Facebook's LiveRail leaves the ad server business

In an effort to further rival Google's AdSense, Facebook has decided to roll back access to its video supply-side platform LiveRail and focus on its mobile-focused Facebook Audience Network (FAN), to promote its private market place (PMP) offering. Facebook's LiveRail customers (publishers) will be migrated to other publisher products or alternative ad servers, leaving LiveRail to build out its PMP offering, "which lets publishers offer select advertisers preferred access to their prime inventory often for enhanced prices – with a continued focus on native and video ad formats." FAN allows brands to target users with Facebook insights across a network of third-party publishers, and proved successful in Q4 2015, achieving an annual run-rate of £1bn a year.      

Facebook is making significant alterations in its publisher business, by rolling back access to its video supply-side platform (SSP) LiveRail, in favour of its mobile-focused Facebook Audience Network (FAN), as it seeks to promote its private marketplace (PMP) offering, and further rival Google's AdSense.

The social network today (7 January) announced it will no longer be accepting new customers for its LiveRail ad server (which it purchased in 2014), in order to focus attention on its recently launched FAN – a service that lets brands target users with Facebook insights across a network of third-party publishers.

Facebook said that it will begin migrating all its LiveRail customers (ie publishers) to its other publisher products, or alternative ad servers, in order to continue helping them to monetise their inventory.

Instead, LiveRail will build out its PMP offering – which lets publishers offer select advertisers preferred access to their prime inventory often for enhanced prices – with a continued focus on native and video ad formats.

Trumpeting the overehaul, Facebook was keen to point out that such was the success of FAN, that the number of publishers using it has grown ten-fold each year since its launch, with this unit of the business achieving an annual run-rate of a billion dollars a year in the fourth quarter.

A blog post informing users of the changes reads: "At Facebook, when there is a product that gains traction like Audience Network, we look for ways to build it out quickly and make it even better. That also means shifting away from other efforts, if necessary. Today we’re sharing some changes to LiveRail, our monetization [sic] platform for publishers."

The same post also championed the benefits of LiveRail's renewed focus on PMPs, claiming that it now powers 75 per cent of the industry's programmatic PMPs, working with a host of tier one publishers.

Jason DeMarco, A+E Networks' director of programmatic and audience solutions, said: “We have been working with LiveRail via its private exchange service for over three years connecting to programmatic buyers. Nobody else in the market has come close to matching the abilities and effectiveness of LiveRail."

Meanwhile, Peter Naylor, senior vice-president of ad sales at Hulu, welcomed the move, adding that Facebook's LiveRail was the backbone of its Advanced TV offering.

FAN uses the same targeting available for Facebook ads, including Custom Audiences (ie its own first party data), matches that with second party data (or its core audiences offering) and also enables advertisers to target audiences with similar attributes to their existing customer base. In addition, it also features the same measurement tools marketers use for the ad campaigns they run on the social network.

Speaking recently with The Drum, Yoav Arnstein, LiveRail's European chief, said: "We see that when you use people-based marketing off-Facebook [using FAN], you get the same results as when you use Facebook [for an ad campaign], if not better."

He also took the time to comment on earlier reports that the SSP was culling the amount of media owners, such as ad networks, using the service in favour of pursuing more direct relationships with premium publishers in an attempt to improve overall inventory quality.

"For me I would like to look at in the Economist sense, as opposed to The Sun sense," he said. "If it was The Sun, they would focus on who are you guys closing, and who are the bad actors you have, etc... But I prefer to think about it in The Economist sense, which would look at where we are focusing our efforts."

Aside from where to focus its 'limited' resources, despite Facebook being one of the largest players on the internet, LiveRail took the decision to narrow its focus on premium publishers in order to give it more control, and improve quality of ads, according to Arnstein.

"We thought: 'how can we build tools [to achieve the above], and who do we want to give them to, so they can build relevant experiences in engaging creative formats?'," he added.

"It was less about a judgement on the clients' quality, it was just a shift in the focus we have on the type of publishers that can create relevant experiences in the right ad formats."

Facebook's rollout of FAN is yet another front in its ongoing bid to rival Google when it comes to digital advertising budgets, with the pair's other notable area of competition in the 'tech stack' space – the social network's Atlas is strongly tipped to rival Google's DoubleClick for spend.