Marketing
Sep 17 2021
19 minute read

Discovery Commerce on Facebook Explained

When we think of online shopping, it seems pretty straightforward, right? The shopper goes online and either searches for products or peruses a store’s website for something they might like.

That definition is all fine and dandy, but it’s outdated. With the pandemic, the way people shop has rapidly changed. There has essentially been a close in the age gap between mobile users, with the majority of people of all ages using their mobile device as their main screen. 

People now expect delightful, mobile-friendly shopping that they can experience anywhere, any time. To keep up with the changes of the consumer, businesses need to pivot their marketing strategies to focus on the future of online shopping -- Discovery Commerce.

This article will guide you through the basics of Facebook Discovery Commerce as well as offer insights and examples to businesses who are eager to take advantage of this vital e-commerce tool.

Short on time, or simply prefer visual learning? No problem! Here's an infographic:
 
 

Table of contents

What is Discovery Commerce?

In short, Facebook Discovery Commerce is an online sales system that puts the customer in an “always-shopping-mode” and guides them to the perfect product.

Traditional online shopping is an activity or a chore that people must set time aside for (appointment shopping). And as it stands, there are too many products out there on the market for buyers to actually explore. This makes online shopping time-consuming and tedious for consumers. With so much to sift through, by the time a buyer finally finds something, they might not even want it anymore, also making advertising more expensive for businesses.

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Facebook Discovery Commerce is a system powered by data and machine learning that connects products with the people who will most likely love them based on their online behaviour before the consumer starts searching for them (hence the always-shopping-mode), creating a delightful shopping experience.

What's the difference between Facebook Discovery Commerce and Google Discovery Ads?

But isn’t Discovery Commerce the same thing as Google Discovery Ads?

Well, there is of course a lot of overlap in theory between discovery commerce and discovery ads -- the main difference between the two being that each match respectively with Facebook and Google.

While discovery commerce is associated with Facebook and their major platforms (Facebook, Instagram, and Messenger), Google Discovery Ads run on the three main Google properties: Discover, Gmail, and YouTube.

To learn more about Google Discovery Ads and how they work, click here. And if you’re interested in some light reading about TrueView video discovery ads (TrueView video discovery ads can run on YouTube and Google Display Network), look no further.

 Now, back to Facebook Discovery Commerce.

Why Facebook Discovery Commerce is so important now

The pandemic rapidly accelerated the growth of e-commerce and studies show that these changes are here to stay. It’s essential for businesses to also accelerate their digital marketing strategies by becoming more consumer-centric and by meeting shoppers where they spend their time, which has undeniably shifted more and more to online markets.

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Social media is now the number one discovery platform, with the majority of moments of discovery happening on Facebook platforms. 

In a recent report, Accenture found that the majority of Household Staples shoppers (59%) and Media and Entertainment shoppers (63%) use Facebook for shopping. They also found Messenger to be a valuable resource with 41% of Apparel and Accessories shoppers and 60% of Household Staples shoppers using the platform to message businesses, chat with friends about products, and join in other shopping-related activities.

As people continue to grow accustomed to buying online, brands should challenge traditional shopping conventions. Right now, the biggest opportunity in e-commerce is not in capturing the consumer’s desires, but rather in creating them.

So, the most important question businesses should be asking now is this: How do I better reach my potential and unknown customers?

The Facebook Discovery Commerce System

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How the Facebook Discovery Commerce (FDC) system works

To anticipate what someone will likely buy, Discovery Commerce looks further than numbers and basic demographics to understand the consumer. The system combines signals from businesses’ offline and online channels with customer behaviour on Facebook platforms to produce actionable insights and then enables users to seamlessly purchase (discovery) products with engaging shopping experiences across Facebook, social media, and messaging apps.

The Facebook Discovery Commerce System is made up of four pillars:

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  1. The Personalisation Engine: The data we share online about our interests creates a deeper understanding for machine learning, which in turn curates more relevant content choices for us.

  2. Engaging Surfaces: Consumers expect user-friendly, mobile-first experiences. This pillar delivers an interactive serendipitous shopping experience to buyers where they’re already spending the majority of their time.

  3. Advertising and Conversion Tools: Advertising is the focus here. In the discovery phase, consumers can find products through product tags on ads or posts, through creators, or through Live video broadcasts. During the consideration phase, people can browse and learn more about products through Facebook and Instagram Shops, or connect with businesses through click-to-message ads. This helps people smoothly move from discovery to purchase, often without leaving the app, which reduces barriers and friction for people to discover the products they love.

  4. Optimisation and Measurement Solutions: The golden ticket to the FDC model is that the algorithm is continuously optimised based on how people interact at each stage of the shopping process, helping businesses refine or evolve their marketing approach to use advertising budgets effectively.

Benefits of Discovery Commerce

  1. Your business can reach more buyers. There is a better chance that a shopper will discover your product or brand if they peruse a marketplace using filters and categories.This is the most successful way for new buyers to find brands, especially smaller or less well-known brands.

  2. Your brand earns awareness. Consumers who discover your products may take an interest in your brand, company, and the rest of your catalog, attracting more traffic back to your own social networks and sales channels.

  3. You can promote sharing of your product(s). The soul of social selling lies in sharing. By encouraging engagement through likes, shares, and chat, or by addressing questions raised by customers and posting comments yourself, your business establishes trust and credibility, your visibility improves, and the chance to be discovered by others increases. 

  4. You can cross-sell and evaluate products. This is a great chance to move stock by selling new items or products that might otherwise go unnoticed through cross-selling strategies such as best-sellers, related, trending, “shop the look,” etc.

