Why did Facebook abandon its DSP bidding product?

Facebook unexpectedly decided to remove this key project. Atlas advertising technology director Dave Jakubowski wrote on the Atlas official blog that the company will no longer develop comprehensive cross-platform DSP bidding products, but will instead focus more on the more promising native, video, and mobile.

Facebook has been competing with Google in digital advertising. Before launching its own DSP product, Facebook already had Ad sever "Atlas", SSP platform "LiveRail" and Ad network "Audience Network".

In the eyes of bystanders, Facebook's launch of its own DSP has reached the final step. Combined with its strong crowd targeting capabilities and experience, Facebook has every opportunity to challenge Google's DoubleClick Bid Manager.

In the fall of 2014, Facebook re-launched the Atlas platform and began to rebuild its programmatic trading products.

Last October, Atlas' DSP project team began to try to provide DSP bidding products to large agencies for trial, buying advertising displays from trading markets outside Facebook. Companies including Omnicom Group, Havas, Merkle, etc. participated in this test.

After half a year of use, it is finally time to announce the results.

Facebook unexpectedly decided to remove this key project. Atlas advertising technology director Dave Jakubowski wrote on the Atlas official blog that the company will no longer develop comprehensive cross-platform DSP bidding products, but will instead focus more on the more promising native, video, and mobile.

People who analyzed Facebook DSP were dumbfounded. Why has Facebook, which has been engaged in digital advertising for many years, failed this time?

Dave explains why in his blog post, beginning with a quote from the advertising industry:

“I know that half the money I spend on advertising is wasted, but the problem is I don’t know which half.”

Although it has been 20 years since this sentence was born, digital advertising today still faces the same problem. The Atlas team tried and identified what they saw as the biggest sources of digital advertising waste: fake traffic and ineffective formats mainly based on banners.

In the article, Dave introduced the testing experience of the past six months: When Atlas was testing the bidding system, it connected to several trading markets and bought traffic from them in various advertising forms, and finally came to two major findings.

1. Facebook’s DSP product encountered an alarming amount of low-quality ads and fake robot traffic. Even though they did their screening, they were still shocked by the scale of worthless traffic.

2. Through investigating advertising formats, they found that the only advertising formats that have real display value are: native and video.

To further verify their conclusions, the Atlas team connected DSP to its own SSP, LiveRail, and the results were surprisingly consistent. Even in its own trading market, nearly 75% of the traffic is of poor quality. So on the one hand, they were busy shutting down the entrance of low-quality traffic into LiveRail; on the other hand, Facebook was also faced with a dilemma. The team believed that if the bidding system told them that these ads were worthless, from the perspective of complying with the spirit of the contract, they should not sell these ads.

What made the Atlas team even more frustrated was that they found that the fake traffic they had abandoned had gone around in circles and appeared in other advertising trading markets, and was eventually bought back by other DSPs.

So the question is, should we buy and sell low-quality traffic as is common in the industry, or should we prioritize quality and provide advertisers with advertisements that are truly commercially valuable?

Facebook chose the latter, believing that advertising quality is the key and the future .

Following this line of thought, Facebook has a new direction after abandoning its comprehensive DSP product. The original blog post mentioned: This decision helped the Facebook team to find more carefully "where the real business value lies." Native advertising, video advertising and mobile devices have become the future in Facebook's eyes.

Source: eMarketer, 2015

It can be seen from the table that the proportion of mobile advertising is increasing year by year. Dave believes that many companies are still using the old ideas and tools from the PC era to manage their advertising campaigns, and those outdated technologies cannot adapt well to the current actual environment of cross-screen marketing , resulting in the continuous waste of advertising budgets. Atlas can provide valuable services to advertisers in these areas.

So when Facebook chose to stop the PC DSP project, it launched three tools in the new development direction to help advertisers adapt to the new marketing environment.

1: Offline Actions

Atlas' team believes that, at present, the vast majority of shopping still takes place offline (this may be due to the developed retail industry in the United States). If advertisers don't understand how digital advertising promotes offline sales, then they naturally won't be able to truly appreciate the value of digital marketing.

So the Atlas team developed a tool called Offline Actions to unify offline sales and online advertising spending to ensure that every digital marketing investment gets the expected output. Advertisers using Atlas can now upload point-of-sale (POS) data into the tool to see in real time how their online ads drive offline sales.

2. Path to Conversion

The second tool is called Path to Conversion, which is a cross-screen conversion rate monitoring tool. Facebook uses an account system instead of cookies to achieve simultaneous detection of different platforms to clarify the real conversion path of consumers and help advertisers optimize the channels for budget delivery.

3. Video Ad Serving

The third tool is naturally for video advertising services, called Video Ad Serving. It is a video advertising toolkit that allows advertisers to deliver video ads to audiences in a programmatic way on the Atlas platform. The service will be launched at the end of March.

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This article was written by @Morketing and published by (APP Top Promotion). Reprinting this article must be approved by Top Promotion , and please attach the link to this article!