Facebook Product Ads: Is It the next Big Thing in Online Advertising?

Last month, Facebook announced a new feature that will allow businesses to use product ads to create single- or multi-product ads for highly targeted campaigns on the site. Facebook positions this new feature as an opportunity for businesses to showcase their entire product catalog and to help people discover more relevant products online.

So, what does this mean for ecommerce and online advertising in general? It’s definitely a potential channel to reach customers, but what can it offer that other online advertising channels can’t?

Let’s find out.

Display Advertising

Display advertising encompasses many types of online advertising, including: text or image ads, dynamic ads, retargeting or dynamic display retargeting. Dynamic ads are useful because they showcase the actual product/content that a person viewed on a website he or she visited. Once visitors have been to your site, you can utilize retargeting for both dynamic and static display advertisements to get them back to your site.

Display advertising is best for a passive approach to advertising. Although customers aren’t actively shopping when they come across a display advertisement, it helps to spread brand awareness and legitimacy, while keeping your products top of mind. You can create a campaign using Google, Bing, AdRoll or other platforms. Each will have its own display network of sites available to serve your ads. For example, one of the advantages of using AdRoll for retargeting over Google and Bing, is access to social media sites such as Facebook and Twitter to display your ads.

Recap: Great for brand and product awareness, but keep in mind the ROI might be lower because customer aren’t always actively shopping when they see these ads.

Comparison Shopping Engines

But wait, doesn’t Google Shopping showcase product images? Comparison shopping engines, such as Google Shopping, do display product image ads. The main difference between display advertising and comparison shopping engines is the mindset of the customer. As mentioned above, display is passive and shopping ads are active. People are actively shopping when they run across a shopping ad and they are more likely to click through to the website.

Recap: Typically higher ROI than display advertising because it’s direct marketing. It’s a great way to highlight specific products.

Facebook Product Ads

Facebook product ads are a hybrid, so to speak, of display and shopping ads. The intriguing thing about this new addition to Facebook is the advanced remarketing features that it offers. Facebook product ads allow advertisers to combine the power of display and shopping ads with Facebook’s extensive targeting capabilities, offering great potential for higher conversion rates. Currently, the primary use of Facebook isn’t to shop, but these new features could be that bridge to bring people into the mindset of shopping while on Facebook.

Recap: Great way to showcase products that are relevant to potential customers based on Facebook’s advanced user-data and targeting capabilities. But, customers are not actively shopping on Facebook. At least not yet.

So what does this mean for online retailers?

It’s pretty clear that Facebook is looking to compete. This is a big move for Facebook, but not a big deal for everyone else. Advertisements on Facebook are pretty standard these days, the only difference now is Facebook is giving marketers the option to do business with them directly instead of going through a third party.

This doesn’t mean that Facebook product ads are not something to consider. The best defense is a good offense, and if your budget allows, you should be on every channel you can – including Facebook. The more real estate you can take up, the better and if you aren’t already there, then your competition will be.

Although this new feature is something to consider, don’t abandon the basics. Stick with tried-and-true channels first, such as search engine text ads and comparison shopping ads. If you feel you have a good grasp on those, then start to experiment with Facebook product ads on a small scale. If you happen to not be seeing results, then it’s time to consult with an online marketing agency. Online advertising is no easy feat and experimenting without supervision can easily lose you money.

Keep an eye on Facebook product ads; they have potential. It’s the size of that potential that’s still unknown.

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