January 2014

Facebook is ending Sponsored Stories

Facebook is changing!

Facebook just announced they were phasing out their controversial but very successful Sponsored Stories ad units as of April. Even though the format received a lot of criticism, Sponsored Stories have always been one of the most easy to use, efficient and cost-effective Facebook advertising formats. The news brought cheers from most members who found them annoying and frustration from most brands that relied on them. Facebook is probably relieved.

Why are they doing it? WHY Sponsored Stories?

In August 2013, Facebook faced a class-action lawsuit over the Sponsored Stories format. Simply, users charged that the ads were a violation of their privacy. The lawsuit was settled for $20 million and forced Facebook to create an opt-out feature, which Venturebeat estimated added another $100 million to Facebook’s costs. It may be true that those numbers are not a lot of money by Facebook’s standards, but the publicity and resulting lawsuit did create some damage to the company’s public reputation. No one can afford that!

What are Sponsored Stories?

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Sponsored Stories appear on the user’s home page. Simply, if a friend interacted with a sponsored page, app or event, the interaction would appear as a sponsored ‘story’ in the news feed.

But since its inception in 2011, privacy issues were raised, because the brands did not ask for permission from the user to advertise their products. Sponsored Stories suggested pages a user might enjoy, as their friend’s had interactions with the sponsored page or post. It is a very effective way for brands to reach their targeted audience.

How does this affect e-Commerce? What does this mean for those that Market on Facebook?
Online marketers and business owners are going to have to get a little more creative and interactive with their advertising content. But don’t worry, if Facebook is your social media outlet of choice, there are many great options left on Facebook to advertise your brand. Facebook is working hard to make that so.

For instance, sponsored story’s ‘social context’ format of sponsored story ads where ‘friends’ are featured in the ad — will now be placed in all of Facebook’s advertisements. If a user sees a brand’s ad and their friends have ‘Liked’ it, that information is now included automatically.

Plus with the elimination of Sponsored Stories, many project that even more new opportunities will emerge for brands. Certainly one nice element to all of this, is businesses no longer will need to purchase both Sponsored Stories and additional ads.

In conclusion, it is well documented that social interaction and ‘word-of-mouth’ marketing like Sponsored Stories, definitely influences consumers. In fact, research (from Nielsen to Datalogix) concludes that social context advertising drives awareness thereby increasing a brand’s ROI. So this is a win-win situation for brands and for Facebook. Online marketers and business owners get to create new and inventive word of mouth marketing content and there will no more lawsuits for Facebook, at least not in regards to Sponsored Stories. It is a brave new world out there and with ‘content as king’, online branding through social media is only going to get more innovative and exciting.

If you have questions or need suggestions about great alternatives of Facebook Sponsored Stories, feel free contact us directly and we will be happy to assist you.

For latest news about Digital Advertising please visit our Facebook Page: https://www.facebook.com/walteranalytics.

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