Why Facebook Dynamic Ads Are a Game-Changer in eCommerce

Ad Creatives
Oct 20, 2021
Dec 13, 2020
12 mins
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Why Facebook Dynamic Ads Are a Game-Changer in eCommerce

Facebook Dynamic Ads are all about relevancy. They make it easy to target eCommerce customers and boost sales, so better start using them to your benefit.

A potential customer enters your eCommerce store and views a few products. Then, they even add a product or two to their cart. But, just before completing the purchase, the baby starts crying, and they have to abandon the items in the cart and leave your site.

Tough luck, right?

But, you don’t have to lose this potential customer! There’s a way you can remind them of the item they left in their abandoned cart and help them complete the desired purchase - Facebook Dynamic Product Ads (DPA).

This is a wonderful tool for both retargeting and acquisition, which you just can’t overlook. And in this article, I’m going to tell you all about it.

What are Dynamic Product Ads?

Dynamic Product Ads (also known as Facebook shopping ads or catalog ads) let you retarget people who visited your online store and viewed your products but haven’t completed the purchase. These warm audiences are one of the lowest-hanging fruits you can possibly imagine, and all you need to do is give them a little push that will make them convert.

This is exactly what Facebook Dynamic Ads allow you to do. These are ad templates you can create and use for each of your products. This way, you can target your store visitors with the exact product they viewed and remind them to complete the purchase.

Instead of creating tens or hundreds of individual product ads, you can create a single template and use DPAs to automatically show tailor-made ads to your target audience, containing specific products from your data feed.

Facebook Dynamic Product Ads
Source: Newsfeed.org

How does this work exactly? Dynamic Product Ads leverage your Facebook pixel data (or Facebook SDK for mobile apps) to track the actions of your website visitors and retarget these people on Facebook and Instagram. This is what makes Facebook product ads so precise and efficient for advertisers, and especially for eCommerce businesses.

Why are Dynamic Product Ads a game-changer?

Dynamic Product Ads let you show specific products to the hottest audiences at the right time, which makes them obviously a super-effective solution that drives exceptionally high ROAS and increases clicks and conversions.

great audience meme

For example, Target, the American retail giant, has seen a 20% increase in conversions when utilizing Dynamic Ads, while Shutterfly, the American photography company, has experienced an increase of more than 20% in CTR.

As I already mentioned, Facebook catalog ads help you target very high-intent audiences - people who viewed specific products and even added them to their cart in your store. This way, you can easily drive conversions from potential buyers that are already interested in making a purchase.

Moreover, using a single ad template, you can create tens and hundreds of tailored ads showing your products to people who took action in your store across Facebook, Instagram, and Facebook’s Audience Network.

These kinds of ads have clear advantages you just can’t ignore:

  • Tailoring content to specific people
  • Using a single template instead of creating multiple individual ads
  • Promoting special offers and cross-selling
  • Targeting warm audiences
  • Recovering sales almost lost at the last moment

Prospecting with Dynamic Ads for broad audiences

On top of all that, you can also use DPAs to target broad audiences in your acquisition prospecting ad campaigns.

Surprising, right? But it actually makes sense, as Facebook has a ton of data on user behaviors and interests, which can be used to target potential customers who still haven’t heard about your brand but can be interested in a certain product or a line of products you offer.

Setting up Dynamic Ads for broad targeting will help you extend your reach and expand your customer base. In this case, Facebook will target people based on their interest in similar products to yours, similar brands, ads, etc.

These audiences have an obvious potential to become your customers, and Facebook’s algorithm can help you optimize these campaigns to achieve higher conversion rates.

Things to do before you launch your first Dynamic Ad

Now that you know all the great benefits of Facebook’s Dynamic Product Ads, you’re probably eager to get going with your first Dynamic Ads campaign.

Hence, I’ll walk you through the three steps you need to take before you can launch DPAs. If you’ve already taken some of these actions, feel free to use the menu to your left to skip to the next section.

#1 Install the Facebook pixel on your website

The Facebook pixel is a powerful tracking tool that monitors user activity on your website. It is a must-have tool for every Facebook marketer, and it is currently implemented in almost 4 million websites around the world.

It has undeniable benefits in many important areas, such as audience creation, performance measurement, and ad optimization. Therefore, you should install the pixel on your website even if you don’t use Dynamic Ads.

