Facebook is getting better at competing for brick & mortar ad dollars, announcing an ability to tie a retailers inventory into their product ads, so that they aren’t advertising out of stock items. Very smart and necessary to compete with Google for online retail ad dollars.

Just this past June, Facebook added features to track in-store purchases prompted by a retailers Facebook ads. We wrote at the time:

This is the holy grail for convincing brick and mortar advertisers that Facebook is an effective platform to drive in-store business, assuming the data shows their advertising working. It could also be Facebook’s achilles hill if advertisers discover that their ads aren’t driving business.

Tying ads to inventory is a way for Facebook to increase click to conversion percentages. This lowers a marketers ad cost per sale, and is an especially important metric which retailers use when considering their ads effectiveness.

The inventory feature is targeted toward large retailers like JC Penny, Nike and Coach, of which many have been insisting on connecting their local inventory availability before they make large Facebook marketing commitments. Facebook is still in the very early stages of their attempt to make their platform a local retail sales channel.

Facebook, with this new feature, gives retailers the ability to create customize creative for every store location based on local product availability, pricing or promotions. This is a major step toward attracting the big brands and is a continuation of where they see most of their ad revenue coming from in the future.

Consumers are now using their mobile phones to price check, look for coupons and compare products while in the store and they are also continuing to engage in social media. Facebook aims to take advantage of this and over time change the mind-set of their users about Facebook, making it about both social exchange and ecommerce and in-effect combining the two.

“If a fashion retailer wishes to advertise a nationwide sales event happening at every store, dynamic ads for retail will only showcase products that are in-stock at a nearby store and display the price found at that location,” said Facebook in a blog announcement of this feature. “As the ads are linked to the local product catalog, if a product sells out in one store the campaign automatically adjusts so that people in that region will no longer see it advertised. Product selection for each ad can be optimized based on people’s online and mobile shopping behavior.”

Facebook describes their dynamic retail ads this way:

• Local availability: An availability indicator on the ad shows people that a product is available at a store near them, and the store locator makes it easy for people to get directions.
• Product summaries: Advertisers can use Facebook-hosted product summaries to give potential shoppers the information they need without leaving the Facebook app.
• Different actions: Product summaries include ways for people to take actions like contacting the nearest store, buying online, or saving the product for future reference.
• Similar products: Similar products available at the nearest store are featured so people can browse the aisles right from their phone.

Facebook says that they are currently testing dynamic ads for retail with advertisers including Abercrombie & Fitch, Argos, Macy’s, Pottery Barn and Target. They will be expanding to more retailers in the coming weeks.

“Extending the power of Facebook’s dynamic ads to in-store inventory opens up exciting new possibilities for Macy’s as an omni-channel retailer,” says Serena Potter, Group Vice President Digital Media Strategy at Macy’s. “We were excited to be the first up and running with Facebook’s dynamic ads for retail as it truly allows us to personalize product ads based on online behavior and inventory at the nearest Macy’s store. This bridges our online and offline channels to deliver a more engaging, relevant, and useful experience to shoppers.”

Facebook Also Introduces Store Visits Objective Options

“We’re also introducing our first marketing objective built specifically for advertisers to drive more people to their stores or business locations,” noted Facebook. “The store visits objective builds on the geo-targeting and ad format features of the local awareness ad solution and introduces store visits as the primary reporting metric and a new optimization model.”

They have added features to let retail brick & mortar advertisers add an objective defined by the marketer in order make their marketing more efficient. They said that Albertsons grocery store used this in beta tests that decreases their cost-per-store-visit by 40 percent.

Also added were improvements to geo-targeting, where advertisers can now define a geo radius based on population density and desired reach.

All of these features are only available in mobile Facebook advertising.