Facebook’s New Ad Source

This morning, Facebook unveiled a new way of reaching and marketing to customers through a product called Sponsored Stories. Basically, it allows companies to turn likes, check-ins, page posts and certain actions within apps into ads that appear on friend’s pages. So rather than just showing up in a news feed, ads are going to be generated using the same language as the post or check-in, and these ads will appear on the right hand side as a “sponsored story”. This example of a sponsored story below is driven by a check-in:

As Ben Parr noted in Mashable today: “Facebook’s roster of launch partners includes Coke, Levi’s, Anheuser Busch and Playfish. Also, the social network is partnering with a slew of nonprofits for Sponsored Stories, including Donors Choose, Girl Up!, Malaria No More, Amnesty International, Women for Women, Autism Speaks, (RED), Alzheimer’s Association and UNICEF. However, anybody will be able to bid on Sponsored Story slots (by a per-impression and/or a per-click basis) starting January 25.”

From a revenue generation perspective, this is going to be a huge win for Facebook. It’s a great way to make money off of publicly available information, and maintain the authentic voice of its users within those ads. For companies, however, there is surely a bit of danger here. While “likes” are generally good bets on positive feedback, there is a risk that negative comments as sponsored ads could lead to embarassing PR situations.

In our client work, we tend to see many negative comments, not only on page posts, but also with check-ins. While it is important to be open to negative feedback, the possibility of accidently turning complaints into ads may be inevitable… and yet avoidable.

Imagine a CVS ad that reads: “Stuck in line at CVS again” or an ad that reads: “Good coffee, but I hate the people at Starbucks”. What type of reaction would that drive? This type of “mistake” is a lot harder to recover from than a Tweet or Facebook message that a community manager can react to, and the reach of such an ad could have the potential to go viral.

With this in mind, it may be safer to use “Sponsored Stories” when individuals “like” a product rather than some of the other user actions that drive these new ads. It will be interesting to see the volume in revenue of these ads over the upcoming months, as well as the types of actions that companies buy to deliver the ads.

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