As Part of Its Broader eCommerce Push, Facebook Wants to Improve the Performance of Shops

Facebook wants to boost the performance of businesses as part of its larger eCommerce effort. As seen in this example from eCommerce ad expert Tony Christensen, Facebook is now encouraging some advertisers with a Facebook and/or Instagram shop to send a portion of their campaign response to their in-app store rather than a third-party link.

Facebook also claims that the process will provide it with more data to help optimize its traffic direction processes and ensure that it is driving people to the surface where they are most likely to convert, as well as covering the estimated cost of impressions that direct traffic to shops for those who opt-in. Which is an important factor to consider – and at 10% of your overall ad traffic, that might be a big amount, depending on your brand, campaign, and other factors.

However, it may also assist Facebook in optimizing your future ad strategies. If, for example, Facebook's data can detect which members of your audience are more likely to convert on Facebook rather than on your website, it may use that information to target future efforts and direct them to the most appropriate location to encourage purchase.

You'd think that customers who've already purchased things from another Facebook/IG shop or on Facebook Marketplace would be the major focus of this cohort since Facebook would know that they're more inclined to buy in-app based on previous activity. However, the more Facebook can learn about the unique characteristics of people who are more inclined to buy from each, the better its systems will be able to steer others, which might have huge implications for future campaigns.

However, it's also possible that it has something to do with Apple's ATT update, which has seen a lot of customers opt-out of in-app tracking, effectively leaving Facebook blind to conversions performed outside of its applications. In this regard, Facebook will almost certainly need to collect additional data on Facebook and Instagram Shops conversions to maintain maximum efficiency inside its tools, which will mitigate the impact of the ATT upgrade because it will still be able to track that activity.

If Facebook can gain more data and assure that stores achieve better results by optimizing for Facebook and Instagram shops instead, it will be a huge win – which is why it is willing to reimburse the expenses of impressions to shops through this option. It's a fascinating thought in either case and with Facebook seeking to expand into eCommerce and sell things in-stream, and its reach and data-matching would someday give a superior approach to boost conversions, negating Apple's change.

Facebook has also introduced live-stream shopping events (on both Facebook and Instagram), Shops on Marketplace, and sponsored product listings within the Instagram Shop tab, in addition to Shops. It's also working with automatic object tags that could someday provide more direct product alternatives linked to each clip, akin to Pinterest's visual search feature, which would allow users to scan a real-world item, or use any provided photo or video, to identify related product listings.

The primary focus here is on Asian markets, where Facebook is gaining popularity, and if it can grow its eCommerce potential now, amid take-up in places like India and Indonesia, it might help to make its platforms a more important tool in each of their respective digital changes. That has a lot of potential for Facebook in the future, and it's where it'll likely see the most substantial growth now.

Apple's change puts a dent in that, and if Android follows suit, it may make things considerably more difficult, so it makes sense for Facebook to work on optimizing its tools now in preparation for any future data privacy moves. At the same time, depending on the specifics, it can be worth a try for your efforts.