Because they’re starting to really take off.
In fact, the growth in product-focused dynamic ads (originally called Dynamic Product Ads) is believed to be one of the factors that helped spend on social ads jump 86% year-on-year in Q1 2016 according to Kenshoo data (see chart).
And dynamic ads, coupled with growing Instagram advertising, helped push social spend in Q1 2016 higher than Q4 2015, going against the grain of typical seasonal spend patterns.
So what is behind the increasing interest in this ad format?
Here are three important things you should know about dynamic ads.
1. They were designed to make advertising easier for retailers who have a large product inventory
Dynamic ads were introduced in early 2015 to give retailers an effective, automated way to promote large numbers of products on Facebook.
To use this ad format, advertisers have to connect their online product feed to their Facebook ad accounts.
This allows Facebook to dynamically generate ads for individual products and show them to relevant audiences.
Product IDs, names, descriptions, landing page and image info is automatically pulled from the feed to build the ads, hence the ‘dynamic’ in the name.
Dynamic ads can support thousands of products and as long as your feed is up to date, any items that are out-of-stock will never be shown.
You can choose to display a single product image or video per ad, or showcase a carousel of up to ten products within a single ad unit.
You might use the carousel format to show a pair of shoes in several colours for example, or a selection of jeans in a specific price range.
Typically we’ve found that between three and five related products in a carousel produces the best results.
To date, more than 2.5bn unique products have been uploaded to the dynamic ads for Facebook format.
And as of April 2016 dynamic ads have also become available to advertisers on Instagram.
2. Retargeting and personalisation are a key part of their success
You can target dynamic ads at people’s interests, likes or demographic profile, as well as to custom audiences extracted from your customer database or email lists.
And what’s been really effective, is retailers using this ad format to retarget those who have visited their website or app.
Facebook provides a custom audiences pixel which tracks the product pages a visitor has viewed, which products they’ve added to shopping baskets and what they’ve purchased.
This allows advertisers to show people personalised ads based on their behaviour and interaction with their products online.
So a retailer can, for example, target someone who’s looked at a specific product page and show them ads displaying different versions of the same or related products or offer incentives to help them convert.
This kind of intent-based retargeting makes ads less intrusive.
And is one of the reasons why we’ve seen clients generating click-through rates of 1.7% in Q1 of 2016, outperforming the overall social average of 1.0%.
Facebook recognises the value of personalised behavioural targeting and has added new options to retarget based on stronger intent signals – such as when a visitor has gone to the same page a number of times or spent a certain amount of time there.
You can also retarget based on the value of their last purchase.
3. They’re now available to travel advertisers
Facebook now believes that dynamic ads can appeal to more than just product advertisers.
So in the first instance it has started making them available to travel advertisers to run more personalised retargeted ads.
Initially a select number of travel advertisers are able to retarget hotel ads to online visitors who have browsed hotels or bought flights from their sites.
The ads can be dynamically updated with hotel availability and pricing for the booking window and the location someone has shown an interest in, for example.
Looking ahead you can quite clearly imagine other travel services that could be advertised in this way aligned to purchase intent.
For example car rental ads could be retargeted based on time and location that someone has browsed.
And it would not be a big leap to envisage this type of dynamically retargeted ad working for other verticals besides travel.
The danger with any kind of advertising is that it can seem invasive and an unwelcome interruption.
Dynamic ads are showing that it’s possible to sidestep this with high performing automated social campaigns that make ads meaningful and relevant to the audience.
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