From 11 January Facebook started rolling out (to a limited number of Facebook users in the UK, US, Australia and New Zealand) Sponsored Stories ads in news feeds.
What are they?
Sponsored Stories are posts from your friends or Pages on Facebook that a business, organization or individual has paid to highlight so there’s a better chance you’ll see them. They are regular stories that a friend or Page you’re connected to has shared with you. As an example, if a friend likes the Starbucks Page and a story about it is published in your News Feed, you may see a sponsored story about it if Starbucks has opted to promote it.
Note: This ad type already exists but is confined to the right sidebar. It’s the filtration of the ad within the users news feed that is new to Facebook.
How do they work?
1. Users interact with a business – i.e, by liking a page, receiving a news feed update from a Page they already Like, checking in to a local business, sharing content from an external website, or using an application
2. An organic news feed story is generated about that action
3. Advertisers can pay to feature that story more prominently – this is the sponsored story ad
These ads only feature stories about friends or Pages that users already like. Users can see ads from both pages they have and have not “liked” elsewhere on Facebook. However, marketers only pay for sponsored stories to be featured in users’ news feeds if they have explicitly “liked” the page. In testing users didn’t actively protest having updates of their friends adulterated with ads. After all, the ads are only showing content that could already appear in the feed.
While users are attentively browsing photos and updates from friends, they’ll end up consuming ads as well. The ads look so similar to organic news feed stories and are only marked in the bottom right corner — the last place a user’s eyes will scan. That means users probably won’t notice the difference until they’ve already internalized an ad’s message.
When do they appear?
Initially no more than one ad per day will be shown to users.
Can users choose to see them?
Users won’t be able to opt out of seeing Sponsored Stories in the news feed or having their activity used in them, but they will be able to hide or remove posts if they choose. They also can choose which of their contacts’ own brand interactions appear.
Public opinion
Some users will likely be outraged by the presence of ads in the news feed, as well as by having their content so directly used to make Facebook money. Others may argue that Facebook provides a valuable service to users for free, and is therefore entitled to showing ads where it wants to. Most would rather see Sponsored Stories that inform them about the activity of friends than traditional ads that can be much less relevant.
Media buy
Sponsored Stories have been heralded as a highly successful ad format for the social networking site. Facebook hasn’t finalized whether advertisers will have the option to specifically request placement in the news feed. Studies have shown sidebar Sponsored Stories have a 46% higher click through rate than traditional ads, and you can expect the CTR of news feed Sponsored Stories to be even higher.
If Facebook can weather the protest of users who want an ad-free news feed, it will have managed to open a significant new revenue stream. The launch of news feed Sponsored Stories could also be a big turning point for online advertising. With prominent placement on one of the world’s most visited sites and their appeal to viewers from including the faces and activity of friends, Sponsored Stories news feed ads could help Facebook steal ad spend from paid search and traditional display such as Google AdWords and AdSense.
How does it affect clients?
There is still much information to be provided by Facebook (functionality and content) on these ads but once fully rolled out on Facebook these ads should be extremely effective due to their targeted nature. Businesses will need to analysis the types of interactions users have with their brand and provide tailored content accordingly (i.e., if it’s an ad that is related to a user’s ‘check in’ status at a coffee shop the ad could say ‘join your friend, and get $X off your coffee’ OR if the user has already liked a coffee shop page the ad could promote new types of products.
