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A Beginner’s Guide to Facebook Dynamic Product Ads

Banner blindness affects 86% of consumers today.

Ad blocking software usage has quadrupled in the past three years, according to the MIT Technology Review.

Only 20% of Facebook posts generated an emotional response, while ZERO ads did, according to a study from Havas Media. Which, for an inherently emotional medium, is not good.

In a world overrun by advertising, consumers are becoming immune. Or actively taking steps to replace ads altogether. That’s why the average banner ad click-through rate is 0.1%.

You don’t beat these grim numbers with more ads. You do it through better ones. Specifically, with ads that are more targeted and more relevant.

And Facebook’s Dynamic Product Ads are one of the best ways to do that.

Why are Facebook Dynamic Product Ads Important?

Marketing automation has been one of the biggest marketing trends over the past few years.

The delivery of the right marketing message, to the right person, at the right time pays huge dividends. Specifically, greater click-through rates and conversions.

Primarily email based up to now, the Aberdeen Group found that personalized emails improve click-through rates by 14%, and conversion rates by 10%. While Jupiter Research reported that relevant emails drive 18 times more revenue than broadcast emails. 18 times!

Email-based marketing automation techniques also open up a whole new world to scale internal resources. It’s estimated that companies can see a 15% savings on creative production with marketing automation, according to Gartner Research.

Facebook’s Dynamic Product Ads are another step towards digital ad automation, delivering the same benefits like greater relevance and timing, which increases click through rates and drives more revenue (all while lowering costs too).

Early adopters from impressive brands have already reported glowing results according to Facebook.

John Boris, CMO at Shutterfly, saw a 20%+ increase in click through rates. Kristi Argylian, Senior Vice President at Target, reports that these ads have resulted in a 20% increase in conversions compared to other Facebook ads. And The Honest Company saw a “34% increase in click through rates AND a 38% reduction in cost per purchase.

If that’s not enough, Smartly saw a 730% click through rate increase over static ads.

Why the glowing results?

These new dynamic product ads give you the ability to granularly target people with highly relevant ads at all stages of the sales funnel. Facebook, like all social media channels, has never been known for its ability to generate sales quite like AdWords because they lack a very important ingredient: purchasing intent.

But these new dynamic options give advertisers a powerful alternative to increasing advertising ROI (as evidenced by the stats above).

And unlike AdWords or Google Shopping campaigns, you’re not completely limited to a small set of specific key phrases, or slugging it out with the competition to reach those few searchers.

Instead, Facebook’s dynamic product ads are more like remarketing display ads on steroids, targeting users based on past actions (or inactions) on the advertiser’s website or application with a perfectly timed ad.

Here’s how they work.

4 Easy Steps to Setting Up Facebook Dynamic Product Ads

Getting some dynamic ads up-and-running requires a little technical help, but otherwise isn’t too difficult. Here are the four simple steps.

1. Create and Upload a Product Catalog

The first step is to line up your product details in a separate XML or CSV file. List your product attributes – like product ID, product name, description, landing page and image URLs, etc. – on new rows, with the headers at the top of each column.

This process is kinda similar to setting up a Google Shopping product feed. Facebook says their product catalog is also backward compatible, meaning that you might be able to upload previously created catalogs or feeds and it should work.

Once completed, your product catalog will act as a ‘virtual database’ where information is pulled in dynamically (you know, like the name suggests) depending on what the pixel is instructing. Which brings us to…

2. Configure Your Pixel

Dynamic Product Ads use the same custom audience pixels. So if you already have it installed on your website or application, you just need to modify it with a few lines of code that track user actions and send that data back to Facebook.

According to the docs, you have to add at least these three events:

For example, the ‘ViewContent’ event should look like:

Fortunately, you can use the Chrome extension to verify that yours is setup properly, or troubleshoot and debug any issues.

Or better yet, just forward these Facebook pixel details to a developer and let them take care of it.

