What are Dynamic Product Ads? How to Use Them + Examples

Dynamic product ads use data, shopper history and automation to generate better Facebook ads faster. Learn how to build DPA campaigns that attract and convert customers (checklist included).

Dynamic product ads (DPA) tend to be a win-win for advertisers and audiences alike. When you need to promote a large product catalog, DPA can save you time while helping you create up-to-date and relevant ads for your target audience.

So are dynamic product ads a good fit for your brand? In this article, we’ll cover everything you need to know about DPA for Facebook and Instagram, including benefits, best practices, examples, and a complete how-to guide.

What are dynamic product ads?

Dynamic product ads use data feeds and ad templates to generate feed ads automatically. Although they’re built with automation tools and product catalogs, these advertisements look like any other image, video, or carousel ad.

One major difference between standard and dynamic ads is the latter is tailored to prospects based on their browsing or shopping history. Dynamic product ads often feature items that prospects are already thinking about buying.

However, DPA only works for items eligible for Meta product catalogs. We’ll cover these categories and show examples below.

Why should you run dynamic product ads on Facebook?

Dynamic product ads aren’t the right fit for every advertiser or campaign. But these Facebook ads are worth it when you want to achieve the following goals.

Create ads more efficiently

One of the biggest perks of dynamic product ads is the speed you can create and publish them. There’s no need to set up individual ads for each product you want to promote. Instead, all you have to do is create an ad template and connect a product feed.

Meta Ads Manager uses your inputs to generate ads at scale. Since it connects to your product feed, it uses current data to make real-time adjustments. That means you don’t have to worry about pausing ads or wasting ad spend on out of stock items.

Generate relevant ads automatically

Because they use templates, dynamic product ads may seem generic. However, they’re anything but.
Meta uses audience data to create relevant ads for each prospect. These ads often feature items prospects have recently viewed or products related to their recent purchases. Since they’re more relevant, they’re more likely to appeal and convert.

If you’re more familiar with pay-per-click (PPC), think of them like dynamic search ads. This Google Ads tool creates highly relevant ads in real time based on your inputs.

Retarget engaged prospects

With dynamic advertising, Facebook provides advanced tools for audience targeting. Instead of building custom or broad audiences, you can easily retarget engaged prospects. As a result, these ads can reach prospects throughout the buyer’s journey.

“Dynamic product ads can be highly effective if implemented correctly. They’re a great assist for remarketing campaigns and can really increase sales and ROAS. It’s essential to have an experienced partner or Facebook ads consultant managing your dynamic product ads to ensure they’re getting the desired ROI,” explains Sam Yadegar, CEO of HawkSEM.

Examples of dynamic product ads

What are dynamic ads on Facebook, and which product types can they feature? Let’s look at real-life examples of the four eligible product categories.

Automotive dynamic product ads

Do you have hundreds of different car, truck, and SUV models to promote? With dynamic product ads, auto dealers can easily get the most relevant vehicles in front of interested buyers.

Above, the Flow Volkswagen of Durham ad uses dynamic copy to list the model in each carousel card’s headline and to highlight relevant promotions in each card’s description. Each carousel card also uses a creative overlay for consistency.

Ecommerce dynamic product ads

Dynamic product ads are also popular for ecommerce sites — especially those with dozens or hundreds of products in various categories. Below, the With Clarity ad features product names in each headline while keeping the creative consistent with a simple white backdrop.

Below, the Cozy Earth ad also features product information in each headline field. Each creative uses the same overlay, highlighting available savings and a customer quote, but each carousel card links to a relevant product page.

Dynamic product ads for hotels

Dynamic product ads work just as well for hotels, especially for chains with several options in different cities or categories. Below, the RIU Hotels and Resorts ad displays resort features in the headline and in the primary text.

Each creative features a different hotel. However, the overlay creates a consistent look and provides essential information like hotel names and prices.

Dynamic product ads for real estate

For real estate agents who frequently promote listings, dynamic product ads can be a huge timesaver. Below, the Carpenter Realtors ad uses dynamic copy to list bed, bath, and location data in the headline.

As you can see below, many Carpenter Realtors ads use similar primary text too. But rather than repeating the exact same copy, each ad uses dynamic copy to highlight listing info.

