Banner ads “valueless”, Facebook says

Native and video ads offer more value than ad exchange banner ads, according to Facebook.

Facebook’s assertion comes as the company shelved plans to provide demand-side buying to marketers using Atlas, its ad serving and measurement platform. The ad buying plan, abandoned due to the volume of low quality ad inventory, was to utilise Facebook targeting data and buy ads on other sites and in mobile apps.

why atlas

After testing several ad exchanges, Facebook head of Ad Tech Dave Jakubowski says the tests resulted in two major takeaways. In his words: “We were able to deliver ads to real people with unprecedented accuracy, but came up against many bad ads and fraud (like bots). 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.”

The second major finding: “Only two ad formats delivered significant value: native and video.”

Why should you care?

Banner ads and ad networks aren’t going away, not yet anyway. Fuelled by the rise in programmatic ad buying, display is on track to surpass spend on paid search this year — in the US, at least.

Publishers, advertisers and industry organisations like the IAB and ANA will continue working to reduce ad fraud.

But the opportunity to improve programmatic ad buying and targeting utilising Facebook data — that appears to be done and dusted.

Gartner VP Andrew Frank is widely quoted as saying what many others have been thinking: “If the format were as worthless as Facebook suggests, then it would have been unlikely for the display ad market to have grown to around $7 billion…”

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About the Author Jeremy Templer

Jeremy is a Partner and Senior Consultant at SureFire. Jeremy has been working in search since 1996, when he joined the Australian search engine, LookSmart. After relocating to San Francisco, he was instrumental in the development of the company’s paid search ad platform. At analytics company Coremetrics (now owned by IBM) he established an in-house search agency managing campaigns for Coremetrics clients such as Macy’s, Bass Pro and Lands End. At Acxiom he managed members of the pioneering SEO firm Marketleap and worked with clients such as Capital One, American General Finance and Kaiser Health. Joining SureFire in 2009, he is the head of Paid Search Advertising and oversees the delivery of AdWords and other PPC campaigns. He also helps clients make sense of their website data.