In order to create a Facebook pixel, you need to have a Facebook Business Manager account and a Facebook business page. The first stage would be creating a Facebook pixel, and you can find a step-by-step guide explaining how to do it right here. Then, you simply need to install it on your website, which can be done manually or using a plugin.

If you’re using one of the main platforms, such as Shopify, WooCommerce, or Magento, you can use one of the ready-made plugins, which make this process much more simple.

Partner integrations - eCommerce platforms

Next, you’d want to set up the events you wish to track. Again, if you’re using one of the above-mentioned eCommerce platforms, using the plugin will help you set up the standard pixel events very easily.

There are three kinds of events you should set up to run Dynamic Ads:

  • View Content: Captures visitor activity when they visit store pages like product pages.
  • Add To Cart: Next step - tracking data of visitors adding products to their shopping carts.
  • Purchase: Bottom of the funnel - when customers complete the checkout process with a purchase.

Tracking these events will allow you to target people who viewed a product or added it to their cart but didn’t complete the purchase, for example. Other interesting events to track will be Add Payment Info and Initiate Checkout, for instance.

Now that we’ve covered the tracking part, let’s feed Facebook with some data about your products.

#2 Create your Product Catalog

The Product Catalog creation process starts with your product feed. This is a list of all the products in your inventory, which needs to be sent to Facebook.

There are two ways to provide Facebook with your product list - manually or using a plugin. You can either create a CSV/TSV/XML file containing all the necessary information and upload it to Facebook, or use a plugin that will automate the process for you, such as Flexify for Shopify users. If you choose to do it manually, follow Facebook’s specifications.

To create the Product Catalog, follow these steps:

1. In the Facebook Business Manager, click on Business Tools, and scroll down to Catalog Manager.

2. Next, click on “Create Catalog” and select the right type for your business.

Create a product catalog

3. Then, you’d need to name your new catalog and select your upload method - manual or using your eCommerce platform. Plugins are available for Shopify, BigCommerce, Magento, OpenCart, and WooCommerce.

Feed your product list into Facebook

4. Click “Create” and we can move on to setting up your product sets.

#3 Segment the products into product sets

If you have a huge collection of products, and even if not, it may be very useful to divide your products into different sets.

This feature is mainly helpful when targeting broad audiences for acquisition. For example, you can create specific sets containing your top products for up- or cross-selling to increase your revenue. In addition, you can use different sets for various product lines or for special sales, such as Black Friday/Cyber Monday offers.

Let’s go step-by-step through the process of creating a product set.

1. Go to the Catalog Manager and select “Sets” from the left-side menu.

Create product sets

2. Then, click “Create Set”, and select whether you want to use filters or manually select items.

3. Next, name your new product set. You can segment your products based on category, type, brand, price, and more.

Segment your products

4. Click “Create” and let’s get down to business and create your first Dynamic Ad campaign.

How to create Facebook Dynamic Ads

1. Go to the Facebook Ads Manager and in the Campaign tab, click the green “Create” button.

Create a facebook ad campaign

2. Select your campaign objective. In the past, you could only select “Catalog sales” at this stage, but I recommend using Conversions, since it lets you boost your campaign with additional elements, such as video ads. Give your campaign an indicative name and click “Continue”.

Select Conversions as campaign objective

3. The next step will be choosing your target audience. You can either use an existing audience or create a new one. You need to decide whether to retarget your store visitors or launch a broad prospecting audience.

4. Afterward, you’re going to select your conversion optimization event - View Content, Add To Cart, or Purchase - and set up your desired budget and bid strategy.

Select target audience and conversion event

5. Then, you can select between Single Image, Carousel, and Collection formats. Carousel Ads are more commonly used for Dynamic Ads. But if you’re using landscape images, a Single Image format is worth considering. In a Carousel format, you can add an attractive video as the opening card and a CTA with your company’s profile on the last card. Collection Ads appear only on mobile and provide the user with a full-screen experience showcasing several products at the same time.

6. Select your product catalog and your specific product set, in case you want to use one.

Facebook Dynamic Ads creation - Select ad format and product catalog

7. When composing the ad, the images will be pulled automatically from your catalog into the template you’re creating. Write the headline, the ad text, and your link description. Lastly, add the dynamic placeholders you need: brand, product name, description, price, etc.

