to announce a new way to help our clients succeed by working with Facebook to participate in FBX, their real-time bidding exchange…We’re always looking at ways to serve our clients even better. Starting in a few months, clients will be able to buy inventory on FBX via DoubleClick Bid Manager.” Mark Zuckerberg was less optimistic about the blossoming relationship. He said, “I would love to work with Google”.
The more Google and Facebook partner, though, the more Google’s publishers will make money running Google’s ads. As overall ad volume and eCPMs increase, revenues will increase across the board.