Facebook Advertisers Now Have More Ways to Create Retargeted Ads

Could be big acquisition tool for retailers

About two years ago, Facebook launched dynamic ads—the retargeted promos that pop up in newsfeeds after someone looks at a product on a retailer's website or mobile app. 

Now the social giant is expanding the format to let advertisers target more Facebook users based on their web activity. For example, someone who has been looking for red dresses across multiple retailers and also likes Facebook posts and pages about dresses could automatically be served an ad for a red dress. In the past, advertisers have only been able to single out folks who specifically looked at a product on their website or mobile app.

"The top feedback and most common type of feedback that we hear is, 'Hey, can you help me drive sales beyond people visiting my website and app, including new customers?'" said Maz Sharafi, director of product marketing at Facebook. "What we can now do is say, 'Who else is potentially in-market for these products?'"

Similar to how marketers already use dynamic ads, advertisers first upload a catalog of products that they would like to promote. They then select an audience of people they'd like to target—say, women in the United States. Facebook's algorithms then look at traffic patterns on retailers' mobile sites and apps as well as information on Facebook to automatically serve a targeted promo to users.

In theory, Facebook says that the new ad format is more akin to an acquisition tool than a retargeting tactic since brands can hone in on folks who may be interested in a product but have not necessarily looked at it online.

"It automates the process of who it can show products to—It takes out a lot of the trial and error and complexity of being able to do this in a manual way," Sharafi added. "For example, to sell 1,000 products you have to create almost 1,000 different ads to reach those products to different people. With dynamic ads, you're effectively creating one ad."

Dynamic ads are initially open to retailers and ecommerce brands in the U.S. with plans to include other regions in the coming months. Online furniture retailer Wayfair has been testing the format and claims that the ads are 20 percent more effective than other types of acquisition advertising.

"We can automatically reach a huge audience with personalized recommendations from our catalog of more than seven million products," said Wayfair's director of marketing Jessica Jacobs in a statement. "With dynamic ads, we are beating our customer acquisition efficiency target by more than 20 percent at a scale that is meaningful to our business."