Facebook has long struggled to get an e-commerce hook to work on the platform. Users spend hours a day on Facebook, but the contention has been that users aren’t in the right mindset to shop while spending time on the social network. Just as Facebook’s attempts at making search a relevant piece of the user experience have failed to have any impact on Google’s search business, its e-commerce and product advertising efforts haven’t given Google or Amazon reason to pause. Until now.
Facebook is getting poised to make real headway as a viable advertising competitor to Google and Amazon in the shopping sector, including last week’s acquisition of shopping search engine TheFind.
Here are a few steps Facebook has taken:
Buy button testing in ads
Dynamic product retargeting with multi-product ads
More robust options for retargeting based on purchase intent, order size etc. with Custom Audiences
Just as Facebook took mobile ad sales from nothing to huge in a mere two years, the company’s moves into shopping ads this time around could finally take off in a big way. Here’s why TheFind acquisition could give Facebook the technology and expertise they need to make this happen.
Why TheFind?
At first blush, most in the e-commerce space probably don’t give TheFind much thought. It’s long been one of those sites to “check off” the list; submit a product feed and mostly forget about it. Most sites never saw — or expected to see — much activity from TheFind. But that’s not the value Facebook sees in it.
We don’t know exactly how Facebook will use TheFind’s technology assets beyond the ad relevancy piece that was alluded to in the acquisition announcement:
“Together, we believe we can make the Facebook ads experience even more relevant and better for consumers. Our business is about connecting people with the topics, companies, brands, and increasingly products they care about and we look forward to doing that with TheFind on board.”
TheFind can help Facebook with better ad targeting in a number of ways. The company has the technology to manage large, detailed product feeds. As Todd Bowman, head of Comparison Shopping Engine and Feed Management at RKG, a Merkle company, pointed out to Marketing Land, TheFind had more capacity to handle product attributes in its feeds than most other feed handlers, including Google. At the same time, TheFind can handle Google feed submissions, making it easy for retailers on that platform to submit to TheFind.
TheFind managed to assemble an index of 500 million products across 500,000 stores by offering free inclusion.
While TheFind never really broke through to become part of the zeitgeist — the company claimed over 15 million shoppers used it — I believe it could turn out to be a pretty brilliant acquisition by Facebook.
What’s under the hood at TheFind?
Even to those who’ve been in e-commerce for a long time, TheFind’s breadth of capabilities might come as a surprise. Let’s take a closer look at how TheFind worked and what Facebook’s getting with this acquisition.
Product feed technology: As covered above, merchants could verify their sites on TheFind’s merchant center and upload a product feed on a regular basis for free. Many e-commerce platforms include the ability to automatically submit feeds to TheFind and the company partnered with affiliate networks like Commission Junction, Linkshare, Shareasale etc. When merchants signed on with one a network, TheFind got access to the product feeds and earned commissions as an affiliate.
Product search engine: Feed management is just one side of the story. TheFind referred to itself as a shopping search engine. It not only could take structured feed data, it crawled marketplaces including Amazon, eBay, Etsy; retailers such as Macys, Home Depot, BestBuy, Sears, Target, Overstock; and hundreds of thousands of small and medium sized online retailers and brand sites.
Personalized recommendations driven by Facebook integration: TheFind started working with Facebook back in 2010 when it enabled users to see what products have Facebook likes by logging in with their Facebook credentials. Glimpse by TheFind (at glimpse.thefind.com/glimpse for now) provides “Discovery by Likes” for users that sign into Facebook. Users could tailor their product preferences after logging into Facebook and see individual products or page through the latest digital catalogs from retailers.
Local results: This is potentially huge for Facebook. Well over 90 percent of transactions still happen in physical retail locations. When users search on TheFind, they can click on the local results tab (on both mobile and desktop) to find a map of nearby retailers that carry the products. Clicking on a retailer’s name on the map brings up the local inventory along with the phone number, address and distance from the user.
Online-to-Offline Purchase Data: For iOS and Android, TheFind’s shopping app touted its ability to “tie your online and offline shopping experience together”. Users could find items available online and in local stores. They could redeem coupons from merchants and get a price match in stores from retailers like Best Buy, Walmart, Toys-R-Us and Target. Again, the appeal for Facebook isn’t the popularity of the app — The Google Play Store shows the app has only been downloaded roughly 50,000 times — but the online-to-offline insights and measurement possibilities it offers.