Facebook Dynamic Ads creation - Add dynamic placeholders

8. Additionally, you can add dynamic overlays to the product images themselves. These will also be automatically pulled from your catalog: price, percentage off, free delivery, etc. You can position these overlays, select their color, and more. Moreover, at this stage, you can add a frame to your images, announcing a special offer, for example.

Facebook Dynamic Ads creation - Add dynamic overlays

9. And that’s it, your first Dynamic Product Ad is ready!

How to optimize your Dynamic Product Ads

1. Separate between viewers and people who added to cart

There’s obviously a difference between someone who just viewed a product and someone who actually added it to their cart, right?

People who added the product to their cart are further down the funnel and might need less convincing. They could just use a little push, such as offering them a discount on the product, in order to complete the purchase.

However, product viewers might need more information or product reviews in order to actually buy the product.

This is why I recommend separating these two audiences using the custom combination option for audience targeting.

2. Focus on fresh audiences

Retargeting your store visitors is mostly relevant up to 30 days after they viewed your product. You don’t want to waste your budget on people who are no longer interested in your products, right?

If they visited your store more than a month ago, they might have already bought what they needed in another shop, or maybe they no longer need it. So, you better focus on “fresh” audiences, especially when it comes to Dynamic Product Ads.

3. Show related products too

When you retarget your store visitors, don’t only show them the same product they viewed. If you do, you might be missing out on the opportunity to promote related products they might be interested in.

Maybe they decided the product they viewed wasn’t the best fit for them. Or maybe it’s not relevant anymore (see the previous section). Therefore, it’s always good to consider showing them related products. It’ll also help you diversify the ads they see and prevent audience fatigue (see the following section).

This tactic can also be used for cross-selling to customers who already made a purchase, of course.

4. Use frequency capping

Even if you’re running a very profitable advertising campaign, once your audience sees the same ads over and over again, they might become annoying, and then, you’ll experience audience fatigue. This will cause your CPM and CPC to rise and will also result in a decrease in CTR.

To avoid all that, you should use frequency capping to limit the average number of times your audience sees your ads. You can select your desired frequency for the campaign and Facebook will make sure your audience doesn’t get tired of your ads.

Alternatively, you can monitor the frequency yourself. To keep it under control, consider experimenting with a bigger time window, such as 7, 14, or even 21 days.

5. Utilize Slideshow Dynamic Ads

This interactive and engaging ad format allows you to display your products from different angles without the audience needing to click on anything.

To do so, you’ll need to include a few different images of the same product in your feed. Then, select the option “Show a slideshow when available” under “Catalog Assets”.

6. Write to the point

Even though Dynamic Product ads focus more on the visual, your ad copy should still support your images and be converting.

Therefore, you should focus on your single CTA - Shop Now. Your ad copy should be concise and play to your strengths: if you’re offering an attractive price, include it in the ad; if your offer is limited, add a sense of urgency to it.

Note: Since Facebook catalog ads are Dynamic, which means you’re going to show different images to different people, you need to make sure your ad copy fits different products.

7. Analyze and improve

Monitor your Product Ad performance and test different audience segments, placements, formats, products, and ad copy.

That’s the only way to know what works best and for which audience. It’s true for every kind of Facebook ad you’ll ever launch.

At Madgicx, we use our platform’s advanced filtering capabilities to track our results across audience segments, platforms, placements, and more, and optimize ads (including Facebook product ads) based on the insights we derive from this data.

Madgicx's Smart Filters

Wrapping up

As you can see, Facebook Dynamic Ads are a complete game-changer for eCommerce businesses. They target the most profitable and “warmest” audiences with highly-personalized ads, and all that with very little effort required.

Now you know how to set up your product catalog and launch a Dynamic Ad campaign. I’ve also given you some tips and tricks that can help you make the most out of your ads.

Hence, you’re now all set to boost your sales and conversion rate with this wonderful advertising solution - Facebook Dynamic Product Ads.

Good luck, and stay dynamic!

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Ad Creatives
Oct 20, 2021
Dec 13, 2020
Yuval Yaary

Yuval is the head of Content Marketing at Madgicx. He is in charge of the Madgicx blog, the company's SEO strategy, and all its written marketing materials.

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