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You need a catalog to create any kind of dynamic ad on Facebook or Instagram.
Dynamic ads automatically change the products that are displayed for each viewer, based on purchase and browsing history. For this, Facebook needs up-to-date information about all the products in your store. This is achieved through the product catalog or product feed (a list of your products with which contains all relevant information like image, price or availability).
Types of dynamic ads that you can create with a catalog are:
These ads show viewers the same products that they have viewed on your site, along with other relevant products. Since your potential buyer has already shown interest in these products, DPAs tend to have the highest conversion rates.
These are shown to ‘cold’ or new audiences. Facebook decides which products to show each viewer based on the click-through rate of each product and the past behavior of the potential buyer.
TIP: A catalog with learnings can also be used for a prospecting campaign. Such a campaign is usually known as a dynamic ad for broad audiences (DABA) and is used at the top of the funnel to let Facebook use its own learnings to optimize delivery.