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January 30, 2014

The Future of Facebook Sponsored Stories

Credit: Matt Harnack / Facebook

Sponsored Stories appeared, to some, to be the online equivalent of a creepy ex. They stalked you around Facebook, making note of what you liked and didn’t like, and broadcasting it to the world via ads on other people’s news feeds. Like that ex who just wouldn’t go away, there was no avoiding Sponsored Stories.

Soon Sponsored Stories will be no more. Now that Facebook has decided to eliminate the controversial ad program, which some claimed violated users’ privacy, the question is what the legacy of sponsored stories will be. Can Facebook pinpoint the reasons the idea didn’t work out and learn from them? Or will the company plow ahead with other ad options that repeat the same mistakes?

The idea behind Sponsored Stories was peer engagement. The thought was that if you saw one of your friends liked a product, you’d be more likely to like it too.

Sponsored Stories will continue until April, when they will be discontinued. Facebook said in the blog post earlier this month announcing Sponsored Stories’ retirement that it will continue to experiment with ways to integrate its users’ data into ad programs, so clearly the company is not backing down from the whole privacy issue. Here’s our take on what’s next for Sponsored Stories and Facebook advertising.

Sponsored Stories that Worked

Sponsored Stories lasted for more than two years, so clearly the program worked in many ways. Facebook was eager to prove that it was a good idea, hoping that advertisers’ success stories would drown out all the complaints over privacy (more on that shortly).

Facebook’s own research found that Sponsored Stories were both more engaging and cheaper than the average Facebook ad. At launch, early Sponsored Stories sparked a 46 percent higher click-through rate than standard Facebook ad units, at a cost of 20 percent lower per click.

The beauty of the idea behind Sponsored Stories is that it really did fall on the advertiser to create good content. The endorsements they received were organic, and only came when people liked or responded to a post. That meant that if they posted unengaging, uninspired content, they wouldn’t get the positive feedback that led to the Sponsored Stories ads.

Some advertisers reported extremely favorable results for Sponsored Stories. For instance, used guitar seller Reverb reported that it gained 30,000 likes from Sponsored Stories in a very small time frame. Facebook offered so many different forms of Sponsored Stories (including sponsored events, check-ins, poll questions, offer claims and game play) that there really was something for every advertiser.

Privacy Backlash

What led to Sponsored Stories’ failing was the privacy issue. Privacy advocates objected to people’s images and opinions being used in advertising with their tacit, but not express, consent. They argued that people who didn’t understand or follow Facebook’s inner workings would not realize their likes and comments could be used in ads, and therefore their privacy was being violated.

Privacy groups agitated for a class action lawsuit against Facebook, which it settled out of court for $20 million last August. It was just the latest in a long series of privacy dustups to hit the social network, and it won’t be the last, but it did signal the beginning of the end for Sponsored Stories.

So What Ads Still Work on Facebook?

With Sponsored Stories heading off the site soon, many advertisers are wondering what options are still available to them. Here’s a rundown on other types of ad programs that Facebook advertisers can continue to use; most of them are available in mobile or desktop options:

  • Page ‘Like’: These are the standard advertisements you see on the right-hand side of a news feed. They give a short description of the company and invite you to “like” their page.
  • Domain: Domain ads are similar to page likes, in that they appear on the right side and invite clicks, but they lead people to the advertiser’s actual web site rather than their Facebook page.
  • Page Post: This allows you to promote something that has recently been added to your page in an advertisement. Say you have a great infographic that you’d like to share. You’d use a page post ad to get a preview of that infographic into people’s newsfeeds. You can promote photos, text or videos in these ads.
  • Mobile App Install: These ads invite users to install a mobile app for your company.
  • Event: If you have an upcoming event, you can promote it on Facebook with the name, date and time, as well as an image.
  • Offers: Essentially an online coupon, this ad promises anyone who clicks on it a special offer, such as $10 off their first order from the company.

Peering Into the Future

Even though Sponsored Stories are being phased out, there’s no reason to believe that Facebook is done trying to leverage people’s personal information into advertising. In fact, the company said as much in its post about suspending the program. The social networking site believes that it can draw in more advertisers by trading on the wealth of personal information it has gathered about its users.

Using personal information to target ads results in greater click-throughs and, ultimately, better conversion rates because you’re actually advertising a product the person is likely to buy. And those two things lead to a greater percentage of return advertisers, which is exactly what Facebook is after.

For example, if Facebook notes that you have ‘liked’ the magazine Runner’s World as well as a bunch of race pages, it will start serving up ads for running shoes and exercise machines in your feed and on the right side of your page. It monitors what you click on, and if you do happen to visit any of these advertisers, it will note how well that worked when it serves up ads to other running enthusiasts.

So while people may not see their friends’ smiling faces atop advertisements anymore in your news feed, Facebook will still be using those ties to create more effective ad programs for advertisers. Expect announcements about those new programs soon.

 

Adrienne Erin writes twice a week for SiteProNews about practical SEO advice and news that can help organizations like The Jay Group succeed in their marketing endeavors.


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Adrienne Erin is a blogger and Internet marketer for what she thinks is one of the best SEO companies out there. When she's not blogging about tech and social media, you might find her practicing her French, whipping up some recipes she found on Pinterest, or obsessing over vintage postcards and stamps.

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