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Facebook Abandons Demand-side Platform Plans

Tim Maytom

facebook-fbx-ad-exchange.jpgFacebook has decided to drop plans to create its own demand-side platform that would be integrated into its ad server and measurement platform Atlas, largely driven by the number of bots and bad quality ads it would have to deal with.

The social network began testing the use of a buying platform within Atlas last year, with a small number of marketers given the ability to use Facebook's 'people-based' targeting capabilities to programmatically bid on advertising on third-party sites and apps.

However, the company announced yesterday that the test didn't deliver enough value for advertisers because the quality of open web ads available through advertising exchanges was too low, often delivering ads to bots rather than humans.

"Through Atlas and the people-based layer that powers it, we've been able to identify and measure where most waste comes from: exchanges and banners," said Dave Jakubowski, head of ad tech at Facebook. "We were able to deliver ads to real people with unprecedented accuracy, but came up against many bad ads and fraud. While we were fortunately able to root out the bad actors and only buy quality ads, we were amazed by the volume of valueless inventory."

According to Facebook, only native ads and video content was able to deliver consistently good results, and after removing over 75 per cent of the volume coming from publishers circulating bad inventory into LiveRail, the company felt that there wasn't enough inventory remaining to make a DSP worthwhile.

"We knew that in good conscience, we couldn't sell what Atlas and our people-based measurement told us was valueless," said Jakubowski. "This eye-opening experiment left us with a decision: Do we bury quality (which is industry-prevalent), or do we focus solely on building a product in our mission to help marketers deliver and measure true business value? We chose the latter. Value is the better and longer-term view."

Despite abandoning the plans for a DSP, Facebook is still making changes to Atlas, introducing new tools aimed at tying offline sales to online ad spend and tracking the path to conversion across multiple devices. The service is also introducing a new video ad serving solution which will make it easier to deliver cross-device video campaigns.

While it's possible to view this news as a warning to the advertising industry about the levels of fraud prevalent in the wider ecosystem (and indeed many industry experts have warned that the ad tech bubble may be approaching bursting due to, among other things, the growing threat of fraud), it could also be Facebook taking the opportunity to blow their own trumpet about the relative safety of their own contained ecosystem that makes fraud harder to carry out (although far from impossible). The truth, in all likelihood, is probably somewhere between those two.