In early February, Facebook announced that it is planning to shut down the mobile web and desktop arm of its Audience Network on April 11th, 2020 (note: support for Instant Articles will remain).
To truly understand what this means for the industry, and our publishers, we spoke with Freestar’s Sr. Director of Revenue Operations, Matt Burgess to do a deeper analysis of the announcement.
What Was The Motive Behind The Shut-Down?
It is no secret that Facebook’s margins are significantly higher in-app than more traditional platforms. According to the Audience Network by Facebook website , Facebook paid out more than $1.5 billion to publishers and developers in 2018. While we can’t say for certain, it’s fair to speculate that mobile web and desktop represent only a very small portion of Facebook’s overall $70.7 billion in revenue reported for 2019.
Additionally, with GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act) now in full effect, coupled with the continued demise of third-party cookies, it has further shined a light on the upside app environments compared to the amount of regulation and hurdles needed to clear in order to comply with typical desktop and mobile web platforms.
With Facebook Audience Network removed from the auction, other bidders will be able to make up the difference — diminishing the net loss significantly.
What does this mean for Publishers?
This change should only affect publishers whose ad inventory was largely favored by Facebook Audience Network. That being said, it is important to remember that just because you are losing a revenue stream, it does not mean it can’t be recouped elsewhere. With FAN removed from the auction, other bidders will be able to make up the difference — diminishing the net loss significantly.
Per Freestar aggregate reporting, Facebook typically sits in the 10th position relative to all other bidders in terms of average monthly revenue. Ultimately, they were a “nice-to-have” demand partner but were far from a top-performing monetization source.
What does this mean for Freestar?
We want to make it known to our publishers that we are here to help anyone navigate this change. Please do not hesitate to speak to your Account Manager about optimization strategies so we can focus on driving more competition to any inventory that Facebook was favoring and winning.
Within the Freestar business, we are ensuring we are diversifying hard into App so we can capitalize on the healthy CPMs that Facebook offers. We find that we are steps ahead of our competitors who don’t have that ability. While any industry announcement can provoke panic, we will continue to work together and remain transparent with our partners and publishers so every transition is smooth and seamless.
