Free Guide on Facebook Dynamic Product Ads for Ecommerce

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Facebook dynamic product ads have revolutionized the way remarketing campaigns are done online, outperforming other retargeting platforms by yielding better results and conversions. It allows businesses to automatically generate ads based on their product catalogs and display specific product ads based on past user activity, such as views and add to carts.

Aside from the automation and the smart targeting of the ads, this type of Facebook targeted advertising also helps ecommerce stores build stronger brand awareness by using lookalike audiences to find more people who are more or less interested in their products.

Ecommerce marketing has since been transformed with this Facebook remarketing feature. To start reaping what this can offer your business, it is essential to set it up properly on your account. In this article, we will discuss each step in detail plus the opportunities, along with case studies, and challenges of using Facebook dynamic product ads.

Requirements for Set Up

To set up your Facebook dynamic product ad, the following must be set in order first:

● Sign up for a Facebook Business Manager account
● Create a Product Catalog and Product Feed
● Get a Facebook Conversion Pixel

Facebook Business Manager

The Facebook Business Manager is an account that you can create for free. As a business administrator, you can manage all users, ad accounts, and Pages in one place. You can also control the information your employees can only access.

To create an account, go to Facebook for Business and accomplish the two-step process. You will need a personal Facebook account to confirm your identity and an ad account to move to Facebook Business Manager.

Once you are done, you will be led to your account page, which will look like this:

facebook business manager

Make sure that upon the creation of your Business Manager account, you already have a hosted product catalog online and you have downloaded the Pixel Helper Chrome Extension as preparation for the succeeding requirements.

Product Catalog and Product Feed

To create your product catalog and product feed, you need to have admin access on Business Manager.

A product catalog holds a file that has the list of all the products you want to advertise. This file is called a product feed.

Every line in a product catalog must contain a product ID, title, link, description, product category, plus some more required product attributes:

facebook product catalog

To set up product catalog, go to ‘Business Settings’ and choose ‘Product Catalogs’ from the list.

On the product catalogs page, click on ‘Add New Product Catalog’ and then choose ‘Create a New Product Catalog. Provide details for the ‘Product Catalog Name’ field then click ‘Create Product Catalog’.

product catalog

With the product catalog created, you can now use its corresponding ID to build your product feed. Again, this is the set of catalog items that will be uploaded and displayed using your creative ad template. Product feeds can show a single product or multiple products to represent the different SKUs in your product catalog.

To set it up, click on ‘Add Product Feed’ on your product catalog page.

add product feed

Two options will appear – ‘Auto-Upload with URL’ (dynamic product feed on your site) and ‘Upload file Manually’ (importing a CSV file). The advantage of selecting ‘Auto-Upload with URL’ or the dynamic product feed is your stock is connected. This ensures that you won’t be running ads for products that are currently out-of-stock and it automatically adds new products as your product catalog grows.

product catalog on facebook

After selecting ‘Auto-Upload with URL’, fill out the fields for the ‘Feed Name’ and ‘Feed URL’.

Select the ‘Upload Frequency’. Your product catalog will be automatically kept up-to-date depending on the upload frequency (daily, weekly, and monthly) you choose. Once you’re done, click on ‘Schedule Upload’.

product feed facebook

The product feed will be processed immediately and depending on the file size, it can take from several minutes to an hour to complete.

You will receive a notification once the processing is done. Double check your feed for any possible errors before moving on to the next requirement – setting up your Facebook Conversion Pixel.

Facebook Conversion Pixel

To display your dynamic product ads to people who visited your website, you need to set up a Facebook Conversion Pixel on the header of your site.

facebook conversion pixel

Within the Power Editor on your Business Manager account, go to ‘Tools’ and select ‘Pixels’ on the dropdown list.

You will then be brought to your Facebook Ads Manager page. You then need to go to ‘Actions’ and select ‘View Pixel Code’. Copy your pixel code and start adding it to all the pages of your website.

view pixel code facebook

On the other hand, to properly display dynamic product ads on mobile devices, you need to have a Facebook App ID in order to use the Facebook SDK. Facebook SDK is a way to track the success of your mobile app and it is available for iOS and Android. Reference this Facebook SDK for App Ads guide on how to install it.

Setting Up Facebook Dynamic Product Ads

Now that you have covered the three requirements – the Facebook Business Manager, Product Catalog and Feed, and Facebook Conversion Pixel – you can now finally set up your Facebook Dynamic Product Ads.

