Facebook to Introduce Sponsored Stories to News Feed in 2012

Facebook will begin showing Sponsored Stories in the News Feed in early 2012, the company tells us.

With Sponsored Stories, companies can pay to promote organic user activity such as Liking a page, checking into a place or playing a game. These stories will be labeled as sponsored and will be the same size as other News Feed items. At launch, users will see no more than one Sponsored Story in their feed each day.

Though Facebook has not experimented with advertisements in the News Feed since 2007, we don’t expect this move to result in major user backlash. It is likely to be a boon for advertisers and pave the way for promoted content on mobile devices.

The social network is taking a cautious approach to maintain a positive user experience while giving advertisers more options to spread their messages. The only paid content users will see in their News Feed will be Sponsored Stories about friends’ activity or posts from pages they are already connected to. Pages that want to run campaigns to get new fans will not be able to advertise directly in the News Feed. We anticipate Sponsored Stories in the News Feed will have much higher click-through rates and conversions than units on the side of the page.

Here is a mockup of the feature from Facebook:

Some users might be frustrated to see sponsored content in their feeds, but we don’t anticipate this changing how most people use the site. Twitter started putting Promoted Tweets directly in users’ timelines this summer. While some users complained initially, there is no evidence to suggest this has affected overall use or growth. Facebook was also able to add Sponsored Stories to the canvas app Ticker and homepage Ticker without much noise from users. Introducing these ads in the main News Feed was a logical next step. Although the company said Sponsored Stories would not yet be included on mobile devices, we suspect the social network will do this soon.

Facebook has experimented with social ads in the News Feed as early as 2006, when users who joined sponsored groups would be notified when friends interacted with the same page. When Beacon launched in 2007, Facebook also gave advertisers the option to put messages in the News Feed. The current iteration of Sponsored Stories is more considerate of user experience because people will not see items that wouldn’t otherwise appear in their feeds organically.

There is not yet an official launch date for when these ads will enter the News Feed. Facebook tells us advertisers will not be able to specifically pay for News Feed placement and that Sponsored Stories will continue to be shown in other locations on the site. The company is still determining how these ads will be priced, whether they are premium ads or available in the self-serve Marketplace tool. Ben and Jerry’s has already partnered with Facebook to run Sponsored Stories that may run in the News Feed in 2012.

Users will be able to provide in-line feedback on Sponsored Stories, as they currently are able to with ads. Users can hide individual advertisements or all ads from a particular advertiser. Facebook also occasionally allows users to indicate whether an ad is misleading, offensive, repetitive or uninteresting, among other options.

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