Facebook Exchange & How My Drugstore.com Basket Got Turned Into Facebook Ads

It seemed uncanny. There, among the ads shown to me on my Facebook page, was one for a specific type of razor I’d been looking for off of Facebook. How did Facebook know? Simple — “retargeting” through the recently launched Facebook Exchange (FBX). If you’re not familiar with FBX or retargeting in general, come along. Here’s a personal case study to how it all works.

What’s Retargeting?

Retargeting — sometimes called “remarketing” especially by Google — is a system that allows advertisers to show you ads based on some of your previous actions on the web. For example, say you went to a hotel web site. With retargeting, the hotel can keep showing you messages about its hotel as you go to other web sites, if those sites carry ads that are part of an ad network that allows retargeting.

Google runs one of the biggest, if not the biggest, ad retargeting networks. Our publisher Third Door Media even uses it to retarget ad about our SMX conferences. Susan Wojcicki, who oversees all of Google’s ad efforts, even joked during a keynote conversation at our SMX West event earlier this year about how our ads through her network meant “I was seeing my face on every site I visited.”

Facebook Gets Retargeting

A new chapter in retargeting opened last month, when the Facebook Exchange was launched. FBX meant for the first time, advertisers were able to retarget consumers within Facebook in a similar fashion to how they were able do to so on the open web.

That leads to my razor ad, which is the first time in the month since we’ve had FBX that I looked at an ad and thought “wow” in terms of knowing it was an FBX ad and just how effective it was.

My Personal Retargeting Story

A few months ago, I’d bought the wrong type of razor blades and opened the package by mistake. I use a Gillette Mach 3 razor, and it couldn’t be used with the Gillette Sensor blades that I purchased. Since they were opened, I couldn’t return them. I figured I’d just buy a Gillette Sensor handle and use the blades up that way.

As it turns out, no one seems to carry the Gillette Sensor handle in stores. That’s not a surprise, in retrospect. This particular razor, launched in 1990, is now twenty years old. Clearly plenty are happy with having “only” the two blades it carries, since the blades themselves are sold everywhere. But the handles? I found I needed to turn to the internet for that.

Last week, I searched on Google for some sellers, opening up multiple windows as I usually do. I ended up buying from a place on eBay. But I’d also found the razor at Drugstore.com, where I’d placed it in my shopping cart:

By the way, I don’t have an account with Drugstore.com. I wasn’t logged in there. It apparently keeps a basket for people who visit even without being logged in, one linked to a cookie in their browser, something that’s fairly common with online retailers.

Later that day on Facebook, the ad below caught my eye. It was for the Gillette Sensor razor:

I knew this had to be FBX in action. There was no reason for me to suddenly be seeing ads for a 20+ year old razor showing up at Facebook except for my activity off Facebook previously that day.

Curious, I tried another experiment. I picked another item at random, Phisoderm skin cleanser, and put that in my basket. Then I went to Facebook, where this ad immediately began appearing:

It seemed pretty clear. Anything that was put into a basket on Drugstore.com had a high chance of being turned into a Facebook ad through FBX. But to be sure, I checked with Walgreens, which owns Drugstore.com. The response:

We are unable to comment on marketing strategies.

Oh. I didn’t see anything negative here. Well, there are some potential privacy issues that I’ll get into at the end of this story. But I didn’t expect Walgreens to simply not comment at all. Nor did I expect to discover that within two hours after I got that response earlier today that the retargeting would stop.

Currently, I no longer get either ad above, which were showing this morning. I also don’t get ads for any new items I put into my basket. It could just be something that’s unique to me, but I suspect Walgreens might have been a bit freaked out by my question and put retargeting on hold.

How To Tell When Ads Are Retargeted

I have asked Facebook if this situation was due to retargeting but haven’t heard back. I also put the question to Chris Zaharias, the chief revenue officer at Triggit, one of the nearly 20 companies that Facebook works with to do retargeting.

To be clear, Triggit isn’t the solution that Walgreens is using. I’ve just known Zaharias for years, knew he was an expert in Facebook Exchange and that he could probably confirm quickly if this was actually FBX at work. Yep. Zaharias told me:

That is almost surely retargeting via FBX.

The way to confirm, though, is to click on the ‘x’ on the upper right portion of the ad itself, click on ‘About this ad’, and then see where it takes you.

If you’re taken to a Facebook page, it’s interest-based targeting and not FBX, but if you’re taken to the page of the DSP/retargeting vendor powering the campaign, then it’s retargeting via FBX.

They’re not a customer of ours.

Since the ads are no longer appearing, I can’t do the test that Zaharias describes above. But I can do it on other ads. Here’s what a normal Facebook ad would show:

That’s an ad from Zappos, and if you hover over to the top right corner, you get an X. Click on the X, and and the pop-up window shown appears, with an option called “About this ad.” Clicking on that brings up a page on Facebook describing its ads:

Now here’s a retargeted ad. This time, it’s for Ally Bank:

When I click on that ad, I get to this page from DataXu:

The page doesn’t explain clearly that the ad is being delivered Facebook Exchange (Triggit’s privacy page is the same, and other FBX partners are probably similar). There’s another privacy issue here (easily fixed), which I’ll get to next. The page does provide opt-out options.

