Facebook Marketplace vs. Exchange Ads: 3 Important Differences

facebook-ads-cartoonA lot of people talk about Facebook ads as though they’re all the same. They shouldn’t.

Facebook now offers two categories of ads: Marketplace ads (Like Ads, Sponsored Stories, etc.) and Facebook Exchange ads (FBX). And while both categories of ads may appear very similar to the typical Facebook user, behind the scenes, the resemblance disappears.

Here are the three most important differences between Marketplace and FBX ads.

1. A Different Approach to Buying

Buying Facebook Marketplace ads is fairly straightforward, whether you’re a marketer or a just an ordinary user with something to promote.

Marketplace ads are generally purchased on a cost-per-click (CPC) basis. Advertises simply choose whom to target and how much they’re prepared to spend.

FBX, by contrast, isn’t available to just anyone. Facebook has partnered with a limited number of Demand-Side Providers (DSPs), and if you want a piece of the action, you need to connect with one of those vendors.

Once you’re working with a Facebook-approved DSP, FBX works much like a traditional ad exchange. In other words, ads are purchased in a dynamic CPM (dCPM) auction with real-time bidding.

2. A Different Approach to Data

When people learn about FBX for the first time, they’re often surprised to discover that Facebook doesn’t offer up any of its data. After all, traditional Facebook Marketplace ads are built entirely around Facebook’s massive trove of data, which allows advertisers to target users according to a wide range of attributes, from their locations to the schools they’ve attended.

With FBX you get none of this data. You’ve got to target according to the data that you or your vendor brings to the table, that is, you’ve got to target with the data you’ve gathered on a user’s online behavior with cookies.

The good news for FBX advertisers: the platform allows you to do most of the same types of targeting as a traditional ad exchange. Still, on occasion, you do need to get creative.

FBX, for example, doesn’t have a built-in geo-targeting option. To get around this limitation, DSPs can turn to their own data to leverage an individual’s last known geo-location.

3. A Different Type of Intent

If you had to narrow the difference between FBX and Marketplace ads down to a single factor, it would have to be the difference in the type of intent that sits behind them.

Marketplace ads are powered by “social intent data,” which is a way of determining what people want to buy by looking at all the information they share with Facebook – from profile information, to the TV shows and brands they like. This is incredible data for targeting, and Facebook’s access to all of this data is what has turned it into such an extraordinarily valuable company.

FBX, however, doesn’t rely on social intent data, but rather on “transaction intent data” and “search intent data.” Transaction intent data is comprised of all the information people reveal when they interact with other sites across the web, from the time they spend on a page to the items they put in shopping carts. Search intent data, as Google can attest, is the holy grail of intent data because nothing reveals more about what people want than the terms they enter into search engines.

Once you understand these different types of intent, you can immediately understand why Facebook had to launch FBX. Simply put, FBX offers an even more powerful way to target. With “social intent data” Facebook can only target users with information they share very consciously.

With FBX, which can be powered by both on-site behavior and a user’s search history, Facebook can target users based on their online behavior when they’re not thinking about how they’ll be perceived by their friends. Put another way, FBX gives Facebook the power to target not by what people say about themselves, but about what they do.

And that makes all the difference in the world.

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