Shutterfly.com and Target are early users of product ads. Target saw a 20% increase in conversions compared to other formats on Facebook.
Product ads come in two flavors. The first allows retailers to show different types of ad creative to different audience targets. To perform this, marketers must upload multiple creative assets to Power Editor (Facebook's ad-editing tool).
The second type of product ad is more dynamic, as ad creative changes based on how Facebook users have interacted with an ecommerce site or app as well as product-level data around pricing and product availability. For instance, different creative might show depending on whether a consumer placed a product in her shopping cart or simply viewed it.
To leverage this type of unit, marketers can upload a product catalog to Facebook Business Manager and add a Custom Audience pixel to the company website.
Berke said the ability to onboard a product list and dynamically serve ads can be a tough technical challenge. After all, there's always the risk of displaying the wrong price for a product or showcasing something unavailable.
"There are all sorts of foundational pieces [like] recommendation logic that you have to get right," he said. "[Facebook] is prioritizing higher-quality ads like dynamic product ads that are more relevant to users and they're able to generate more revenue by showing fewer ads that are personalized."