Sponsored Stories are going to be Facebook’s Killer Ad Unit

By Rob McNair

Word of mouth has always been one of the most powerful selling formats. Social media then amplified its effect, as people’s networks spread from the refines of geography to global interpersonal networks built on shared social connections and, increasingly, interests. What Paid Organic does is give companies the ability to amplify and repeat the exposure of word of mouth in a way that’s A) controllable and B) traceable.

Facebook was never going to be able to compete with Google on direct response advertisements like AdWords. When someone’s searching for something, they’re more than likely already aware of what it is they’re searching for. Where Facebook has the upper hand is that they can take advantage of, and amplify, the natural curiosity someone has when they see a friends actions. Sponsored Stories increase the likelihood of more friends’ interacting with a brands activity, and as such increasing the effect of this curiosity.

To make the most of Sponsored Stories, don’t try to hyper target ads like you would when using Facebooks direct response or Google AdWords units. Increase the chance of serendipitous discovery by adding in extra layers of random targeting, or by capitalising on the effect of homophily (think “birds of a feather flock together”) by running a campaign that solely focuses on friends of fans targeting without any additional interests/demographic segmentation. By trying to run Sponsored Story campaigns with demographic/interest based targeting you end up overexposing them with something they may not be interested in, leading to increased CPCs and much more negative responses.

Of course, the biggest criticism of Sponsored Stories is that they can seem unethical or creepy. After all, who wants their face displayed alongside a brand? Whilst this is all part and parcel of Facebook’s increasingly intrusive privacy policy, the stats do show that it increases the rate of response dramatically. However, this doesn’t mean you have to disrespect your community, who have let you into an environment they’re sharing with their friends and family. Educate them on what will happen when you’re running Sponsored Stories by sharing blogs on the subject or creating a ‘privacy policy’ tab.

The Internet often doesn’t care for the details, so in summary:

    1. Run a Sponsored Story campaign that targets only based on friends of current fans
    1. Optimise towards engagement, not network size. This is made all the more easier with Facebook’s now including actions other than connections in their analytics
    1. Make users aware that their name and information may be used alongside advertisements for your brands. They’ve already accepted Facebook’s Terms of Service, but offer them the knowledge out of the respect that they’re going to help you capitalise on their identity

The Internet is crying out for a medium that allows brands to build themselves online. Display is often heralded it’s branding capabilities, but let me ask you this one question, can you name one great brand built on display advertising? They don’t even offer a click-through rate anything like what you’d achieve using Google AdWords.

My advice? Move your money to social. With macro factors like the cookie law taking effect, you’ll see and even smaller effect of display advertising in the future. Show me one more online environment where prestigious brands like Burberry and Nike are happy to have their name proceeded by that of another, just as they do with Facebook.com/Nike and Facebook.com/Burberry, and to even include this on further marketing, I’ll eat my hat.

This post was written by Rob McNair

Rob has experience advising some of the worlds most iconic brands. He thrives on helping improving social media knowledge within organisations with the ultimate goal of making theirs brands more social, transparent and accountable.