Dynamic product ads are very similar with other Facebook ads that appear either on the newsfeed or on the right hand column of a Facebook page. The only difference is instead of individually creating ads for each of the products in your catalog, Facebook dynamic product ads use a creative ad template for all the images and product details coming from your product feed, helping you scale your ad creation requirements.

To create your dynamic ad template, go to Power Editor and click on the ‘Create Campaign’ button.

setting up facebook dynamic product ads

Enter in a Facebook campaign name and select ‘Product Catalog Sales’ as the objective’. Click ‘Create’ after.

Next, you need to create an Ad Set. Provide a name for it and then click ‘Create’. Inside your Ad Set, you need to make a Product Set.

In a product set, it is up to you whether you want to advertise all the products contained in your product catalog or just a few specific ones. If you are going for the latter, ensure that the filter matches the column names and products from your product catalog.

facebook dynamic product ads set up

Once you are done, click on ‘Create’.

The next step is to select the audience and the targeting window where you plan to show your ads.

You can configure your targeting window to people who viewed your product or specifically to people who added products in their shopping carts. You can even add more inclusions and exclude behavior to make your display ads more relevant and targeted.

creating facebook dynamic product ad

You can also layer on additional audiences, such as Custom Audiences, by selecting ‘Edit Audience’.

We previously discussed how to set up Custom Audiences for Facebook remarketing. You can choose from different Custom Audiences like your website visitors, Facebook fans, email list, and lookalike audiences to identify or specify who to show your ads to. Do check our article for a step-by-step guide on how to set up each using Facebook Ads Manager.

Once you are done configuring your targeting window, you can now create your ad template.

There are two Facebook ad formats that you can choose from – an ad showing one product or an ad showing multiple products. If you intend to display multiple products in a carousel ad unit, keep in mind that the aspect ratio for that will be 1:1. On the other hand, one product ads use a 1:9:1:1 aspect ratio image.

Start crafting your ad copy. Use plain text with consideration to your keywords as these will be pulled from the product catalog you uploaded.

Make sure to do a preview your of your ads before publishing them by scrolling through the product reviews. These are randomly gathered from the product set.

facebook conversion tracking

It is very important to track the conversions of your ads on both desktop and mobile to see which ones are performing well and which ones are not. Make sure to select ‘Track all conversions from my Custom Audience pixel’ under ‘Conversion Tracking’.

Once you are done with the preview, upload your ads to publish and set them live.

Your Facebook dynamic product ads will start displaying as soon as people start browsing your products that match the rules that you have set.

examples facebook dynamic ads

Bonus tips

As a tool for remarketing, Facebook dynamic product ads provide a wealth of benefits. But there are two that stand out.

It automatically turns off out-of-stock products

Aside from displaying the right products to the right people, Facebook dynamic product ads also helps in managing the availability of your products.

Your product feed in your product catalog has a way of telling Facebook whether certain products are still in stock or not. By using dynamic product feeds, ads for products that are currently out of stock will no longer be displayed.

Facebook dynamic product ads scale as your product catalog grows. It is also very reliable in maximizing your ad spend by not displaying ads that will only send users to landing pages for products that they can no longer purchase. Even if the product is currently out of stock, Facebook dynamic product ads can still remarket to your customers by showing personalized similar offerings that are available.

Similarly when a purchase is made on your site, product ads are automatically turned off across all devices. This way, you won’t be showing Facebook ads of products that your shopper has already bought.

Introduces product catalogs to the digital age

A good number of businesses today rely on digital tools to streamline their processes, and if you happen to have an extensive and traditional product catalog to manage, Facebook dynamic product ads can give you more than just a helping hand.

More so if you are in the business of selling year-round products and seasonal items, Facebook dynamic product ads will help you keep up with your constant inventory changes and need for different messaging tailored to your seasonal offerings. No need to create a static array of ads while manually referencing your books. You only need to decide which of the two Facebook ad formats (single product or multiple products per ad) you want to use to get your dynamic product ads rolling.

Opportunities and Success that Await

Aside from big ecommerce sites with extensive product catalogs, this type of Facebook targeted advertising is also beneficial to small ecommerce businesses.

#1 Convert add-to-carts into actual purchases

Shopping carts get abandoned 69% of the time with reasons that may be out of any business owner’s control. But that does not mean forgoing a potential sale completely.