3. Setup a Dynamic Ad Template

Once the (a) product catalog is setup properly, and (b) you’ve updated your Facebook pixel, it’s time to create a dynamic ad template that will be used as the starting point across all products.

Keep in mind that these can either be in a single-product or multi-product format, directly on the Newsfeed or Right-Hand column. And they work across devices, so your options are pretty wide open at this point.

Obviously, you can spot the placeholders above for the name and description, which will be personalized based on that ‘database’ or catalog you setup a few minutes ago.

4. Start Your Campaigns!

Now Facebook will pull in data from a prospect or customer’s site visits and display the appropriate ad based products browsed, keywords searched, etc. The example Facebook provides is if they view umbrellas on your site, here’s what they can expect to see:

One of the best Dynamic Product Ad features is that your ads should now also reflect current inventory levels and pricing. So there shouldn’t be any discrepancy or need for remembering to go back and manually edit your ad campaigns (which, let’s be honest, typically falls through the cracks).

But wait, there’s more! It’ll also record visitor purchases, meaning those new customers won’t see conflicting or confusing product ads for stuff they just purchased. Yay automation!

Compared to the potential benefits, Facebook’s Dynamic Product Ads are relatively straightforward and easy to setup. Now, let’s dive into the good stuff.

How to Implement Dynamic Product Ads

Some smart dude once said, “People don’t go to Facebook to make decisions, they go to avoid making decisions”.

Still true. BUT…

Dynamic Product Ads enable you to now infer purchasing intent.

In English: you have greater control over targeting specific groups of people with highly relevant ads that match where they are in the sales funnel.

You can create different ads for people depending on their interactions with you. For example:

  1. Brand new: People lacking brand awareness shouldn’t see product ads. Duh! Instead, show them content and other incentives that target their interests. Generally, that means stroking their vanity or fear to inspire action.
  2. Product view but no purchase: You got ‘em on the hook, but no bite just yet. Follow up with the products viewed and recommended or complementary ones (based on past purchase history of similar customers). Most new visitors (~96%) aren’t ready to buy just yet, so keep chumming the waters until they are.
  3. Product added to cart, but no purchase: Treat these people with classic email cart abandonment techniques like these ones from Shopify.
  4. Upsells to recent purchasers. Upsells immediately after a new purchase are effective, because they work! Brand new customers are increasingly more likely to purchase something else from you than cold prospects with no prior history.
  5. Cross-sells to past customers. Amazon Prime members convert 74% of the time. Lesson? Find your F$#KING Prime! You’ve read the stats. You already know past customers are worth more (and convert higher) than new ones. So why do all (or the vast majority) of your ads target new customers instead of rewarding and encouraging past ones?

There are even more possibilities for granularity depending on how OCD you are, like targeting the colors potential customer’s view on your site.

I could go on-and-on about incorporating more contextual marketing tips, like these brilliant ones, but I’d have to take a cold shower afterward.

One quick caveat though before proceeding:

Watch out for users receiving multiple or conflicting automated messages. When using email marketing automation, you can assign ‘suppression’ lists or assign ‘goal lists’ so when someone completes the action you’re looking for, they’re automatically removed from that old list.

Typically this is simply the next step or (micro-steps) in the funnel. For example, if someone where to go from the ‘cart abandonment’ stage to a ‘successful completion’. Make sure you to double check these campaigns as they’re going live for any potential conflicts that haven’t been addressed.

Conclusion

By 2020, customers will manage 85% of their relationship without talking to a human, according to Gartner Research.

People also said we would be riding around on hoverboards by now. Not quite there yet.

But still, getting anywhere close to that shocking statistic underlines the importance of how marketing automation is expanding from emails to advertisements and more.

Generic banner ads and other forms of display advertising are ignored, blocked, or replaced by today’s savvy web surfers.

The only practical solution to getting your messages through is by being more accurate with your targeting, increasing relevancy, and utilizing timing to your advantage.

Facebook Dynamic Product Ads present one of the best ways to deliver those tailored messaging to people in specific stages of the sales funnel at key times to influence the actions you need to grow.