Facebook has classically been very reluctant to adulterate its social content streams with advertisements. But today, Facebook begins showing its Sponsored Stories ad units in the site-wide Ticker of real-time social activity stories. This will open lucrative new ad inventory, including placements on the home page. While they are are paid ads, Sponsored Stories display the activity of friends or Pages users Like so they’re typically less annoying than standard ads. Still, the commingling of these commercials with content could offend users not expecting ads to escape their cage in the lower right sidebar.
Last year, Facebook launched Sponsored Stories as its next step in social advertising, The ad unit lets brands buy additional exposure for mentions or interactions with them that typically appear as news feed stories. For 8 months these only appeared in the sidebar. Starting in August, though, Facebook began mixing Sponsored Stories about which games friends were playing into the Games Ticker that appears to those using Facebook canvas apps and games.
This experiment seems to have gone without significant backlash, leading Facebook to allow Sponsored Stories to appear in the standard Ticker that shows activity stories such as users listening to songs, reading news articles, leaving wall posts, or adding new friends. Facebook PR’s Annie Ta tells me “Starting on Monday [today], we are continuing to slowly roll out Sponsored Stories in ticker across Facebook.”
Sponsored Stories have been shown to receive a 46% higher click through rate than standard ads, indicating they provide a better user experience and could attract advertisers. Facebook’s ad czar Gokul Rajaram says he envisions a future where all of Facebook’s ads include social content or context. In fact, the majority of ads on the site already do.
Twitter recently began displaying promoted tweet in-stream ads, and reactions haven’t been as overwhelmingly negative as many would have expected. Facebook may see using Sponsored Stories rather than standard ads, and placing them in the Ticker rather than the primary news feed as the proper balance between monetization and maintaining the sanctity of content. I think Facebook is wise not to have injected ads into the primary news feed, as the quality of the news feed experience is a core reason the site is addictive.
We’ll be watching for reactions as the rollout of Sponsored Stories to the Ticker continues. While the number of ad spots in the site’s sidebar is relatively stable, Facebook will be able to tweak how frequently ads appear in the Ticker. With proper optimization, Facebook may be able to fly just beneath the radar of widespread discontent while boosting ad revenues that could please investors waiting for its IPO.
Facebook is the world’s largest social network, with over 1 billion monthly active users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 weeks, half of the schools in the Boston area began demanding a Facebook network. Zuckerberg immediately recruited his friends Dustin Moskovitz, Chris Hughes, and Eduardo Saverin to help build Facebook, and within four months, Facebook added 30 more college networks. The original...