Source: Facebook
Facebook customizes ads to local inventories
Facebook has introduced “dynamic ads” that enable retailers to showcase products available in the store that’s closest to the person seeing the ad.
Early last year, Facebook introduced “product ads” that were tailored to an individual based on their activity and interests. With dynamic ads, messages are further customized based on nearby product availability, pricing or promotions. The goal is to reduce the occurrence of out-of-stocks or inaccurate local price information for items shown in the ads.
“If a fashion retailer wishes to advertise a nationwide sales event happening at every store, dynamic ads for retail will only showcase products that are in-stock at a nearby store and display the price found at that location,” Facebook wrote on its blog. “As the ads are linked to the local product catalog, if a product sells out in one store the campaign automatically adjusts so that people in that region will no longer see it advertised.”
Dynamic ads offer a number of features designed to further optimize the shopper experience:
- Local availability: An availability indicator on the ad shows people that a product is in-stock at a store near them with a link to directions for that store;
- Product summaries: Facebook-hosted product summaries can give potential shoppers information on product details without the need to leave the Facebook app;
- Different actions: Product summaries can offer ways to contact the nearest store, buy online, or save the product for future reference;
- Similar products: Similar products available at the nearest store can be featured “so people can browse the aisles right from their phone.”
Facebook is first testing the ads with Target, Macy’s, Abercrombie & Fitch, Argos and Pottery Barn before instituting a wider rollout.
“It truly allows us to personalize product ads based on online behavior and inventory at the nearest Macy’s store,” said Serena Potter, group VP digital media strategy, Macy’s.
Facebook also introduced new optimization tools helping retailers reach customers more likely to visit their stores.
Google has similarly introduced a number of updates to link shopping ads to image search, local inventories and in-store pickup links.
- Enhancing Mobile Ads to Drive In-store Sales – Facebook
- Drive Conversions on Every Device with Dynamic Product Ads – Facebook
- Facebook encourages visits to physical retailers through customizable ads to local inventory – Los Angeles Times
- Facebook makes its dynamic ads more friendly to brick-and-mortar – TechCrunch
Discussion Questions
DISCUSSION QUESTIONS: Do you see customizing digital ads to local in-store inventories as a major step forward for social commerce? Which features included in Facebook’s dynamic ads will help drive in-store traffic?
Poll
BrainTrust
Ken Morris
Managing Partner Cambridge Retail Advisors
Ken Cassar
Principal, Cassarco Strategy & Analytic Consultants
It’s incredibly frustrating to see an ad, want the product, go to a store and find it’s out of stock. I think this is a benefit for consumers and a strong selling point for retailers. It does, however, put pressure on retailers, particularly Target, to ensure that stores are fully stocked. The marketing departments of major retailers may go nuts trying to figure out which ads ran and which did not, due to out-of-stocks. And there will be pressure on the IT departments to deliver accurate in-stock information. Overall, it’s a win for consumers.
Customizing the ads to local availability is of course a benefit to the consumer. With this type of offer comes the challenge to the retailer to have an accurate inventory on-hand for each item, in each store, in real-time and to pass the data, again in real-time, to the social medium that will post the ad. This is not a trivial undertaking for many retailers. Accuracy and timing are key ingredients for the success of this method of advertising.
My only concern: the worthless website that is most likely to misuse a shopper’s personal info can help them shop. Most Facebook users do not care. I estimate customers will use this once — get ready for the junk mail and targeted marketing and more hackers heading their way. Worthless marketing.
This customization is a logical step for social media and retailers. The Holy Grail would be to connect specific consumer data (rewards cards, frequent shopper, etc.) through social media to use in this. I think there could be some consumer push-back on this but it certainly would strengthen the practice.
Matching customer geolocation information with store location and inventory is a smart strategy. By only promoting products that are available, retailers can avoid the unpleasant experience of consumers’ driving to the store for a promoted product and not finding it on the shelf — resulting in a very bad customer experience.
Driving online social media commerce to the store is further evidence that the store is still very relevant. Consumers like the entertainment of the physical shopping experience and if retailers provide stellar service when the consumer visits the store, it can result in incremental sales from sales associates’ guided/suggested selling.
Of the new features of Facebook dynamic ads, I think the local availability will drive the most store traffic. If the ads highlight the fact that it is currently in-stock at XYZ store, consumers might be more inspired to make a quick trip to the store to get it before it is gone.
It will be interesting to see how this plays out and how well retailers can or will measure the conversion rate on the dynamic ads.
This is a genius way to turn those who are casually browsing into real customers.
Customers complain that brick-and-mortar stores are understocked, so the “local availability” feature will be a huge pull for in-store traffic.
Plus, enabling click-thru customers to compare online and in-store pricing/availability will reduce cart abandonment. When a customer feels like they’re making a smart purchase it doesn’t feel like in impulse buy anymore. This is bound to increase the Facebook spend.
This is a great move but the jury is out until I see what the ads look like in stream. If they are all sales-y then not so much. Facebook has done a pretty good job of not making the ads too intrusive. You just slide by them or stop if something catches your eye. Making them more relevant should be a winner. And that’s my 2 cents.
It’s interesting that the goal seems to be driving traffic to the store. I think that e-tailers and aggregators like Amazon would combat this with a clickable link and free returns.
This is very clever and could be a huge opportunity for retailers to blow out volume on heavily promoted items as well as to quickly move inventory on clearance merchandise. The key will be Facebook’s ability to turn the ads off quickly and for retailers to truly understand their inventory — avoiding frustrating out-of-stock situations. My guess is that there will be some highly publicized failures early on as everyone figures out how to make this work, but that this could be a game-changer in the future.
This is an excellent concept. It adds to further customizing the experience for the consumer. You target Facebook ads to specific groups who you know should be interested in the product. Now you ensure that it is available. (It’s quite frustrating to find product is back-ordered or out of stock.) It merges marketing and distribution.
While I think all four of the features in Facebook’s dynamic ads are relevant, I like the “Different Actions” feature, which gives the consumer the choice of how they want to buy.
Very smart concept and approach to some of the worst words in retail — “out of stock.” Matching dynamic inventory with consumers who are looking for specific products in a particular category is a great way to shape local ads to segment target markets.
Smart retailers maximize their marketing budget ROI by only spending on digital ads where they are competitively priced AND have product availability. Facebook’s announcement helps address only the latter half of this equation, but that is still better than what Google offers today. Retailers need regionalized/zone pricing and product intelligence to address both key cogs in the marketing ROI machine.
Three quick thoughts:
How will consumers know that this benefit is directed to them?
It’s very odd that the Facebook-provided visual for this story is for a handbag on eBay, where it matters not where the inventory resides.
I hope Nordstrom participates soon since they rarely have what they advertise online in my local store!
Even with wide adoption of smartphones, customizing ads to interests, seasonality and location is a proposition that only a few online media properties can execute. Facebook is one, Google is another.
From the consumer’s perspective, Google’s product tied to in-store inventory beats Facebook’s. Google offers more choice and more selection for two reasons. First, most shopping trips are planned, rather than impulse. Google Local Inventory Ads start with consumer search — intent to buy, not intent to sell. Second, Google has more advertisers, which means more inventory, more choice, and better prices. Further, advertisers can add promotion on Google at any time.
More interesting in the Facebook announcement were the other tactics to allow shoppers to choose to go to the store or buy online: lookalike products, wish lists, find out more, and other choices of actions will make Facebook ads more useful for social commerce.