Facebook is launching "Sponsored Stories" ads that feature users' organic interactions with brands, like check-ins or page likes, in order to leverage the social context and recommendations from friends. This utilizes earned, owned, and paid media together. For brands, it means their message is out of their control but could reach more people. Users may feel their privacy is invaded but could also discover new brands from friends' recommendations. Marketers should test Sponsored Stories carefully and continue engaging fans authentically.

1. POV: Facebook Sponsored Stories
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2. Overview
Any successful social media campaign leverages the relationship between earned, owned and
paid media. Facebook’s recent launch of Sponsored Stories aims to integrate all three media
types into one ad unit. These units pull user-generated stories, including application
interactions, Places check-ins, page Likes and page posts—earned media that often gets lost
within a user’s News Feed or does not rank as relevant enough to appear at all—and gives
them prominence on the Facebook homepage in the form of a “Sponsored Story,” on the right
side rail of the page. What these ads aim to do is capitalize on the social context that provides
a lift (as measured in the Nielsen BrandLift Study) in engagement and ad recall. By utilizing
organic user actions, or earned media, within a paid channel, brands e ectively drive their
owned media, their respective Facebook community. This layer of social context has been one
of the distinguishing factors for Facebook ads, and Sponsored Stories is the next natural
evolution of the network’s ad platform. By leveraging advocacy within advertising, Facebook
amplifies the digital word of mouth that incentivizes users to discover and engage with new
brands.
How Sponsored Stories Work
Basically, brands are paying to feature organic user actions within these ads, leveraging those
actions—like check-ins and Likes—that advocates participate in on behalf of brands. For
example, when users visit a Starbucks and check in with their smartphones, they choose to
broadcast their location to all those within their networks. Normally, this would only appear on
their friends’ News Feeds, but with the new Sponsored Stories unit, it will run in an ad on the
right-hand column of the site. Essentially, Facebook is banking on the power of social context
and the power of a friend-sourced brand recommendation to incentivize users to also Like that
same brand.
©2011 22squared

3. User Implications
Positive:
• Users will be able to see their friends’ interactions with brands and have the ability to
interact with those stories, similar to the way they are able to do so in the News Feed.
• These Sponsored Stories are essentially ads that are automatically generated by users,
leveraging organic actions done by brand advocates.
• Sponsored Stories gives more prominence to friends’ interactions with brands. Pushing this
social context should incentivize users also to interact with these brands as they are receiving
social recommendations from their friends (who, Facebook believes, carry more credibility
than brands themselves)—potentially helping users discover new brands to identify with.
Negative:
• Users may feel their privacy is violated by brands that are monetizing users’ activities to
promote themselves.
• Users may want some kind of compensation for their participation or the ability to opt in/out
of appearing in Sponsored Ads.
Brand Implications
Positive:
• As mentioned before, these new ads are not generated by the brand but, instead, simply
feature users’ interactions with brands. The success of Sponsored Stories, then, depends
largely on a brand’s active users among the total fan base. Therefore, the brands that will truly
be able to leverage these new types of ads will be those brands that make a conscious e ort
to engage with their Facebook fans in a positive manner. This can be coupons, promotions,
assistance if problems or miscommunications occur, etc.
• Now, more than ever, it is becoming crucial for brands to approach their Facebook fan base
strategically, specifically in regard to communication tactics.
• Positive stories posted by fans now have a second chance at life if marketers choose to
feature those stories to promote their brands.
Negative:
• Gives even less control to brands—no copy, CTA, headline or branded image. Sponsored ads are paid
for, but give brands less control over their message—it is all user-generated content, just centered
around a certain brand.
• There’s the possibility that stories won’t align with the brand’s message or will even be negative—it
doesn’t happen often, but marketers need to be aware of the possibility.
©2011 22squared

4. • Initial reach will be hard to determine. Since the ads are targeted at friends of the person interacting
with the brand, it likely will not reach as many people as if more broad demographics like age and
interests were being used.
• More likely than not, these ad units (especially considering placement on homepage vs. ROS) will be
expensive, regardless of what pricing model Facebook sells at. Therefore, running a Sponsored Stories
campaign should be part of a holistic Facebook and social media strategy. Prices will likely vary
depending on whether ads will appear on the Facebook homepage or on particular users’ profile pages.
• The prospect of using paid media to amplify activity and interactions among users centered around
the brand blurs the line between paid and earned, and could ultimately come o as inauthentic to users.
Considerations
• Buying Sponsored Stories should be attempted only by brands with a dedicated team
managing their Facebook page. This is not a campaign for a brand that has never strategically
worked in the social media sphere before. A clear message, brand voice and overall social
media strategy should already be firmly established before paying to leverage earned media
for a brand.
• Marketers should not try to solicit more posts from people interacting with the brand in
order to inflate their repository of Sponsored Stories. The strength of earned media lies in the
authentic. Continue engaging fans with content that is relevant to them and then use those
organic reactions that most positively react and align with the brand’s core messages.
• Begin with smaller tests of Sponsored Stories and track the results compared to other
Facebook initiatives. Once there is data to support the success of Sponsored Stories, larger
budgets can be allocated toward purchasing space for them, and strategies to e ectively
utilize the stories can be refined.
• Considering that these units will only be targeting Friends of Fans, adding keyword or
demographic targeting overlays will limit the overall audience base. Marketers must be
strategic about prioritizing targeting constraints to e ectively leverage these units and deliver
impressions to the most relevant audience.
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©2011 22squared