Facebook Dynamic Ads Get A Facelift With Interest-Based Targeting Feature

Facebook updated Dynamic Ads on Tuesday, allowing advertisers to target potential customers based on their interests and intent rather than just the specific products they’ve browsed.

“We observe demographics and patterns of activity that indicate a person is really interested in a product category or a specific product and then we extrapolate from that information to find more people like that,” said Gabriel Francis, direct-response product marketing lead at Facebook.

In other words, it’s lookalike targeting for direct response. And advertisers have been asking for it, said Maz Sharafi, Facebook’s director of product marketing.

“The No. 1 piece of feedback we’ve heard from marketers is that they want to be able to find people with intent for their product beyond remarketing to website and app visitors,” Sharafi said.

Dynamic Ads is a two-year-old product that places retargeting ads in the news feed, based on what consumers looked at on a marketer’s website or app.

The update combines browsing behavior with factors such as likes, clicks and demographic info. (Facebook declined to elaborate on which other signals go into the mix.) From there Facebook can find more users who have demonstrated a similar potential.

“All of that information is factored into what we call our optimization engine, which helps us determine which ads to show to which people,” Sharafi said.

It makes sense that Facebook is tinkering with and improving its existing ad products to juice performance, since its ad load is maxing out and ad revenue growth rates will start to slow by the middle of 2017.

Facebook is also developing new ad products and placements. On Monday, Facebook expanded its test of mid-roll video ads beyond Facebook Live, and Instagram reportedly is testing the format as well.

But Sharafi said ad load issues are separate from ad product innovation.

“We’ve more or less always been focused on a news feed strategy, and not just in direct response,” he said. “We listen to feedback and iterate on existing products and also introduce new products. You’ll continue to see both happen as we’ve always done.”

Facebook is testing interest-based targeting for Dynamic Ads with a small number ecommerce and retailer advertisers in North America first, including Wayfair. According to Facebook, the online furniture retailer was able to beat its customer acquisition targets by 20% using the expanded Dynamic Ads product.

In the coming months, the new targeting capability will be rolled out to advertisers in other geographic regions and industries beyond retail and ecommerce.

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