Last week, Facebook announced it’s testing a new advertising unit in its Marketplace that will feature a “buy now” button in the ad.

It’s no secret that Facebook is a digital advertising behemoth. eMarketer predicts Facebook will serve over 21% of all mobile ads this year, which earns Facebook the number two spot in all digital ad sales, second only to Google.

That being said, Facebook “buy now” ads simply won’t work. Here’s why.
Industry Opinion by David Rekuc, Ripen eCommerce

---

Consumers have very little trust in the social network’s privacy standards; most recently, Facebook revealed that it has experimented on users’ moods by manipulating their news feeds. Savvy Facebook users will almost certainly suspect “buy now” transactions will be used to target them with even more ads. The site hasn’t commented on this yet, but it’s by no means an unfounded theory. But even if Facebook is able to overcome its trust problem, it still faces an even more serious threat – timing.

For most eCommerce sites, a great ad is made up of three key components:
1. The product(s) sold in the ad appeals to its target audience.
2. The audience has the means to buy the item.
3. The ad is shown at a time when the audience is ready to buy.

Advertising on Facebook Marketplace falls short here because retailers cannot target users based on a signal of their intent to buy. In recent years, advertising has improved with Facebook Ad Exchange (FBX), where retailers can target users who have already been to their site but did not complete a purchase. Unfortunately, there is no indication that the “buy now” button will be offered through FBX.

On the other hand, Google’s ads are inherently more valuable to eCommerce sites because searching for a product indicates a consumer is ready (or almost ready) to purchase an item. Google ads pass all three of the criteria above – and they don’t require a third party ad unit to support the transaction.

Unless Facebook plans to integrate the new button into its Ad Exchange, the “buy now” feature will not reach potential customers when they are ready to shop. This means the “buy now” button will only ever be useful for impulse products, which only make up a small fraction of the eCommerce industry. Without retargeting capabilities, the efficacy of the “buy now” button will always lag behind eCommerce ads on Google and FBX.

For what it’s worth, Twitter’s plan to incorporate eCommerce advertising also fails to target consumers when they are ready to buy. However, Twitter ads are new and exciting; they don’t suffer the same negative perception as ads on Facebook. Consumers may be more willing to give them a shot and retailers more willing to wait for a reasonable ROI.

David Rekuc (@DaveRekuc) is the marketing director at Ripen eCommerce, a full-service agency that specializes in building custom solutions for online retailers. For more information, visit www.ripenecommerce.com.

01.08.2014    Tags: facebook, Google, mobile-commerce, payments, twitter