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Facebook finds a new way to pursue e-retailers’ ad dollars

February 17, 2015 11:40 AM
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While Facebook Inc. has long offered e-retailers an array of tools that lets them target consumers with products, online merchants still had to do the guesswork of figuring out which items might entice a consumer to click and buy.

The social network’s newest tool, announced Tuesday, aims to streamline that process by letting merchants upload their entire catalog, then automatically target consumers with ads featuring products in which they’re likely to be interested.

Marketers can use the tool to aim ads at consumers who visited their site or app, or to reach people based on their interests or location. They can also fine-tune ads to highlight products that a particular consumer viewed most recently, for example, or best-selling products.

Because the tool can connect with a retailer’s inventory system via an application program interface, it also can turn off ads for products when they're out of stock. Retailers who prefer not to use the API can schedule automatic updates that Facebook will implement on a regular schedule.

The tool works by using Facebook’s conversion pixel or its mobile software development kit to track which items a shopper looked at on a retailer’s site. The retailer can then target that shopper with news feed ads featuring the last product the shopper viewed or related products. Marketers also can override the automated nature of the new ad system by setting parameters that feed ads to all Facebook users who meet those qualifications.

Facebook’s latest e-commerce marketing push makes perfect sense, says Colin Sebastian, a longtime Facebook observer and e-commerce analyst at Robert W. Baird and Co.

“The news feed is fast becoming some of the most valuable real estate for advertisers, and e-commerce is a good fit given Facebook's ability to target to individual users,” Sebastian says. “When this works well, users will see product ads that are relevant to them, and which should increase click-throughs and conversion rates for advertisers.”

The tool also is in line with Facebook’s efforts to make the ads that consumers see on its platform more relevant, he says.

“This is another step for Facebook in performance-based advertising, and that’s what continues to separate Facebook—and Google—from most other display ad platforms,” Sebastian says. “Relevancy will be key for Facebook since users don't want to see ads on their feed they can't relate to.”

Target Corp., No. 18 in the 2014 Internet Retailer Top 500 Guide, is among the first merchants to use the tool.  “Early results have exceeded expectations, with a 20% increase in conversion compared to other Facebook ads,” says Kristi Argyilan, Target’s senior vice president, media and guest engagement.

The tool has worked particularly well among mobile shoppers, she says, who are converting at twice the rate of its other Facebook mobile ads.

For the past few years, Facebook has had a strong mobile advertising program thanks to its built-in advantage in that it can link consumers’ mobile and PC actions because users log on to its platform. That’s different from other web sites that host ads because the cookie-based tracking methods marketers are accustomed to using on the web don’t work to track the activity of mobile consumers. A single cookie can’t track a consumer’s actions as he moves between a mobile browser and an app, nor can it link a consumer’s actions on a desktop computer to his actions on a tablet or smartphone. 

 

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