Facebook Collections to increase sales for brands

Facebook making a foray into e-commerce with a new video ad format where users can immediately buy a product after seeing it. The ad combines the allure of TV commercials and the convenience of e-commerce in one Facebook post. The feature is called Collections, which looks like a combination of their other ad formats Canvas and Carousel.

 

What’s different about this video ad?

The video ad is integrated with multiple product images that users can click on, leading them to the brand’s catalog site to browse other products or complete their purchase. Brands can choose which products to showcase or Facebook can use an algorithm to line up products that are the most popular.

Facebook announced on its blog that 75% of consumers say that videos can influence their purchasing decisions, so it doesn’t come as a surprise that they’ve made a move to combine the two.

The social media giant sees this as an opportunity to give marketers a chance to highlight the products they want to sell, while pushing consumers to act on an impression immediately.

 

Brand collaboration with Collections

Facebook has been working with Adidas, Tommy Hilfiger, Sport Chek, Michael Kors, Lowe’s and other brands to test their new ad format.

 

Michael Kors is one of the brands testing out Facebook Collections

 

Adidas reported that their campaign for several pieces of clothing churned out a decrease of up to 1.8% in ad spend based on cost-per-conversion due to the return on investment they received from their Collections ad. Sport Chek ran their own campaign during the holiday season and experienced a 28% uptake on sales.

In addition to Collections, Facebook added a new feature called Outbound Clicks, a new metric that will tell marketers how many people clicked on the images to consider a purchase.

While Facebook charges more for ads that pull people out of Facebook, this is the first time they are offering a metric that allows marketers to isolate their ad analytics on Facebook and streamline the results of their campaigns.

 

Sport Chek saw a 28% increase in online sales using Facebook Collections compared to their previous ad campaign

 

The Outbound Clicks feature will record how many times a person visited the interstitial site and clicked on the brand’s direct site link. The interstitial site counts as an Outbound Click, since the site is designed and curated by the brand themselves. At present, people still cannot buy the products directly on Facebook.

They are also integrating the Outbound Clicks feature into Instagram. Clicking on an ad that leads to a Facebook Page of website is considered an outbound click.

 

What is behind the outbound links metric?

Even with the repackaging, an outbound click is considered a Cost Per Action/Conversion (CPA/CPC). This is by far the most expensive ad format on Facebook because it charges people for actions they take, such as clicking an outbound link, downloading an app, or getting likes.

When a marketer places an ad for impressions, they save more when their ad reaches peak relevance. Therefore, businesses on a budget rely on this paid metric. However, doing so limits the brand from converting customers. Impression-based ads are distributed throughout a wide range of people, while action-based ads are repeatedly shown to the same users until they convert.

When considering Cost for Impression (CPI), marketers can also pay for that with the new Collections Ad every time someone looks at the video.

Our question is, will ads focus on impressions for Collections because it’s cheaper? Or will Facebook still charge for outbound clicks even if the goal of the company is impressions? Either way, Collections was never designed for that.

Its true goal is to increase sales for both Facebook and marketers using conversions, while allowing both parties to optimize their sites and platforms for collaborative purposes. The Outbound Link feature is just an add-on that supports the conversion-based ad so that marketers can see where their money is going.

 

 

Why the huge focus on ads?

Online advertising is the biggest revenue stream for almost all social media platforms. While more people are using mobile devices to check social, marketers are adapting their campaigns to serve these viewers more.

Facebook’s new ad feature seems to be the answer to brands’ prayers, since it combines the most popular type of media advertising and the most efficient form of purchasing.

Since the last leg of 2016 up to the beginning of 2017, social media giants have been vying for the place of top video provider on the internet. Facebook seems to have managed to bring themselves a new area of business with Collections.

 

Facebook

Adidas

Tommy Hilfiger

Sport Chek

Michael Kors

Lowe's