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Retailers skimp on Facebook mobile budgets, missing growing opportunity to drive sales

While sophisticated retailers are leveraging mobile ads on Facebook to drive in-store traffic or deep link mobile application ads to enable purchases from within an app, on the whole the retail sector lags behind other marketers in targeting the social network?s large mobile user base.

Retailers are allocating less than 20 percent of their Facebook budgets to mobile compared to the average of around 40 percent, according to recent data from Nanigans. Those retailers who are doing a good job are moving beyond driving app downloads from Facebook to run hyperlocal ads that drive in-store traffic or deep-linking mobile app ads to enable purchases from within an app.

?The retailer can now feature a specific product or promotion and then drive users who have the app installed directly to the product or promotion page within the app itself,? said Todd Herrold, senior director of product marketing at Kenshoo Social, San Francisco. ?This keeps consumers highly engaged with the retailer's brand.

?Advanced mobile capabilities like this are coming fast,? he said. ?Retailers that don't keep up do so at their peril.?

Native ads
With consumers are increasingly shopping with their mobile devices both at home and in store, Facebook mobile ad placements provide some of the best opportunities for retailers to get their messages in front of highly targeted mobile audiences.

In store, they are researching products and prices. They are also posting pictures of products on Facebook and asking for real-time advice from their friends.

Target is currently running an ad in the Facebook mobile newsfeed for Cartwheel, its mobile app for exclusive discounts and sharing their favorite deals on Facebook. The ad highlights a few of the discounts currently available in Cartwheel and includes a link to download the app.

The Facebook newsfeed is a great way for Target to drive awareness for its app as there are more than 469 million daily active users on Facebook worldwide and over 100 million in the United States.

The newsfeed ads are also native, meaning they are integrated into the user experience and are not disruptive the way that some other mobile ads can be.

Mobile ad budgets
With Facebook continuing to improve its mobile advertising offerings - for example, by enabling marketers to target ads based on the products and brands ? the average Facebook ad budget is increasingly skewed toward mobile.

For example, during the second quarter of this year, the average allocation to mobile was 41 percent, up from 30 percent in the first quarter.

However, the numbers tell a different story for retail.

In the first quarter, the mobile allocation was 22 percent, which then dropped to 14 percent in the second quarter and inched back up to 18 percent in the third quarter, according to Nanigans? data.

?We saw a 3x increase in the number of retailers who are able to now track revenue specifically from mobile,? said Dan Slagen, senior vice president of marketing at Nanigans, Boston. ? Very encouraging to see adoption rates at this speed.

?Advertisers should expect to be talking about a return on their investment,? he said. ?Our data suggests that front-loading budgets earlier in a quarter is beneficial from a learnings and performance perspective, and also allows for more flexibility in campaign management.?

Hyperlocal campaigns
One of the biggest opportunities for retailers on Facebook in mobile is driving in-store traffic via hyperlocal campaigns.

Consumers take their mobile phones with them everywhere and reaching them when they are nearby a store with the right offer can help drive sales.

?With Facebook mobile ads, retailers who are looking to drive in-store traffic are able to target specific consumer segments around specific locations at specific times and with specific messages,? said George Manas, New York-based d irector of client strategy and development at Resolution Media. ?As such, Facebook mobile ads can be an extremely potent tool at local and hyper-local levels to increase relevancy, foot traffic, and ultimately sales for their brick-and-mortar stores.

?And given the robust flexibility of the Facebook ads platform, these sorts of localized tactics can be scaled regionally and even nationally,? he said.

?They can also provide invaluable insight into how their messages are resonating with consumers in those locations, how different target segments are performing in those locations and, with the right measurement framework in place, what the impact is on in-store activity .?

The Nanigans data reveals that the Facebook ROI for retailers was 17.9 times higher on iOS for than on Android.

This points to the need for retailers to make sure they understand the differences between devices.

?It's very important that retailers get it right,? said John Lee, senior director of digital marketing at Flightpath. ?With the amount of mobile Facebook users, this is one of the largest mobile ad networks out there.

?Understanding the differences in user behavior between desktop and mobile is not enough,? he said.

?Advertisers need to understand the differences among the various mobile devices. Not just between tablet and mobile phone, but by OS.?

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York