Facebook update allows businesses to see if their ad led to a sale

Facebook has launched a new feature that allows its advertisers to know whether their ads led users to shop at their stores. Advertisers are now able to include an interactive map of nearby stores within their carousel ads. Facebook can now track and provide advertisers with information on whether users who looked at the brands' ads on their mobile actually go and visit the physical stores. The update also includes an Application Programming Interface that allows businesses to match their in-store purchase data with Facebook's advertising measurement tool. However, this can only work if the users have given permission for Facebook to collect their location data. 

A new type of Facebook ad shows you nearby stores, then tracks whether or not you visit them.

A new type of Facebook ad shows you nearby stores, then tracks whether or not you visit them. Credit: getty images / Dan Dalton

Facebook's advertisers now have a better understanding of how much of your mall shopping might have been inspired by their ads.

The social network just rolled out a new feature that lets advertisers include an interactive map of nearby brick-and-mortar stores within their carousel ads -- those slideshow-like promoted posts that must be swiped from side to side to view.

SEE ALSO: Google is about to bombard users with more and bigger mobile ads

Facebook can then track whether people who look at these ads on mobile actually visit the stores featured and hand that information (in anonymized form) over to advertisers. That is, as long as it has a user's permission to collect data on his or her location, which must be enabled in a smartphone's settings and the Facebook app.

In some cases, it will even follow your shopping all the way to the check-out counter. The final piece of the update is a new API that lets businesses match their in-store purchase data with Facebook's advertising measurement tools.

That will not only tell companies how many of the people who saw their Facebook ads bought something in their stores but also give them a better sense of the demographic breakdowns of customers.

Physical shopping has long been a blindspot in determining the effectiveness of online ads.

Online sales account for less than a tenth of all purchases in the United States.

Even as e-commerce grows more popular, online sales still accounted for less than a tenth of all purchases in the United States in the first quarter of 2016, according to a May report from the Census Bureau(opens in a new tab).

The vast majority of people still do most of their shopping at brick-and-mortar shops, and of those who do shop online, most prefer(opens in a new tab) to do it on desktop rather than mobile.

Online advertising giants like Facebook and Google know this. That's why they've been looking for new ways to take advantage of the ability to track your location on mobile to better understand how people spend their money off the web and to drive people into physical stores.

Google rolled out a similar ad product last month that lets users search store inventories and companies promote their store locations on its Maps feature. Like Facebook, the company also tracks visits to stores after ad viewing.

Updated Thursday, June 16 10:30 a.m. PST: A Facebook spokesperson wanted Mashable to add that all information Facebook provides to advertisers is anonymous and that location can only be tracked if permission is given for "location services" in phone settings and either "location history" in the Facebook app is enabled or a user happens to use the app in the store.

Have something to add to this story? Share it in the comments.