Meta expands AI-driven ad capabilities to boost retail and ecommerce performance

Meta is rolling out a suite of AI-powered advertising updates across Facebook and Instagram, aiming to enhance campaign efficiency and drive stronger engagement. Leveraging its Andromeda AI model, Meta is refining its ad targeting capabilities to ensure that the right message reaches the right user at the optimal time, ultimately maximizing return on ad spend (ROAS) for businesses.

Meta’s Andromeda system continuously analyzes tens of millions of ads to improve targeting efficiency. Now, with new AI-driven Advantage+ sales campaign enhancements, advertisers have additional ways to increase conversions. A significant expansion includes the integration of Advantage+ Catalog Ads with influencer-driven Partnership Ads, enabling brands to amplify their reach through collaborative promotions.

A key addition is the ability for Advantage+ ads to showcase additional products from a retailer’s catalog, even when a specific product set is being promoted. Early trials indicate a 14% boost in ROAS with this optimization, allowing brands to dynamically serve relevant alternatives that might interest potential buyers.

Meta is also developing AI-generated models to assist in fashion advertising. Inspired by Google’s virtual try-on feature, Meta’s system will allow users to visualize how clothing fits different body types before purchasing. Additionally, generative AI will play a bigger role in ad creation, with Meta testing AI-generated text for catalog ads and refining AI-powered background generation tools.

Retailers can now expand their omnichannel ad strategies, linking digital campaigns to physical store visits. Initially tested last fall, Meta’s omnichannel ads highlight nearby stores with in-stock products, offering potential shoppers direct links to store maps and relevant discount codes. This feature, now rolling out globally, has demonstrated a 12% higher ROAS and a 15% lower omnichannel cost per acquisition (CPA) for early adopters.

“Ads are a critical part of our marketing strategy to reach younger audiences and drive sales,” said Craig Brommer, CMO of American Eagle. “With omnichannel ads, we achieved a 48% higher return on ad spend with our core audience—18 to 24-year-old shoppers.”

To further streamline transactions, Meta is testing a simplified checkout process for Advantage+ Shop Ads. This update directs users to complete their purchases on an advertiser’s website after building their cart within a Facebook or Instagram Shop. The test phase begins in Australia and Taiwan, with plans for expansion based on performance results.

Additionally, Meta will enable advertisers to collect user email information directly through promotion ads, allowing brands to issue targeted discount codes and build customer databases. This feature mirrors in-store loyalty sign-ups, helping businesses strengthen their direct marketing efforts.

For the first time, Meta is introducing ads within Facebook’s notification stream, offering advertisers a fresh placement to re-engage users. These ads will only appear for users who have previously interacted with the brand, aiming to reduce disruption while encouraging conversions. While the feature may provoke mixed reactions from users, it represents another avenue for brands to increase their visibility.

Meta is enhancing Instagram ads by allowing marketers to include multiple landing page links within a single image or video ad. This feature enables users to navigate directly to the content they find most relevant, with early tests showing a 4.5% decrease in CPA and a 3% increase in click-through rates.