Postscript (7:30pm ET): I’m now seeing the Drugstore.com retargeted ads again, and from the “About” landing page, Drugstore.com seems to be working with TellApart for the retargeting.

Privacy Issues

On the privacy front, you can imagine that there are some potentially embarrassing things you could buy on Drugstore.com that you wouldn’t want turning into ads on your Facebook page, which might be seen by coworkers or others who might be looking over your shoulder.

The same is true for any type of retargeting, of course. The solution seems to be getting the balance right: ensuring that consumers understand when they are being retargeted and how they can opt-out, when this happens.

With the Facebook Exchange system, I think it would be better if Facebook pointed to a page of its own explaining that the ad happened through retargeting, what network was involved and how this can be disabled if a consumer is concerned either through Facebook or through the provider.

New Frontier For Marketers

As for advertisers, retargeting is of course a powerful system that’s been used outside of Facebook and now becomes attractive to consider on Facebook itself. Zaharias thinks it’s even better on Facebook than on the open web:

The fact that so many people spend so much time on Facebook is what makes retargeting on Facebook so much more effective than retargeting elsewhere.

Try retargeting me via the other exchanges – where it’s about finding me as I move at high velocity across a large number of sites, in my case PaloAltoOnline, Y! Sports, SFGate, ZeroHedge, DrudgeReport, UnderwaterTimes, ScienceDaily – and the ad effectiveness will be much lower since I’m spending so little time on each site.

But people go to Facebook without anything in particular in mind other than taking a break from whatever they’re doing, and as such the ads are viewed and have much more of an impact in regenerating the interest/desire/action that the user had on the merchant’s site. Also, the sheer volume of users and time spent on FB means you can target a much great portion of your site visitors immediately after they leave your site, while their intent is still high.

Since his company is all about Facebook retargeting, you can expect Zaharias to be bullish on the ads, of course. But there’s no doubt that the FBX-targeted ads jumped out at me in a way that other Facebook ads have not. I expect others will be noticing them — and clicking on them — as well.

Related Articles

Related Topics: Channel: Social Media Marketing | Facebook: Facebook Exchange | Features & Analysis | Retargeting & Remarketing | Top News


About The Author: is Founding Editor of Marketing Land. He’s a widely cited authority on search marketing and internet marketing issues, who has covered the space since 1996. Danny also serves as Chief Content Officer for Third Door Media, which publishes Search Engine Land and produces the SMX: Search Marketing Expo conference series. He has a personal blog called Daggle (and keeps his disclosures page there). He can be found on Facebook, Google + and microblogs on Twitter as @dannysullivan.

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  • Larry Kim

    looks a lot better than what they had before. Danny! Lack of re-targeting was one of the big reasons i was saying FB ads were stinkers back in may.

  • Maggie Tattersall

    Thanks. Very interesting. I’m just trying to figure if G+ are using comments in posts to target ads. I seem to have had ads following me around after mentioning them in posts. Do you have any information on that? Are you aware that Google operating a similar retargeting system? I’m guessing it does.

  • http://twitter.com/maldavanumber1 daniel

    Nice work Danny. Do you think Facebook using our privet messages for FBX?

  • Pat Grady

    In the affiliate sphere, with rampant rebrokering / redistribution of cross published links that masked real transparency, we’ve seen years of sub-affiliate id “CPA” networks fraught with privacy and consumer abuse problems. Similarly, in the shared tagged retargeting sphere, because there are simply too many taps (into or out of the ecosystem), each one individually cannot effectively know the actual information sources (or destinations) daisy chained to one another. A few bad apples spoil the barrel, and isolating the bad apples is a constantly moving shell game. Stock market exchanges have strict rules and oversight for each participant (buyer or seller) at their core, with a single entity responsible for enforcement… imagine if instead of having their oil pipeline tap oversight structure, they had remarketing’s open exchange layered ring structure… yep, a storm is brewing. Google’s rightful fear of govt(s) intervention has them shaping their own pipe with internal single entity tap oversight, but the others don’t feel that pressure, yet.

  • Pat Grady

    The question isn’t whether you trust XYZ to choose their partners wisely, they choose partners who each also choose partners (via cross brokering). What a tangled web they’re weaving.

  • http://twitter.com/bretlowery Bret Lowery

    “Currently, I no longer get either ad above, which were showing this morning. I also don’t get ads for any new items I put into my basket. It could just be something that’s unique to me, but I suspect Walgreens might have been a bit freaked out by my question and put retargeting on hold.”

    If you checked same-day, it’s likely a frequency capping of the ad prevented viewing. Ads are often frequency capped to a max number of views per day per user browsing. This is to spread budget around as many users as possible, and to avoid psychological turnoff to seeing the same ad over and over.

  • Pat Grady

    “advertisers should be working with 1st party retargeters” should, exactly.

  • http://twitter.com/bradflora Brad Flora

    Great piece. The big brands like Drugstore.com are doing neat stuff with FBX. For small companies who don’t have $10k minimum to shell out for Facebook Exchange retargeting, check out Perfect Audience (disclaimer, I’m a founder). We’re the widest-used Facebook Retargeting platform on the web. No minimum spend. 2-week free trial. Signing up dozens of SMBs a day who want to get into FBX. Check us out here: http://bitly.com/xKrOVV

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