How Dynamic Ads are enabling Discovery Commerce

Since Facebook has information about which people are visiting which products, businesses can direct those insights into DABA (Dynamic Ads for Broad Audience), ads that target Facebook users who have not yet been to your site, but have shown interest in other sites with similar products. Facebook’s recommendation engine then selects the right product from the advertiser’s catalogue when rendering the ad for the user from Broad Audience, facilitating businesses to better generate discovery.

The FDC system continues to learn from the actions that custom audiences make, creating a feedback loop that constantly fine-tunes as it collects data. As it gathers more insights via conversion optimisation, the system improves at generating the discovery and the demand essential for business growth, connecting the right person to the perfect product before they’ve even started searching.

This is a powerful approach because dynamic ads are personalised and utilise all the signals Facebook has, which in turn optimises your campaign results. It’s why the portion of spend on Dynamic Ads has grown over recent years, reaching nearly 75% of the Facebook ad spend of our e-commerce customers.

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Best strategies to leverage discovery commerce

Improve your product search

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According to Baymard Institute, 61% of search engines require users to search with the same exact product lingo the site uses and 46% don’t handle thematic searches, such as “office chair” or “spring jacket.” This is problematic as shoppers are left with few or irrelevant search results, costing them time to rethink and retype their wording and may cause them to believe the products they’re seeking aren’t actually available. 

You can improve product search by having more product attributes in your product descriptions, which enables customers to choose the filters they want when searching and makes it accurate and easy for shoppers to discover your products. 

Create a full look rather than single items

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Ikea is the king of this. Discovery Commerce is about crafting a delightful experience for a browsing shopper. If you’re selling lamps, create the full vibe by adding your lamps to a beautifully decorated bedroom. Videos are also really helpful.

Make your products available on social media

As social media is now the number one platform for discovery, it is imperative that retailers make their products available on social sites. Internet users are likely to discover brands through social media recommendations or comments. (Think of that convincing high school friend always promoting brands in their instagram stories).

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The evolution of social sharing is motivating people to like, share, and buy items they see on the platform. Now is the time to take advantage of social media selling.

Use Facebook to guide product discovery

Facebook is still number one when it comes to driving referral to online shops. You’d be leaving money on the table if you didn’t take full advantage of everything Facebook has to offer.

How can you further empower Discovery Commerce? 

While Facebook Dynamic Ads efficiently connect your products to the right people, they can only leverage the data that Facebook has, leaving a wealth of valuable insights out of scope. In addition, the market is shifting more and more toward protecting user privacy, causing Facebook to lose signals due to an increase in ad blockers and opt-outs. 

Luckily, our Product Marketing Platform (PMP) is an efficient, user-friendly solution. ROI Hunter’s PMP has an unique tool called Product Insights, which collects product-level data from across all of your channels, and integrates it into a single source of truth. This allows you to better analyse your performance on a product-level by providing the necessary data to find which products you should promote, which products you should stop promoting, and what your most popular channel for each product is. With Product Insights, you are able to further enhance Facebook’s algorithm for Discovery Commerce through more holistic product-level data.

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At this point you’re probably asking, but how exactly can Product Insights further empower Facebook’s algorithm for Discovery Commerce? Let’s take a look at some examples.

Real-world examples

Ensure high margins are prioritised

During the pandemic, Imaginarium chose to shift their focus toward digital marketing efforts to increase overall ROI and maximise their online revenue.

To achieve this, ROI Hunter connected Imaginarium with Product Insights. From this granular product-level data, Imaginarium was able to filter their catalog by whatever metric they decided to focus on (e.g. margin), to create highly specific, optimised product sets (e.g. a set of all high margin products to optimise toward profitability).

In the end, this campaign cost Imaginarium 25% less and brought in 61% more revenue! The finely targeted promotion had a 72% higher conversion rate than previous campaigns, and their overall ROI increased by 115%.

 

Trending products in Google Shopping Insights

MadeiraMadeira wanted to maintain the same level of sales they had been making before COVID-19 took over. To achieve this, they needed more insight into their product performance, more efficient ways to create and manage their campaigns, and a refined strategy for using their business data more effectively.

In the end, MadeiraMadeira used cross-channel data to find the top Google Shopping impressions on Facebook acquisition campaigns, and the results were pretty cool. While ad spend dropped by 35%, their revenue jumped 35%. The return on ad spend improved by 154%!

 

Identify successful products in other channels from Google Analytics

Flannels was hoping to scale their dynamic campaigns. To accomplish this, ROI Hunter set Flannels up with their Product Marketing Platform (PMP). They used Product Insights to gather product-level data from across all channels, integrating this data with their feed within ROI Hunter to form a single source of truth. 

With this granular data from across channels, Flannels created three new product sets: Best-sellers, New Products, and Hidden Gems to test against previous campaigns. 

The results were amazing. Flannels improved their click-through rate (CTR) on Facebook by 21% and their conversion rate per Google Analytics by 76%. Flannels also attained a whopping 107% increase in their return on ad spend (ROAS) per Google Analytics.

Conclusion

From our work with hundreds of large retailers over the years, we’ve been able to develop our Product Marketing Platform to aggregate product-level data from all possible sources and turn them into actionable insights. With practice, we’ve learned that combining Facebook data with the data from other channels and sources can rapidly increase Facebook’s ability to deliver the perfect product to the right person. We like to say that it’s like a giant waiting to be woken up. If you want to learn more about how to awake the beast, take a look at this article

Finally, Facebook Discovery Commerce isn’t just the future of e-commerce - it’s the present. ROI Hunter’s Product Marketing Platform (PMP) is the best bet to ensure that the right product does in fact find the right customer.

 

Find out how ROI Hunter can add value to your business.
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