How to build a dynamic product ad campaign

To run dynamic product ads, you need a product catalog, a Facebook pixel, and an ad campaign. Let’s walk through the steps to set up each one.

1. Install a Meta pixel

First, install a Facebook (or Meta) pixel so you can track clicks and conversions on your website. If you run Facebook or Instagram ads regularly, there’s a good chance you’ve already set up this tracking tool.

If not, open Meta Events Manager and select your ad account from the dropdown in the upper right corner. Then click the “Connect Data” button and select “Web” from the list of data sources.

After creating a Meta pixel, you’ll need to install it on your website. Click the “Setup Meta Pixel” button from your Events Manager dashboard to install the code. Follow the instructions to add the code to your website.

Note that Meta typically recommends installing Conversions API alongside a Meta pixel. This workflow creates a direct connection with your server, which results in more accurate data.

Although this step is optional, it may become more critical as cookies are phased out and browsers take a more privacy-focused approach. To configure this tool, click the “Set Up Conversions API” button and follow the instructions.

Sound overly complex? We’re here to help. Reach out to learn how our Facebook ads agency can partner with your team on DPA setup and optimization.

2. Set up a Meta product catalog

An up-to-date catalog is the core of any dynamic product ad. Once again, if you already run sales ads on Facebook or Instagram, you’ve likely already completed this step.

If you’re new to advertising with a product catalog, open Meta Business Manager and navigate to Meta Commerce Manager to set yours up. From the main dashboard (see above), click the “Add Catalog” button. Then choose a relevant catalog type.

The next steps will vary a bit depending on the catalog type you select. If you opt to set up an ecommerce catalog, for example, you’ll see an option to upload product info or to connect an ecommerce platform like Shopify or BigCommerce.

By default, all items in your catalog will appear in a single “All Products” set. In some situations, you may want to advertise all your products for optimal retargeting. But more often than not, you’ll want to advertise certain categories — especially if you have a large inventory.

To configure product sets, go to your Commerce Manager dashboard and open the “Catalog” dropdown menu. Select “Sets” and click the green “Create Set” button in the upper right corner. You can either select items manually or create filters to select items automatically.

3. Create a Facebook dynamic product ad campaign

After you set up a catalog and pixel, you’re ready to build a dynamic product ad campaign. Open Meta Ads Manager and create a new campaign. For the objective, choose “Sales” (formerly “Catalog Sales”). If you see an option to create an Advantage+ Shopping Campaign or use the manual setup, choose the latter.

At the campaign level, toggle on the option to use a catalog. Then choose the right catalog from the dropdown menu. If you’ve opted to budget by campaign rather than by ad set, input a daily or lifetime budget. Otherwise, you can do it at the ad set level.

At the ad set level, select a specific product set if you plan to promote certain items only. However, if you want to set up Facebook retargeting ads for your entire catalog, proceed with the default All Products set.

Here, you can also choose a performance goal and a conversion event. When choosing a performance goal, you must decide between targeting conversion value or number of conversions. For a pixel event, choose “Purchase” if you want to optimize for sales.

4. Choose an audience targeting option

When you run dynamic product ads, Facebook always allows you to target new prospects. If you pick “Find prospective customers even if they haven’t interacted with your business,” you can access the same audience targeting options you’d have with any other Facebook campaign type — including demographics, interests, and behaviors.

But one of the biggest benefits of dynamic product ads is the extra targeting option you won’t get with other campaign types. Choose “Retarget ads to people who interacted with your products on and off Facebook” to get your ads in front of people who have already engaged with products on your website.

Then choose whether to retarget product viewers or people who completed an “add to cart” conversion — or if you want to up-sell or cross-sell similar products to existing or potential customers. You can adjust the retargeting windows to ensure you reach the right audience.

5. Set up a dynamic product ad

The ad setup is relatively easy because you’ve already selected a catalog and product set. All you have to do is choose the ad format (carousel, single image, or collection) that best fits your marketing strategy.

Meta will automatically pull product images or videos from your product feed, so there’s no need to upload additional ad creatives. However, you can make some minor edits to all creatives in the ad. Click the “Edit Creative” button and select an option. For example, you can opt to crop catalog images or add frames.

Next, configure the primary text and headline fields. You can certainly write unique ad copy for any of these fields. But you can always populate these fields dynamically by clicking the plus icon and selecting one of the options from the dropdown menu. For example, you can dynamically insert the product name, price, or brand.

