Taking names: Facebook's newest ad unit could help retailers boost their email lists

Facebook’s product is important because email is the most cost-effective marketing channel that online retailers use.

Facebook Inc.’s latest advertising product could help retailers add names to their email marketing lists.

The social network today rolled out lead ads, a new ad format that eliminates the need for shoppers to fill out forms, such as an email marketing signup.

“These days people expect to be able to do everything from their phones,” Facebook states  in a blog post. “Mobile phones are where people communicate and discover the things they like, but historically, it’s been difficult for people on mobile to signal to businesses that they want to learn more about their products or services.” Lead ads aim to address that challenge by giving shoppers a way to sign up to receive information—like marketing emails and special offers—from retailers and other businesses in two clicks.

Here’s how the ad works: When a consumer clicks on a lead ad, a form that’s automatically populated with the contact information he has shared with Facebook, such as his name and email address, pops up. The consumer can then either edit that information or click a Submit button.

The information shared in a lead ad can then be integrated in real time within retailers’ customer relationship management systems, assuming that they work with one of the six vendors that Facebook is working with—Driftrock, Marketo, Maropost, Oracle Marketing Cloud, Sailthru and Salesforce. 27 retailers in the 2015 Top 500 Guide use one of those vendors’ systems, according to Internet Retailer’s Top500Guide.com. Merchants who use another system can manually set up a link between their CRM system and Facebook through a software conduit known as an application programming interface, or API, or they can download lead information manually into a comma-separated values, or CSV, file.

Shoe manufacturer and retailer Stuart Weitzman LLC used lead ads to find shoppers who wanted to receive its marketing emails, which feature updates and an “inside look into the world of Stuart Weitzman.” The ads yielded a 52% more efficient cost per lead across domestic and international markets, says Susan Duffy, chief marketing officer for the retailer, which is No. 473 in the Internet Retailer 2015 Top 500 Guide.

Email is a particularly appealing marketing channel for online retailers because it is easy on marketers’ budgets. For instance, Forrester Research Inc.’s “The State of Retailing Online 2015: Marketing and Merchandising,” which is based on a survey of 224 North American retailers, found that merchants email’s average cost per order is $6, making it the least expensive channel among the 32 channels it examined. For the sake of comparison, the average cost per order for retargeting ads is $10, $11 for affiliates and $28 for social media ads. 

Taking names: Facebook"s newest ad unit could help retailers boost their email lists