But is it wise to raise expectations when there might not be any? Facebook Inc. executive Carolyn Everson must feel very confident about FBX, based on the comments she made this week in a meeting with reporters at Advertising Week in New York. Everson came out and predicted with some form of clarity that Facebook Ad Exchange will “unlock a significant amount of spending around the globe.”
First of all, what is “significant”? And does Facebook Inc. believe that FBX will help the economy accelerate its currently slow recovery? However these questions are answered, this seems like a very bold prognostication coming from someone at Facebook Inc..
The Facebook Ad Exchange is a different ad-sales model than Facebook Inc. (FB) has run in the past – and is actually more consistent with what Google Inc. (NASDAQ:GOOG) has been running for years and made much of its ad revenue. FBX involves third parties buying Facebook Inc. inventory, place the inventory into categories according to their own data, then sell that inventory to advertisers. In this vein, the advertisers then can buy inventory using a re-targeting model, which has been effective elsewhere on the World Wide Web.
While Facebook Inc. currently has a small marketplace for FBX, there are those who believe the return on investment is potentially so high that Facebook Inc. (FB) may be able to sell its advertising at a higher rate than it does currently, which would further increase its revenue. FBX is due to be rolled out on a greater scale in coming weeks, though what impact it would have on the company’s fourth-quarter 2012 earnings remains to be seen.