Was TheFind a smart buy for Facebook? “Absolutely, for the crawling and compiling of semi-structured product inventory data alone,” said Nii A. Ahene, COO of shopping feed management agency CPC Strategy. “Facebook is pretty poor in search and has non-existing capabilities around massive web crawling. TheFind did a great job at aggregating semi-structured retail data and crawling the web.”
A Location Targeting Goldmine With Offline Conversion Measurement
Facebook has only stated that it plans to use TheFind technology for better ad targeting, but looking at its various capabilities, it’s easy to start seeing that there are a plethora of possibilities for Facebook. The location targeting paired with in-store purchase analytics is something Facebook — and several others including Google — is already working on. Offline metrics will drive more ad dollars online. By 2019, location targeted ads are expected to make up 43 percent of all mobile ad spend in the U.S., according to BIA Kelsey.
Facebook currently does this by matching login emails to those used at check out. With TheFind technology Facebook could potentially by-pass or augment the email matching and make online-offline conversion tracking available to more than just the largest retailers.
Getting big enough sample sizes is a challenge that both Google and Facebook face with their in-store metrics. In December, Google launched its “in-store visits” metric in AdWords. Google determines a store visit based on user proximity to the advertiser’s location on Google Maps from users that have Location History activated on their Apple or Android smartphones. Google’s DoubleClick does this through retailer uploads of their in-store sales databases.
The beauty of TheFind is that it didn’t need to rely on retailer feed submissions to show users relevant products that included local results, deals and coupon offers.
Ahene has noted that TheFind’s wealth of location data could give Facebook an edge. Asked how he sees this data manifesting in a local play for Facebook, Ahene told Marketing Land, “Facebook’s passive location and check-in data seems like too attractive of data source not to figure out how to monetize somehow. Whether this manifests in local availability product ads or just serves a data layer to tie web behavior to real world behavior remains to be seen.”
Why Is Facebook Shutting Down TheFind?
Facebook said it will be closing down TheFind search engine in a few weeks. Why is unclear. It seems an odd choice. Why not keep the search engine running, keep accumulating data and feed that back into Custom Audiences for ad targeting?
“It could be a short-sighted cost decision or they may think the value around TheFind is just around a specific approach to inventory or feeds that is not consumer facing,” speculates Ahene.
It may be that Facebook uses the search engine on the back end along with TheFind’s feed handling technology to dramatically enhance Facebook’s current capabilities in that area. Michelle Alfono, Director of Display Management at Merkle, suggests Facebook could use the social affinity data as a recommendation engine powering dynamic product ad retrargeting. She points out that currently advertisers need to have DMP or API access to run product ads on Faceboook. With TheFind product feed handling, Facebook could have a quick win in just opening up the ad program up to many more advertisers.
I could also see Facebook reworking, rebranding and relaunching TheFind’s mobile shopping app perhaps as a marketplace that would incorporate the buy button it’s currently testing.
What TheFind Powered Ads Could Look Like & Measure
Social affinities, location targeting and products shown based on past behavior are all possible with what Facebook gets from TheFind. Consumers could start seeing ads in their News Feeds from nearby stores for products based on what they liked on Facebook and around the web, what their friends liked, or — with Look Alike audiences — what others with similar profiles and social affinities liked.
Facebook could keep the coupon and even the price-matching functionality used to tie an ad back to in-store purchases.
TheFind included coupon offers that could be redeemed at both online and local retailers and tied back to the ad.
Facebook said nothing about how it might leverage in-store conversion data in TheFind announcement, but it’s hard to imagine it’s not a factor.
With an Atlas integration these ads could extend beyond the walls of Facebook.
Should Google or Amazon Be Worried?
Both Ahene and Bowan both told Marketing Land that neither Amazon nor Google are likely that shaken by Facebook purchase of TheFind.
Ahene says Amazon’s Marketplace team is pretty ambivalent about Facebook since they “already have deep, often one-way relationships with non-marquee vendors and third-party resellers.” Amazon’s Marketing Group, though, may be more interested in this news since they are reportedly setting to launch a competitor to Google’s Display Network, but Ahene adds that they likely still see Google as their main competitor for ad dollars.
Google’s Shopping team is likely more alert to Facebook’s recent string of moves in this area. Still, Ahene says, Google’s own pipeline of projects and betas will keep retailer dollars flowing to the search engine.
It’s going to be an interesting space to watch. Based on these recent activities, I’m betting we will see Facebook make real waves in shopping and retail advertising.
Update 3/25/15: TheFind has begun emailing partners to notify them that the immediate push will be on Facebook Product Ads.
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