With dynamic ads, Facebook typically defaults to Advantage Destination. This option enables Meta to send potential customers to your website or mobile app when they click or tap on your ad. Make sure to input all relevant destinations before publishing the ad.

Best practices for dynamic product ads

Now let’s go beyond the basics. Use these best practices to optimize your dynamic product ads.

Enable all ad placements

As a general rule, Meta can deliver ads more efficiently with fewer restrictions in place. One of the easiest ways to optimize ad delivery is to allow Meta to use all available placements.
At the ad set level, make sure to select Advantage Placements. This option enables all available placements for the ad objective and format — including the Audience Network.

Once you run dynamic product ads, pay attention to the placement reports. If you notice an underperforming placement, consider removing it from the ad set in question. Just make sure to keep as many placements as possible enabled — at least six.

Exclude audiences strategically

For advertisers, it’s easy to focus on building audiences and adding relevant segments to dynamic product ads. However, it’s just as important to exclude audiences strategically.

The most important segment to consider excluding is people who recently bought from the product set you’re promoting. If they’re unlikely to make another purchase in the near future, including them in your audience will only lead to wasted ad spend.

To exclude this segment, go to the ad set level of the campaign in Ads Manager. Select “Create a Custom Exclusion.”

Then customize the number of days based on your average sales cycle. Keep in mind that this audience segment is dynamic. People will cycle out of it automatically and rejoin relevant audience segments.

Create templates you can easily reuse

If you also advertise on TikTok, Snapchat, LinkedIn, or other channels, take time to design dynamic ad templates you can reuse anywhere. Check creative specs before uploading your product catalog to each social media platform.

Don’t set and forget this part of the process. Pay close attention to the templates that work best on each platform. For example, certain designs or text overlays may perform better on some platforms than on others.

James DeLapa, Director of Digital Marketing at Wrike, explains his team’s dynamic product ad design process.

“We never include text in our product images because it makes them look too busy and takes away from the strength of the product visual itself,” says DeLapa. “But if we’re including video, we always add closed captioning to appeal to users who might be watching our ads on mute.”

Optimize for mobile shoppers

You may design dynamic product ads on a desktop device. However, you should always optimize ads for mobile shoppers. Not convinced? Check the device breakdown in your Ads Manager reports to see what percentage of your conversions come from mobile users.

“Avoid failing to optimize mobile advertisements at all costs,” advises Jason Wise, Editor at EarthWeb. “A lot of internet shopping is done on mobile platforms. A lack of mobile-first marketing can lead to bad user experiences and repel potential buyers.”

Leverage conversion tracking tools

Ads Manager reports can tell you a lot about how your Facebook and Instagram ads are performing. But when you’re serious about investing in Facebook ads, it’s critical to use a conversion tracking tool.

With a third-party tool, you can confirm the validity of Meta’s reports and gain more insight into your conversions. If you’re advertising across multiple platforms, a tracking tool is also helpful for attributing conversions and optimizing conversion rates.

“Tracking is an essential part of any advertising campaign. We use ConversionIQ to ensure we’re tracking all aspects, including dynamic product ads. With these insights, we can see precisely where sales are coming from and how to improve results,” shares Rambod Yadegar, President of HawkSEM.

Don’t rely exclusively on dynamic copy

Using dynamic copy in ads can save you a lot of time and hassle. But it’s rarely a good idea to use dynamic copy exclusively, as it can only say so much.

“Writing convincing promotional copy is crucial,” suggests Wise. “Product titles and descriptions are dynamically pulled; however, promotional text templates need a human touch. Building short, engaging narratives that engage the audience is key. Persuasive calls-to-action (CTAs) are the cherry on top, increasing user engagement and conversion.”

Dynamic product ads checklist

Install a Meta pixel

Set up a Meta product catalog

Create a Facebook dynamic product ad campaign

Choose audience targeting options

Set up a dynamic product ad

The takeaway

Advertisers with large product catalogs can get impressive value from dynamic product ads. But if you want to save time on setup and maximize your return, you’ll want to partner with a seasoned PPC agency.

Our team is here to help. Book a free consultation to learn how our experienced team can level up your Facebook ads.