Starting January 2012, a representative of Facebook recently reported that the social networking mega-site will gradually introduce Sponsored Stories social ads in the news feeds of its users. Now, before the Facebook multitude, with concerns of violation from ad-oversaturation, blow a fuse, it's important to note that these ads arrive with restrictions. They will be clearly marked "sponsored" and set at a rate limit to ensure that Facebook users witness no more than one Sponsored Story a day. In addition, these stories will solely feature friends as the narratives' protagonists, endorsing brands within the news feeds, bravely testing the waters of products, locations, and services before you decide whether it's warm enough to swim.
But, let's step back and clarify: What are Sponsored Stories and where were they pre-news feed central?
Sponsored stories are ads that publicize businesses and brands based on you and your friends "likes." When a Facebook member "likes" a certain brands page, an ad is generated that displays the friends name, photo, and a tagline that proclaims, "Kyle Montero likes Makers Mark" (to use myself as an example). Before 2012, a year that looms inevitably over the near future, these ad stories had been shoed to the far right side of your Facebook page, forced to associate with strange ads of unknown origins. As December gives way to January, these stories will make their way from the dark corners of the Facebook page into the focused light of the news feed. When advertisers pay for these stories, the word "sponsored" will materialize in the bottom right of the story box, to be hovered over and reveal: "This was already shared with you. A sponsor paid to feature it here."
The ability to subtly embed promotional material into the organic flow of a social news feed seems to be a golden opportunity for advertisers. As users feed their appetite by devouring the latest social news, they will undoubtedly absorb these "gentle" promotions. According to a May 2011 study, Sponsored Stories in the sidebar of the page have a 46% higher click through rate than traditional ads. I believe it is safe to say that this number will increase as Sponsored Stories find their way into the news feed.
The question is: how will the users react? In many cases, the presence of ads in what some may consider a "personal" news feed will spark outrage, as users resent the obvious use of their content to make money for Facebook. On the other hand, for those focusing on the free environment that Facebook creates for its users, the Sponsored Stories will be accepted as a "fee" for engagement in the social community. Really, is it that terrible to receive relevant aids generated from friend activity? What it all boils down to is the rate at which these aids are introduced into the news feed. If Facebook can maintain their promised "one-a-day" distribution, come January 2012, the floodgates of a large revenue stream will open, changing online advertising in a significant way.