This week, Facebook launched a new ad unit
called “Sponsored Stories” that turns Page updates, as well as Places, Checkins, Likes, and application activity by users into advertisements.
Sponsored Stories will initially be available through Facebook’s managed brand advertising services for display on the home page and profile, and in the coming weeks it will become part of the self-serve performance advertising tool for display across the site. Launch partners for the ad unit include Starbucks, Coca-Cola, Levi’s, and Anheuser-Busch, as well as social good organizations (RED) and UNICEF.
The social media giant announced the new feature for advertisers on Monday in an "Introducing Sponsored Stories" video
posted on its website. Facebook did not say in the video when the Sponsored Stories ability for companies would go into effect, but it is highly likely that advertisers will take this feature.
Facebook has been testing the ad unit
for a few months and says it has resulted in brand lift and increased engagement, ad recall, and likeliness to be recommended to friends for the organizations that tried it.
HOW DOES IT WORK:
When a user checks in to a claimed Place, Likes a Page, or shares content to the news feed from an application that has paid for Sponsored Stories, that activity may appear as an advertisement to their friends. The ad is shown in special right sidebar module, and displays the user’s name and photo, any additional context or friends they’ve tagged, a picture of and link to the advertised Facebook Page or app, and the Likes and comments from the original post.
Similar to social context ads
and Ads for Applications
that Facebook launched this year, Sponsored Stories increases the relevance of advertisements to users by displaying a recommendation from one of their friends. Seeing that a friend has checked in at Starbucks is a much more compelling reason to visit than a standard advertisement telling a user to go get a coffee.
Jim Squires of Facebook Product Marketing says, “all privacy settings are honored,” so the ads will only be visible to those who can see the original post they draw from. This means users will only see Sponsored Stories by their friends who haven’t restricted them from viewing their shared content. Advertisers can overlay any of Facebook’s standard demographic targeting parameters to further refine who sees a Sponsored Story. Normal privacy settings apply, so a friend who does not receive your updates will not get ads with your information, and a friend not included in your news feed will not appear in your Sponsored Stories. Sponsored stories will include the original users’ comment attached with the activity, so others will be able to flag negative brand references — for example, if someone re-posts an article with the comment, “This is the dumbest thing I’ve ever read.”
Page post Sponsored Stories are more straightforward. Pages can buy greater distribution for their latest news feed update, ensuring an audience for a particularly important link or announcement. Users who Like the Page will see the post in Sponsored Stories without having to Like it or take any other action.
Sponsored Stories co-opt a user’s actions, voice, and identity to create ads that resonate with their friends. While Twitter has diluted its content stream with promoted tweets in order to make money
, Facebook may have found a significant new revenue stream without selling out the beloved news feed. (Twitter is projecting $150 Million in ad revenues for 2011).
According to the video from Facebook
, initial case studies showed improvements in brand lift, ad recall, and likeliness to recommend to a friend.
“Anything that lets brands amplify social action or word-of-mouth is a great thing,” BuddyMedia CEO Mike Lazerow commented. “This product lets brands further leverage their investment in Facebook and make it louder, amplified and more noticed — which, ultimately, is a great option.”
Sponsored Stories has a lot of similarities to Twitter Promoted Tweets
. Both are trying to use content from within their networks and turn them into advertising dollars. The key difference between Sponsored Stories and Promoted Tweets, is that the user not the advertiser
defines the advertised content in Facebook’s format.
Twitter's Promoted Tweets service, introduced last spring, takes content that would have appeared within the service's search results and highlights that content through a top-of-the-page ad showcasing the promoted tweet itself. In November, Twitter announced it would begin rolling out the Promoted Tweets into users' timelines, too, through its partner, HootSuite. But Promoted Tweets could only be selected from the advertiser's account or those affiliated with it, not repurposed without human intervention.
Thanks to the Facebook/Microsoft partnership, these types of personalized recommendations could soon find their way into Microsoft's Bing search engine, for example. That could be a good thing for personalized search.
Facebook’s “Like” is constrained by the fact that most people aren't going to like boring or bad things. But by including check-ins and shared links in this advertising initiative, it's easy to imagine a future where a Bing search for a refrigerator delivers a results page that tells you: "John just checked in to Sears on Monday" and commented "great appliance sale!"
Here’s an example of an action that could potentially be sponsored:
And here’s what it might look like as a Sponsored Story:
Facebook plans to educate users about how Sponsored Stories respects their privacy through a blog post and explanation in the Help Center. Some users may not want their content turned into ads, and there’s no way to opt-out or turn off Sponsored Stories, so some protest should be expected.
This new form of advertising is far more intrusive than Instant Personalization, which simply shared select profile info with partner websites on an opt-out basis. Instant Personalization received federal regulator attention, while this move seems likely to fly under the radar, despite the fact that it co-opts your content for ads with no opt-out option at all. The world's most popular social networking website has recently been under scrutiny for allowing Facebook app developers and external websites access to user information such as phone numbers and addresses
. After one day, Facebook backpedaled on the decision, rescinding the access, but has said it plans to allow developers and websites access to the personal data again soon