Facebook rolls out ‘Sponsored Stories’: What you need to know

Facebook has this week announced a new ad format, already rolling out across the site from 25 January, which will turn some of your friends’ shared activities into promotional content.

Sponsored Stories is the new ad unit which will turn four specific types of user actions into featured advertisements: Likes, Places checkins, Actions within custom applications and Page updates which would normally show up in a user’s news feed.

So if a company has a custom Facebook app, it can promote user actions within those apps and add its branding, as well as on posts where users mention brands or places they like, or on the wall of a brand’s fan page.

Companies can choose to take some of these user actions linked to their brands, and pull the updates out of the regular News Feed and feature them in the column on the right hand side of the page where the Sponsored Stories slot will be displayed. The ad will display 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.

For example, here is a simple News Feed item about a Facebook Places check in at Starbucks:

And this is what the Sponsored Story from that News Feed item would look like:

“It’s about taking the word of mouth recommendations and endorsements that are happening across Facebook every day and increasing the distribution of those,” explains Jim Squires of Facebook Product Marketing.

The ad format will make the most out of user actions as the advertiser does not control the message – it’s all about driving increased traffic through recommendations from your trusted friends. This differs from Twitter’s Promoted Tweets, where marketers write the content themselves and control it.

The idea harnessed by Facebook here is that you are more likely to try a new brand or place if your friend is personally endorsing it through their own experience. It’s a simple and logical idea and does hold a lot of weight, although some users might not like their posts being hijacked for commercial purposes.

The Sponsored Stories will only be displayed to users who are your accepted friends, and vice versa, so your details will not be shown to people who don’t already have access to your profile and posts.

Squires assures users that all existing privacy settings are honoured, and users can opt out by choosing not to include certain bits of data, such as their location, in their News Feed (which one could argue is not wise anyway). It should be possible to adjust Facebook’s privacy settings to prevent updates from appearing as Sponsored Stories for users who don’t like the idea of seeing the things they post to their News Feed being used as promotional tools.

Make sure you have a very careful read through Facebook’s privacy policy and controls, and know exactly who is seeing your information and when Sponsored Storied have been rolled out on your account.

“Because this is an extension of the News Feed directly and you always, as a user, have complete control over what’s going to show up there and who you’re sharing the information with, and because it’s different from our ads in the sense that the marketer can’t control or change anything that’s happening — they can just feature it or highlight it — we view it as a very different product than our ad products,” Squires explains.

The Pro’s

• Simple, effective way of harnessing a less obtrusive means of participating in the social media space
• Ordinary Likes and other endorsements by users can easily get lost in the News Feed – Sponsored Stories will ensure they are more eye-catching and likely to be noticed
• Makes the most of trusted, word-of-mouth recommendations between friends which can be very powerful
• Sponsored Stories will not increase the ad load on the site, according to Facebook – ad messages that are purely promotional copy will be displaced in favor of ads that report on user actions.
• Ads will not clog up News Feeds by being displayed on the right, where users are used to ads being displayed anyway

Facebook has been intelligent here, by simply making a small change and improving a functionality which users have already accepted and used widely

Users are likely to give more consideration to the brands and places they recommend if they know it’s being used commercially, so the Stories you see should be trustworthy and relevant.

The Con’s

• May cause a backlash among users who don’t want their personal updates to be linked to commercial products and services
• Risk of negative commentary being linked to your product, if the post is a complaint not a recommendation e.g. Person X checks in to a restaurant and posts “Just got served raw chicken!” that’s not good. Advertisers would have to embrace the existence of negative comments, or limit their participation to Likes which are by definition positive.
• Brands and marketers could be put off by the lack of control over content
• Product endorsements by users already exist through Likes etc, so Sponsored Stories may not apply to smaller brands who don’t want to pay for something they can get for free anyway