June 14, 2016, 10:00 AM

Facebook gives retailers two ways to measure how its ads lead to in-store sales

The social network also adds a store locator tool to its local awareness ads.

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Facebook Inc. is looking to help retailers bridge the online/offline divide by rolling out new ad formats that aim to drive consumers to physical stores and help retailers measure the impact of those ads.

With 82% of Facebook’s advertising revenue stemming from ads that appear on consumers’ mobile devices, which they frequently carry with them, the social network is promoting its ads as an effective way to link online and offline marketing. And it’s adding tools to help retailers better understand how Facebook ads lead to store traffic and sales, says a Facebook spokesman.

One of them is a metric called store visits that the social network added to its ad-reporting tool today. The metric is estimated based on information from shoppers with location services enabled on their phone, as well as from merchants that use Facebook’s beacons that it began giving away last summer. The metric can focus on consumers who saw the Facebook ad within one day, seven days or 28 days before coming into the store.

Retailers who have tested the tools include Petco Animal Supplies Inc., No. 114 in Internet Retailer 2016 Top 500 Guide, and the French retailer E.Leclerc SA, No. 13 in the 2016 Europe 500. Facebook says the ads helped E.Leclerc reach 1.5 million people within 10 kilometers, or 6.2 miles, of its stores and that roughly 12% of clicks on its ads were followed by a visit to a store within seven days. 

Facebook plans to roll out the functionality to advertisers globally in the next few months.

The social network also announced it is testing an Offline Conversions API, which lets retailers link transaction data from their customer databases or point-of-sale systems to Facebook’s ad-reporting tool. For the tool to work the retailer needs some identifying piece of information about its customers, which may be information gathered via a loyalty program or a customer’s email address. The retailer then scrambles the non-Facebook information, creating what cryptographers call a "hash" that can't be decoded to recreate the individual addresses; Facebook does the same with its users’ information. Facebook then matches up the retailer’s hashes with its hashed user accounts.

Once that hashing is done, retailers can monitor transactions that occur in their stores and over the phone, which can help them gather demographic insights about whether consumers who saw their ads are buying in a store. That information can help them optimize future campaigns, says the spokesman.

Retailers can work with Facebook directly to set up and optimize the tool or they can work with vendors including IBM, Index, Lightspeed, LiveRamp, Marketo and Square. 

"It’s critical for small businesses with lean budgets to understand the return on each dollar spent on digital marketing,” says Saumil Mehta, customer engagement lead at Square. “By syncing their Square sales data with Facebook campaigns, sellers can finally see which sales came from customers who viewed their Facebook ads." 

Facebook says retailers can test the Offline Conversions API test across all ad objectives, including local awareness ads.

The social network also added what it calls a native store locator to its local awareness ads, which are ads retailers can use to drive consumers to their stores. A marketer can target a consumer based on her location and then present her with an ad that features a Get Directions button. When a consumer taps the button, the store locator appears showing a map of all the locations a business has nearby. She can then tap a location to see the store’s address, hours, phone number, website and an estimate of how long it would take to travel to the store. 

“Store locators on a business's website can be frustrating for people on mobile, requiring several taps or typing in a postal code to a small form,” Facebook writes in a blog post. “The store locator removes that friction to help people on mobile find business locations quickly and easily.”

The store locator can be added to any local awareness ad and is available now to all advertisers.

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