For merchants that sell to their customers offline, assessing the efficacy of Facebook ad campaigns can be challenging.

This is because establishing a direct link between those campaigns and offline sales is often a guessing game, particularly for small, local businesses.

But savvy merchants will soon be able to change that thanks to Facebook's Offline Conversions API.

As the name suggests, the Offline Conversions API gives merchants advertising on Facebook the ability to track how their Facebook campaigns drive offline action.

It functions similarly to Google's offline conversion tracking:

  • Merchants configure their ad accounts for offline conversion tracking.
  • Offline conversion events data is sent to Facebook via API.
  • Facebook identifies offline conversion events that are associated with Facebook users who viewed the merchants ads.

Getting attribution right

Of course, correlation isn't causation.

Merchants may be running campaigns through many networks, so the fact that someone viewed a merchant's Facebook ad does not necessarily mean that the ad was responsible, directly or indirectly, for an offline action like a sale. 

To make attribution a bit more exact, advertisers will need to establish a methodology for analyzing offline conversions data, which can then be applied using Facebook's Ads Insights API.

That API allows Facebook advertisers to retrieve statistics about their ads.

By combining the API's Breakdowns and Breakdown Actions functionality, it's possible for merchants to do deep analysis of customers who viewed their Facebook ads and completed a specific offline action.

For example, Argentine retailer Frávega was "able to show that for every dollar of ecommerce revenue we were generating from Facebook ads, we were actually getting an additional $2.20 in our brick-and-mortar stores.

"With the Offline Conversions API we were able to optimize our investment and increase spending with confidence," according to Frávega digital marketing manager Mariano Tordo.

The importance of first-party data

As one might expect, Facebook's new Offline Conversions API can't perform miracles.

To function, merchants must be in a position to supply Facebook with customer information it can use to match offline events to its users.

This includes usual suspects like email address, phone number, first and last name, but Facebook will also accept information like date of birth, gender and ZIP code, which can help pinpoint users more accurately.

This highlights the growing importance of first-party data to merchants.

Obviously, it is in many cases easier for merchants selling online to collect the personally identifiable information that Facebook needs, but given the challenges brick and mortar merchants face in measuring the influence of online ad campaigns on offline sales, it behooves merchants to develop strategies to collect and store more information about their customers.

There are a number of techniques commonly used to do this, such as loyalty schemes.

Third-party integrations make Facebook's API instantly accessible

In an effort to make the Offline Conversions API more accessible to companies that may lack the technical resources required to integrate with it, Facebook has created partnerships with companies that are already working with merchants of all shapes and sizes.

For example, one of those partners is Acxiom-owned data connectivity platform LiveRamp.

Thanks to its integration with the Offline Conversions API, LiveRamp clients can take advantage of Facebook's new functionality without building an integration of their own. That was a no-brainer for the company.

"By connecting campaign exposure data to offline sales transactions, marketers can understand which campaign strategies are truly generating real business returns,” Travis May, LiveRamp's president and GM, stated in a press release.

“This insight is key to optimizing campaign performance and justifying higher digital marketing budgets."

Other companies that offer solutions now supporting the Offline Conversions API include IBM, Marketo, Square and Invoca, so many businesses will find that they are in a position to put Facebook's offering to work with minimal effort.

For more on Facebook Ads, download Econsultancy’s new Social Media Best Practice Guide 2016.

Patricio Robles

Published 21 June, 2016 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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