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Sponsored Stories to Ad-ify Facebookers' Posts

Sponsored Stories to Ad-ify Facebookers' Posts

Facebook users may start seeing a whole lot more ads in their news feeds under the social network's new Sponsored Stories system. When a friend writes a post mentioning an ad partner, the post appears in his or her friends' feeds attached to an advertisement. The system is perhaps less intrusive than past Facebook efforts like Beacon, but there's concern that ad overload could drive some users away.

By Rob Spiegel E-Commerce Times ECT News Network
01/26/11 12:50 PM PT

Facebook is tracking your comments for ad opportunities.

On Tuesday, Facebook announced its new advertising platform, called "Sponsored Stories." The new ads will be integrated near the user's news feed. Advertisements can be prompted by words that appear in apps, statuses, check-ins and "likes."

A Sponsored Story is made up of a post that would normally appear in a user's news feed. A small promotion with a link to company is added to the post.

"Facebook did introduce a new product yesterday," Cyndi Schott, spokesperson for Facebook, told the E-Commerce Times. "It's called 'Sponsored Stories.' It went live yesterday. For a little background, it gives companies another way to do predictable and scalable word-of-mouth marketing on Facebook, and people may see stories from their friends on the sponsored section on the right side of their Home Page."

Sponsored Stories are posts you would see normally, only now they will be promoted. "You will never see a Sponsored Story unless you would already see it in your news feed," said Schott. "Same with Sponsored Stories others could see from you -- they would have to already be able to see them in their news feed. So a Sponsored Story would only show up to users that were supposed to see the original post."

The Next Step in Facebook's Growth

Facebook shut down one of its advertising programs called "Facebook Beacon" in 2009 after a class action lawsuit. Beacon would report user activity from sites outside of Facebook.

"This is a whitewashed version of Facebook Beacon that drew so much controversy before," Azita Arvani, principal of Arvani Group, told the E-Commerce Times. "Facebook is persistent and aggressive with use of their user's information. And they will continue to push the envelope on that front, since there is a lot of churn elasticity with their users."

The difference with Sponsored Stories is that users are already willingly broadcasting their relation with a company. "With Sponsored Stories, the users have already checked into a business or made a recommendation of some type," Arvani said. "So one might argue that using that information should not be a breach of privacy since the users have already volunteered their affinity with that brand."

Some users, however, may have a problem with the site using them for advertisements. "The liberty for a brand and Facebook to extract out a user's affinity information and frame it in a prominent spot for user's friends to see, should come with more responsibility," said Arvani. "For one, the user should have an opt-out option. If Facebook and advertisers are making money out of the user's recommendation, the user should have a say as to where that recommendation would show up."

Ads May Annoy Users

Facebook will need to make sure ads do not take up too much space, as part of its appeal is its streamlined interface.

"If it does start junking up everybody's Facebook wall, it will have a negative response," Giovanni Gallucci, consultant on social media for You+Dallas, told the E-Commerce Times. "We've seen how aggressive and how quickly users can gang up on an advertiser."

Sponsored stories could be a useful strategy Visit the VMware Tech Center to increase ad revenue for Facebook, or it could annoy and anger users.

"This is a time bomb waiting to happen," said Gallucci "If I don't like what's going on with advertising, I just start talking down the advertisers on the site. Facebook is changing its rules after the fact to let advertisers become more intrusive. I don't think a lot of people will like it. But advertisers will try it."


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