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Facebook Dynamic Ads: The Relevance Game

Dave LeDonne

Facebook is pretty much taking over the world. It recently announced that its revenue hit a record high of $5.84 billion during the last quarter of 2015, not to mention it also has the world’s #1 mobile app.

However, while Facebook continues skyrocketing, more than a few e-commerce pros treat it mainly as a place to grow brand awareness or build communities of evangelists, and view ads in its News Feed as a simple source of traffic, not conversions.

But, Facebook might soon become a serious e-commerce revenue engine. What has changed? Facebook’s dynamic ads. Launched in 2015, these product-level ads offer the ability to finally unlock the network’s potential to drive direct response sales, not just brand equity or community engagement.

It All Comes Back to Intent and Relevance

Intent. You see its presence (or lack thereof …) on Facebook and other acquisition channels discussed ad nauseum, but what does it really mean?

It’s simple. On so-called “intent” channels like Google Shopping PLAs, consumers come to the channel with the intent to buy. On Facebook or other “low intent” channels, visitors log on to socialize, educate themselves, or, in my case, obnoxiously root for Notre Dame football (Go Irish!). There’s no obvious purchase intent.

This puts marketers in a bind: On one hand, Facebook has 1.59 billion users, so shoppers must be spending time there, but do marketers spend budget running ads, even product ads, when Facebook members have no intent of shopping via the channel? 

To actually sell products, e-commerce pros need short-term views into their customers’ recent actions. What does a consumer want to buy today — this minute?

As a solution, Facebook went ahead and assembled one of the most detailed collections of demographic and behavioral data ever. Every single action that a consumer takes on Facebook adds another data point about who he or she is. (Yes – “like” that Dog Rescue Foundation page and Facebook’s noted you as a supporter of our furry friends.)

Facebook mines this data over time, and as a result, the data forms a scarily accurate long-term picture of who users are and their interests that marketers can use to target their ads. (Seriously, Facebook knows a lot about us.)

However, even though a 27-year-old male Facebook user likes hockey, belongs to an amateur hockey league, and just posted an update from a Flyers game, does not mean he will buy a hockey stick today, tomorrow, or at any point this year. And remember, he’s probably on Facebook to socialize, not shop.

To actually sell products, e-commerce pros need short-term views into their customers’ recent actions. What does a consumer want to buy today — this minute? The answer lies in his or her actions on retail websites — in particular, events such as viewing certain pages or products, adding items to a shopping cart, or checking out. In short, retailers need to bring relevance to the Facebook game.

Facebook Dynamic Ads: Connecting Intent With Relevance

Facebook dynamic ads allow e-commerce pros to leverage the data points which are most indicative of customer intent in the short term, while connecting with their customers on the world’s most popular social network.

Facebook dynamic ads differ from traditional News Feed ads in a few critical ways, all of which let you respond better to short-term customer actions:  

  • They go beyond demographic and behavioral data by correlating intent with relevance. The custom audience pixel is the foundation of every dynamic ad campaign — you must set this up when creating your campaign. Quickly installed on any site, the pixel tracks variables including products added to cart, purchases, and even product/page views. You can then create audiences in Facebook using these events. We have found that these intent-driven audiences are up to four times more likely to convert into a sale than the average user.
  • You can advertise your entire catalog. Unlike traditional News Feed ads, which locked you into promoting just a handful of products, dynamic ads are built to scale. Dynamic ads let you quickly show off your entire catalog. Just upload your product feed to Business Manager and you’re off to the races. You can even automatically turn off ads for products that are no longer available or out of stock. That’s because …
  • Facebook dynamic ads are, well, dynamic. Once you’ve uploaded your product feed and set up your pixels, Facebook will automatically pull the most relevant product(s) from your catalog for every unique ad. You no longer need to configure multiple pieces of creative for your campaign; after the initial front-end work, Facebook handles much of the heavy lifting. This means each user sees the most relevant product from your thousands or millions of unique SKUs at any given moment.

After reading all that, you may be thinking, “Wow, that sounds like a lot of work.” True, setting up a dynamic ad campaign — i.e., uploading your catalog, making sure the pixels are properly installed and firing, etc. — is more challenging than creating your average static News Feed ad. But take a deep breath  …

Online retail is crowded, and Facebook dynamic ad campaigns are a new opportunity to get an edge on your competition that’s too good to pass up — and worth the added effort.

There’s no magic formula. But there’s no limit to the possibilities, either. As you tie events together, you should get a fuller picture of the users on your site and how their actions predict intent to purchase, so you can refine your audiences accordingly. Even custom events such as time on page, multiple page views within a category, and opening the reviews tab can be explored to paint a picture of user intent.

Do it right, and you’ll quickly find that Facebook dynamic ads let you target the right users, with the most relevant products possible, at the right moment. This adds your own measure of relevance to a channel that lacks it — and makes Facebook more than just a branding outlet.  

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