Facebook’s New Dynamic Product Ads For Businesses

Facebook has just announced a new unit called “Product Ads” with features aimed at helping businesses sell their products, illustrating a continuing effort in this direction by the social media company.

In its announcement, Facebook called Product Ads “a solution designed to help businesses promote multiple products, or their entire catalogs, across all the devices their customers use: phones, tablets and desktop computers.” By utilizing this new tool, businesses will be able to upload their product catalogs, while Facebook generates ads for items and targets them to users.

A big incentive for businesses is that these ads are dynamically optimized, so that users will see products based on their activity and interests. It can be difficult and time consuming for businesses and marketers to design campaigns for specific products targeted to specific audiences. Finding accurate matches between ad creative, product advertised and person reached involves many challenges, and it often takes a lot of trial-and-error to get it right.

Facebook has a wealth of data about its users, which makes its new dynamic Product Ads a very enticing option for all types of businesses to consider. These ads can be targeted to a variety of different audiences, including people who have previously visited a company’s website or app, or targeted based on criteria such as interests and location. Additionally, the ads include a new format for showing off multiple products, and they can update based on inventory data, thereby removing items once they go out-of-stock.

Facebook wrote that some of the early testers of the product include Target and Shutterfly, and the results reported are very positive. “The multi-product ad unit allowed us to display a variety of products we offer at Shutterfly in a clean, engaging way,” wrote John Boris, Shutterfly’s Chief Marketing Officer. “The ability to control product order placement offered gifting inspiration for our current customers and created a natural introduction of products for our new customers, resulting in a 20%+ increase in click through rate.”

Target’s initial report is also very positive, with the company stating that it has experienced a 20 percent increase in conversion compared to other Facebook ads. Additionally, the company says the ads have performed particularly well on mobile, where it is seeing two times the conversion rate.

Is Facebook’s new ad product a threat to Google?

Google Shopping ads are one of the company’s most rapidly growing business areas, with ad spending going up 47 percent in the fourth quarter of 2014 in comparison to the fourth quarter of 2013. For businesses, being able to retarget products on mobile devices has been a popular aspect of Google Shopping ads. Now that Facebook is offering a similar solution, it’s possible that the company will be able to take a significant portion of the advertising dollars that marketers are spending on Google ads.

Additionally, the Wall Street Journal reports that businesses can take the product feeds that they currently send to Google Shopping and adapt them for Facebook’s Product Ads seamlessly, without any additional work, which could greatly help the social media giant in its efforts to gain these ad dollars.

Product Ads are available now in the API through Facebook Marketing Partners, and will roll out in Power Editor over the next few weeks.