Retail is big business
Retail is big business. Right now, the sector is beginning to focus its spending on product ad listings (PLAs).
According to the Adobe Digital Index report, retail spending on Google Shopping ads increased 47 percent year over year in Q4 2014 compared to Google text ads, which declined 6 percent year on year. While Google Shopping ads continues to grow at a rapid rate, text ads still own a majority share of retail clicks, with PLAs accounting for 20 percent of total retail search clicks on Google.
Facebook steps into the PLA fold
Facebook® has been continuing to improve its advertising presence by getting smarter in the way it distributes relevant content to an addressable audience at scale. It was clear that it was only a matter of time before the company jumped into the product ads game.
The first move into this arena was with its multiproduct ads, which display a suite of product images to promote within the same ad unit. Our customers, including those in the retail vertical, have found great success in using these, with significant uplifts in conversion rates and lower cost per acquisition.
When we look at post type performance, we can observe this in a different way. According to the Adobe Digital Index report, image-based posts had 2x higher interaction rate than any other post type.
Facebook product ads
Facebook has now introduced product ads, a solution designed to help businesses showcase more of their products on Facebook. The newest version of this, called the dynamic product ad, gives advertisers the ability to dynamically generate multiproduct ads to website visitors or app users.
Multiproduct ads are particularly useful when you have an entire product catalog to promote, although you can still use single ads as well. Dynamic product ads also come with an upgrade to the Website Custom Audience pixel to report product IDs viewed on the website or app.
This will provide stiff competition for Google. Although Yahoo and Bing have shopping ads, based on their share of total search clicks, I doubt that their share of the market kept Google awake at night. Facebook, however, is a different story. Not only does the company have the audience scale that can challenge Google, but it is exceptional at the targeting game.
Key benefits of Facebook product ads
If you are a retailer, you most likely already have a Google shopping campaign running that leverages a product catalog feed. By leveraging this same product feed on Facebook with product ads, you can achieve the following:
- Increased relevance: Show people ads for products from your product catalog that they have already shown interest in, and show only when there is inventory available
- Scale: Promote all of your products with unique creative without having to configure each individual ad
- Always-on: Set up your campaigns once and continually reach people with the right product at the right time based on actions taken on your website or mobile app
- Cross-device: Reach people with ads on any device they use, regardless of their original touch point for your business
Early advertisers who have participated in product ads have reported a 20 percent increase in conversions compared to other standard formats on Facebook.
The convergence of Search + Social
We are seeing more and more convergence between the paid search and paid social world.
- Adobe’s Search retargeting on Facebook where you can leverage search intent signals to retarget people on the social network to drive an overall uplift in your search and Facebook campaigns.
- The recent introduction of Facebook’s Ad Relevance score, which draws a lot of similarities to Google’s Quality Score with some social nuances.
- The extension of PLAs to Facebook. Although Google is seeing the highest growth in terms of ad revenues from PLAs, Facebook is now ready to share in that success.
The announcement of product ads on Facebook is especially exciting for Adobe, as PLAs are a big part of our search business. We can now explore obvious synergies for our retail customers on the platform as a Facebook Marketing Partner. It will be interesting to see how this evolves and rate of retailer adoption. Look out for future Adobe Digital Index reports for updated trends across Facebook and Google!
Facebook® is a registered trademark of Facebook, Inc.