Facebook Will Shutter Activities For Mobile Web and In-Stream
Facebook on April 11, 2020, will shut down the Audience Network and no longer fill any requests to web and in-stream placements. Now, mobile marketers will face problems who administered ad campaigns through Audience Network. As per their blog post, Facebook will record data in its server for six months after April 11, granting access to active accounts.
The exact rationale behind this move is unknown but sources said the decision is a response to recent changes made by the browser companies to turn off cookies in the mobile web environment, plus protecting brand safety along with limitations on data sharing.
Ruben Schreurs, CEO of Ebiquity said,
“There’s not just a dotted line between Chrome’s third-party cookie ban and this – it’s a direct result of the movements by Safari and now Google.”
However, a Facebook spokesperson said,
“We’ve made this decision based on where we see growing demand from our partners, which is in other formats across mobile apps.”
In 2014, Facebook launched its Audience Network offering advertisers to extend its Facebook ad campaign to third-party apps. In 2016, it expanded its network to mobile websites which include big names like Tik-Tok, Tinder, and Pandora to name a few.
The financial impact of the shutdown is still unclear on Facebook advertising revenue but based on estimates, the mobile web arm represents a tiny part of Facebook’s overall $70.7 billion in revenue for the fiscal year that ended on 31st Dec 2019.
According to the Audience Network by Facebook website, it paid more than $1.5 billion to publishers and developers in 2018. A marketer called the closing of the Audience Network web arm a fair move and further said,
“The web part is the riskiest — brand safety, ad fraud, viewability concerns and also space where Google and others are so dominant.”
In 2015’s fourth quarter, the Audience Network had a $1b revenue run rate in ad spend when it was just catering to mobile apps and Facebook hasn’t provided any updated number since then. The revenue split between the Audience Network’s web and app arms is unclear but sources suggest apps segment contributed a higher proportion.
On Facebook’s full-year 2019’s earnings call, Facebook CFO Dave Wehner said,
“We are seeing headwinds in terms of targeting and measurement, but as I noted, the majority that impact lies in front of us.” He pointed to three main factors causing headwinds: global privacy regulations, Facebook’s own privacy settings such as the’ Off-Facebook activity tool’ and “product changes and future plans” announced by operating systems and browsers such as Apple and Google, which will limit Facebook ability to use signals received on third-party sites.
Facebook, four years ago shut Live Rail, a video ad exchange business it had acquired for $400 million to $500 million just two years prior, citing ad fraud and viewability issues. That same year, Facebook’s pullback in ad tech includes the closure of FBX, a desktop ad exchange built in-house. Later that year, Facebook started to shut down its Atlas ad-buying platform it had purchased from Microsoft in 2013. In early 2019, Facebook stops Audience Network’s connected TV service.
It is a fair bet for Facebook to get out of open programmatic and prefer owned-and-operated apps, where it can have a 100 percent margin for any ads sold compared to selling ads on other properties where it would have to enter into a revenue-sharing contract. Facebook properties are growing steadily and its app portfolio has been a front-runner in social networking and messaging. In Q4, users and revenue grew while ad prices remained stable showing people are spending more time with Facebook apps. By having a software development kit for gaming, dating, and music apps, Facebook can share its performance-advertiser demand with the titles where users spend most of their spare time on their mobile.
The open real-time bidding environment is under scrutiny from regulators in Europe where U.K’s data protection authority has called on ad tech companies to clean their act or face penalties under the General Data Protection Regulation in Europe. Therefore from a regulatory point of view, it makes sense for Facebook to limit its exposure to data leakage and Consent management issues as Audience Network might extend beyond its walled garden.
As of now, Facebook will continue to work with app publishers and remove mobile web publishers from Audience Network because growth is with apps, and so, a Facebook spokesperson said “focusing our resources there moving forward.”
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