Neworld, Great relationships build great brands

Back in December I posted how Facebook were trialing new advertising formats. It would seem those trials have been successful as Facebook are launching Sponsored Stories as new advertising format for brands. These sponsored stories are items that have already been posted to newsfeeds by fans, they just re-appear in the right hand side panel with the heading ‘sponsored stories’ above them.

The Fan Generates The Copy

Whats clever about this move is that the fan generates the copy for the sponsored story and their name remains attached to it. Seeing your friend endorse a brand is a fairly powerful message for you to at least click on the link. The sponsored story is something which has already appeared in the newsfeed of friends, and it will only appear as a sponsored item to those same friends again. It’s a way of brand related messages rising above the clutter of Facebook.

There’s four types of sponsored stories available at the launch – likes, checkins, actions within custom applications and Page posts. These actions by fans can be turned into sponsored stories.

Privacy

The one issue that always raises its head with Facebook is privacy. Just last week they had to roll back on a decision to share mobile numbers and addresses of fans with developers. However it does look like they have addressed any possible privacy concerns from the outset with sponsored stories. For one, the story will only appear to those who have access to the newsfeed in which it first appeared, in other words a sponsored story will never appear to someone you don’t know. Also Facebook has given fans an opt out choice (although I doubt this will be openly promoted to fans).

Monetizing Facebook

This is just the latest way Facebook can make more money from its massive user base. By the end of the year Facebook users will top the 700 million mark, an astonishing number and it has a lot of data on these people. The launch of the new Facebook profile, with an emphasis on our own personal bio’s merely provided Facebook with greater background information on us, which can then be used to target advertising better. We’re only going to see more and more ways for all this social data to be used by brands to advertise. Whats interesting about this format is its the first step for Facebook to not include any external elements. The copy is generated on Facebook by a fan, linked to a brand’s page (or app) on Facebook and then it becomes a sponsored story linking to a page within Facebook. At no point is their any reason to visit any external website. This puts an emphasis on a brand’s Facebook presence regardless of any other online activities they may be doing.

Fan Value

I’ve wondered for a long time if fans will eventually have a monetary value to Facebook and this might be a step in that direction. If a fan has 1000 friends are they more valuable to people with 100, after all recruiting that one fan with 1000 friends may be easier than recruiting 10 people with 100 friends. Not only that but the person with 1000 friends may be seen as an influencer, who could make things go ‘viral’ easier and so their endorsement may be worth much more.

Costs to Brands

The format is being rolled out from today with partner brands and will be available to all very soon. They will carry the same cost-per-click or cost-per-impression as normal Facebook advertising. While their reach may be somewhat limited (it’s only friends of the person who carry’s out the action that will see it) they do come with a deeper connection as they highlight the activity of a friend with a brand.

What Do The Fans Think?

The success of Facebook is dependent on it’s user base, if they were to ever go, so too would the advertising revenue. Even though that’s unlikely to happen, how would fans feel about their content being used to market a brand to their friends. It’s all well and good if its a brand ambassador, but not all people are. Also what if a fan ‘checks-in’ to a location but mentions the brand in a negative fashion. One aspect to these ads that has been mentioned over and over is that the advertiser has no control over the content.

Here’s the official video for Sponsored Stories from Facebook.