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Facebook encourages visits to physical retailers through customizable ads to local inventory

Facebook encourages visits to physical retailers through customizable ads to local inventory
Macy's is one of the first retailers to test Facebook's dynamic ads for retail. (WWD)

The world of digital advertising might be "mobile first," but it's increasingly setting its sights on the physical realm.This week, Facebook introduces a new mobile ad capability that aims to encourage in-store traffic and purchases — while also courting bricks-and-mortar advertisers. The product is called dynamic ads for retail, and it means Facebook users will see ads that feature products that are currently available in the store closest to them.

Ads can be customized for every store location based on factors such as product availability, pricing or promotions. Ads are linked to a local product catalog, meaning that if a product sells out in one specific location, the ad will automatically adjust so that it is no longer shown to Facebook users in that geographic region.

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These tool sets solve the disconnect between online marketing and in-store traffic, said digital marketing consultant Rebecca Lieb. In addition to increasing competition with Google, this also adds competition to local metropolitan newspapers, she said.

In addition to local availability, the dynamic retail ads can offer information such as product summaries, the ability to contact the nearest store or buy online and similar products that are also available at a nearby store. Abercrombie & Fitch, Argos, Macy's, Pottery Barn and Target are among the first to test this feature, which will gradually become more available during the next few weeks.

In a Facebook blog post sharing the news, Macy's Serena Potter, who is group vice president of digital media strategy, said that these ads bridge Macy's "online and offline channels to deliver a more engaging, relevant and useful experience to shoppers."

Abercrombie & Fitch's Billy May, who is senior vice president of marketing, said that "Facebook is helping us build a solid foundation to understand the impact digital marketing has on store traffic and sales by taking the results and tying them back to our customers, who were not only exposed to dynamic ad for retail campaign, but took further action and crossed our lease line."

Additionally, Facebook is introducing what it's calling a "store visits objective," which targets people more likely to visit stores. It uses improved geo-targeting and introduces store visits as a primary reporting metric and method for optimizing ads.

These updates are the continuation of an ongoing strategy to connect to offline marketers and to drive physical store traffic, said eMarketer analyst Yory Wurmser.

"It definitely makes a lot of sense for Facebook; dynamic ads have been performing really well for them," Wurmser said. He added that they are hitting the "same general area" as Google's product listing ads, and bring Facebook closer to offering a full product spectrum for advertisers. The additions, he said, will be particularly attractive to larger retailers with integrated retail management systems that can manage inventory information in real-time.

In May, Google added a handful of updates that are designed to facilitate the interaction between mobile shoppers and physical retailers. Google Shopping vice president of product management Jonathan Alferness even called mobile phones the "remote control" of the physical retail store.

Google's offerings now include shopping ads on image searchLocal Inventory Ads and a store pickup link to an advertiser's Google product page.

For now, Facebook and Google are focusing on the mobile, rather than desktop, browsing experience. Alferness said that he anticipates that Google's updates will also come to desktop browsers.

"The big challenge is helping retailers understand how mobile is shaping the way we shop. It continues to impact the retail landscape whether you're a retailer or a consumer, and these updates help retailers 'lean in' to mobile shopping."

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