Why Facebook's new Product Ads will have a big impact on marketers – and could scare Google

There have been whispers of this announcement for a long time. As the online retail market booms, e-marketers have been hoping for a Facebook solution that would rival Google’s Shopping Ads (previously known as Product Listing Ads.)

The online retail market has been growing exponentially. Currently, Morgan Stanley pits online retail in excess of $1.5 trillion globally. Euromonitor predicts online retailing is set to generate a third of all new retail sales, with mobile accounting for 32 per cent of internet retailing sales.

With this market growth, e-marketers increasingly have a requirement for tools that will help them capture potential customer data in real-time – and automate where possible. Google has had a good model to date, but this announcement from Facebook is a strong challenge.

With Facebook’s 1.4 billion-user base, its insight into its users' personal interests and behaviour, and its growing dominance of both mobile display and desktop display inventory, it is in a unique position to identify and engage consumers.

Its identity layer is unparalleled in the programmatic display market, which means that it can target users at all times, no matter what device they are using at the time. The key for Facebook was harnessing this reach and insight, at scale – which is where Product Ads comes in.

Product Ads is device agnostic, tailoring content to the individual, which enables it to influence the path to purchase – across mobile, tablet and desktop newsfeeds, with a PLA beater to boot. Plus, Facebook adoption and usage is still growing, so the product can only evolve and improve results for e-marketers.

Savvy e-marketers know that Facebook as direct response marketing machine is already a key channel for consumer engagement, but Product Ads has brought it to an inflection point, making it an essential and go-to paid channel, alongside Google.

This is where the issue of taking market share from Google comes to the fore. Obviously with Product Ads the ROI will ultimately justify the spend, but at the same time the pot for paid media channels is not infinitum, so there will come a point where e-marketers must make a choice between Facebook and Google, even if it is just a case of ratio spend. In any case, Google will find that Facebook will be getting a significant piece of the pie.

As we look ahead, Facebook Product Ads certainly has the edge when it comes to cross-device tracking and cross-device attribution, which mimics how the consumer is behaving and wants to be engaged with. It also squares the circle for retailers who have previously been stuck on the last click – because it connects the dots between mobile ads driving desktop conversions.

With Product Ads, the on boarding is also easier and can be driven through automation – by use of product catalogues to automate creative with intent signals coming from pixels and mobile app SDKs.

In early beta tests, we are hugely encouraged by the ROI of Product Ads, comparable to FBX. Previously access to the mobile newsfeed was blocked, so having access is revolutionary – especially given that Facebook boasts 20 per cent of all mobile inventories globally.

With all of these benefits in mind, it’s clear that Facebook has taken Google by the horns. The ultimate winners are the e-marketers, who are getting more choice and an ability to get closer to the consumer. Facebook Product Ads is arguably giving back a lot of control to the end advertiser, with a hugely disruptive product that drives efficient product-level retargeting on all devices.

Declan Kennedy is CEO of StitcherAds. He tweets @declankennedy