What are Dynamic Product Ads (DPAs) and how do they work?

Dynamic Product Ads are a specific type of retargeting ad on Facebook. Here’s how Facebook defines them:

Dynamic ads look exactly like other single image ads or ads created in the carousel format on Facebook, Instagram and Audience Network. However, instead of individually creating an ad for each of your products, you create an ad template that automatically uses images and details from your data feed [catalog] for things you'd like to advertise.

So each user gets to see an ad tailored specifically for them. The products filled into the ad template are based on the user’s behavior on the store website. Advanced AI techniques predict what the user is likely to purchase and showcase these products in the ad.

For instance, let’s say a user has viewed a Baby Pink Summer Dress and a Pretty in Pink Pocket Dress on your website. When this user next logs in to Facebook, she will be shown a dynamic ad with these products as well as a few additional products that Facebook thinks she will be interested in purchasing - for example, a Yellow Dress Coat, a Green Love Tee and a Powder Blue Play Shirt.

These additional products are selected using data from this user's behavior across multiple sites, advanced artificial intelligence and Facebook’s secret sauce. The data for all of this is collected using the FB Pixel.

As a seller, once you’ve set up the ad template, uploaded a catalog and set up the pixel, your DPAs will continue to run and provide the best ROI across all forms of digital ads. You won’t need to create multiple ads and constantly tweak your campaigns.

Check out the slideshow below to learn more about how Dynamic Product Ads work using the pixel and catalog:

Are Dynamic Product Ads a must for e-commerce sellers?

If you want to show the right product to the right buyer at the right time, then DPAs need to be an integral part of your ads strategy. These ads:

1. Have the highest ROI: DPAs have a lower cost per click and a higher click-through rate than other ads. The average ROI of DPAs is 8-12x with some brands reporting an ROI of over 20x through these ads.
2. Are easy to scale: DPAs make it possible to advertise hundreds of products with just one campaign. You don’t need to select products or create separate campaigns each time.
3. Display correct information: One of the biggest problems of running product ads is updating product information. Products may be sold out or on sale. OrangeTwig constantly updates your catalog to ensure that the latest information is uploaded to Facebook and displayed in your ads.  
4. Showcase only relevant products: For your ads to convert, you have to stand out in your buyers’ feed. This is getting increasingly difficult because of the number of ads buyers see everyday. DPAs have a higher click-through rate because they show buyers products that they have already viewed or engaged with.
5. Save time: DPAs are a one time set-up. You don’t need to update product count, details or create multiple campaigns to advertise different products.

Not convinced yet? Here’s what the experts have to say:

eBay

eBay customers want to shop at the moment of inspiration, and dynamic product ads are a valuable way to connect them with a more personalized and relevant selection of items as they use Facebook. Dynamic product ads give eBay a new way to match customers’ interests with the right items from our nearly 800 million listings—on any device they use. We are encouraged by early tests, in which we’ve seen dynamic product ads drive incremental traffic and conversions.

- Jody Ford, Vice President of Global Growth, eBay

Puravida bracelets, Shopify seller

Broad audience targeting with dynamic ads is a great addition to Facebook’s already-impressive targeting arsenal. It drives lower cost per impression, lower cost per click and greater breadth in sales of unique products. Also, the dynamic creative solves for ad fatigue and the open targeting means audience saturation isn’t a problem—both save the advertiser time and money!

- Deirdre Kelly, (Paid Social Account Manager, Sum Digital)

So what are you waiting for?

‍Install the FB pixel, create a product catalog and start advertising the profitable way.

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