News

POV: Facebook Launches In-App Header Bidding

Background:

Facebook has announced the launch of in-app header bidding via its Audience Network, enabling and supporting App publishers to include Facebook Audience Network inventory within mobile bidding auctions.

Details and Implications:

Facebook has recently partnered with Fyber, MAX and Twitter’s MoPub to support mobile-web header bidding, so that publishers who manage programmatic in-house or through unique partners can now include Audience Network inventory in their auctions.

The new in-app ad bidding is a way for sites to auction off their App ad space in real time across ad networks. This increases competition for in-App ad space by tapping into sources like Facebook Audience Network. Facebook Audience Network launched in 2014 so publishers could use Facebook’s platform directly to sell their ad inventory.

The in-app model is “a bidding system that enables publishers to conduct real-time auctions between ad sources," Alvin Bowles, VP of Facebook Audience Network says. "The ad network that's willing to pay the most amount of money wins”. In-app bidding allows offers from a variety of ad networks in real time, as opposed to a cascaded-tier system prioritising bidders based on historical CPMs. Publishers with in-house server technology like Rovio, Talefun and GameInsight have been testing Facebook’s in-app bidding and have been reporting up to a 20 percent lift in ad revenue during testing.

In-app advertising accounts for 80 percent of mobile ad spending, which amounted to $45.3bn in the US last year, according to eMarketer.

Separately, Facebook has made changes to its on-platform offering with a new Marketplace ad offering. The digital giant has started to test Marketplace ads as an additional ad offering for sellers. Marketplace ads will now allow sellers to pay to boost their listing to more people via the News Feed.

Furthermore, businesses using Marketplace will be able to place product ads in Marketplace to reach people where they shop. In coming weeks, all advertisers in the US, Canada, Australia and New Zealand (for the time being) will be able to run ads within Marketplace using the traffic, conversions, product catalog, video views, reach objectives and will be automatically optimised for clicks, targeting demographics who click similarly. Once the product is sold, the ad campaign will stop.

“Advertising across our platforms enables you to reach your target audience wherever they’re spending time, giving you more opportunities to connect with people likely to be interested in your offerings,” Facebook said in its announcement. “Businesses are already seeing results using ads in Marketplace."

Summary:

These could be two very significant changes for Facebook. The in-App header bidding will drive revenue based on a model widely seen in other parts of the industry. The Marketplace change will open up a new revenue stream for Facebook in a model more like Craigslist. It will be interesting to see how both offerings develop and are taken up.

Further Reading:

Marketing Land / Facebook Blog / MarTech / Forbes / eMarketer