If someone abandons a cart filled with three grocery items, Facebook dynamic product ads can inspire that shopper to complete his or her purchase by showing exactly those three grocery items.

Oppa, a furniture and decor brand in Brazil used Facebook dynamic product ads to retarget customers who have previously shown interest in their products.

Using the conversion pixel, they retargeted their visitors with abandoned shopping carts with dynamic Facebook ads that featured the actual products they put in. They saw a 38% increase in revenue and 2x higher return on investment.

On a similar case, Sale Stock, a fashion ecommerce company in Indonesia created a Facebook campaign that combined dynamic product ads and Custom Audiences to retarget web visitors who did not complete their purchase with a personalized Facebook ad.

By reaching out to people who have already shown an interest towards their products, they were able to spend their ad budget efficiently while increasing sales 4X and lowering cost per acquisition 3X from April to June in 2015.

#2 Inspire discoveries of similar products in any category

If a potential shopper is on your site looking at a particular premium brand of printer, you can retarget them with a Facebook ad that displays other premium brands and models in that printer category. This can be a good opportunity for you to introduce brands that offer better prices or specs.

Similarly, you can retarget your customers who previously bought a printer, but did not purchase inks with an ad. The Facebook dynamic ad can show ink refills and cartridges specific to the brand and model they bought. Set it to display 60 days from purchase, which is most likely the number of days they will need an ink refill.

#3 Increase purchase frequency from happy customers

The beauty of Facebook dynamic product ads is it shows related products to people who have purchased an item, and not just to people who showed interest. If someone bought a hat from you, you can dynamically show an ad of scarves the next time they visit Facebook.

For Luxola, an online store of cosmetics and skincare products wanted to sell more to their existing customers while at the same time cutting their cost per acquisition in half.

To win back shoppers, they created a Facebook campaign that combined dynamic product ads with Custom Audiences from website. This allowed them to automatically promote relevant items from their extensive product catalog to past customers across desktop and mobile devices. They were able to achieve a 4X return on their Facebook ad spend and lower their cost per acquisition by 70%.

#4 Grow average order value through upselling

Ask Me Bazaar, an online shopping site in India, wanted to showcase their wide product range and increase their average order value from their existing customers. They were able to do this by combining Facebook dynamic product ads and website Custom Audiences to cross-sell and up-sell related products with a personalized ad.

In conjunction with other Facebook campaigns that they ran, such as video ads, photo ads, and link ads, Ask Me Bazaar experienced 10x growth in their daily sales transactions, bringing 6,000 more orders (on average) daily.

Challenges to Overcome

Although Facebook dynamic product ads may seem picture perfect as a remarketing tool, it also comes with several challenges.

The first challenge has to do with the way Facebook dynamic product ads were set up. To maximize your budget, make sure to retarget people that have already added products in their shopping carts. This group of people would appear to be more interested and engaged with your brand than people who were merely viewing your product pages. Make sure to set this up properly under ‘Audience’.

Another challenge is the consumer behavior shift from desktop to mobile. You need to make sure that your ecommerce site is well optimized on mobile so your potential customers can browse and navigate your site seamlessly. Ensure a good experience on mobile so you can display relevant dynamic Facebook ads to them.

Likewise, this calls on the importance of having a mobile app for your store. As previously discussed under Conversion Pixel, installing Facebook SDK on your mobile app will monitor activities for you, such as when it becomes active on new devices or when a purchase is made, helping you retarget potential customers with ads that are always relevant to them.

Conclusion

If you are considering your options for remarketing, Facebook dynamic product ads should be on your list.

Make sure that you have the four main requirements on hand – a Business Manager account, your product catalog, product feed, and conversion pixel and you are well on your way towards creating your Facebook dynamic product ads.

The steps to setting it up may be quite tedious, but nothing can make those conversions go up than properly creating it. If needed, enlist the help of your developers, especially when applying your conversion pixel on every page of your website and your mobile app. Also, take advantage of Custom Audiences to make your ads truly relevant to the people who are likely to convert.

Whether you are a startup ecommerce site or a business with an already extensive product catalog, this form of Facebook targeted advertising is a great fit for your remarketing needs, dynamically finding you engaged customers with the potential of buying from you repeatedly.

About the Author

John Komarek is the founder of Pixelter. He helped over 63 e-commerce businesses boost their mobile sales by up to 183.5%. He uses advanced UX research, A/B testing, and AI-driven personalization to deliver the results. Learn more about how he can help you grow your sales.

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