If you have seen the film, The Social Network, you would know that Facebook was not looking at putting any advertising on its clean image. Unfortunately, with time and growth, advertisements have crept into the website.

However, Facebook is now making the ads part of the page. Early this year, they launched a new advertising mechanism that promises to make ad units more social and in fact become a true word of mouth promotion rather than pure advertising.

A story to tell

Sponsored Stories, a new advertising technique launched by Facebook, takes news feeds and converts it in to a display unit. This display unit pops up on the right side of your page as you navigate through Facebook. Interestingly, Facebook has placed these stories above ad units. Just goes to show what Facebook hopes to do in the future.

Sponsored Story Placement

What Facebook Sponsored Stories does is that it highlights the activity of a user’s friends who have interacted with a given brand on the site. For example, if your friend checked into an ITC Hotel’s on Facebook, the hotel could buy an ad that highlights that fact on the right hand side of your page layout.

Feed the need

People are naturally interested in things their friends care about. That’s why the News Feed is such a central part of Facebook. News Feed stories give friends an easy way to show each other what they like. Now with Sponsored Stories, you can increase the visibility of these powerful News Feed stories when they relate to your organization or business.

The dynamic nature and unique algorithm behind each person’s News Feed means that each person’s experience is different on Facebook. For Page owners, this means that some of your fans do not see your valuable Page posts (status updates, videos, photos) in their News Feed. Sponsored Stories for Page Posts allows Page owners to ensure your fans see the content that your Page publishes.

If an individual has liked or interacted with Yardley of London, it may carry more clout [among his friends] than if they see an ad that simply says Yardley of London is releasing new fragrance. Sponsored Stories seem to be driving the most engagement for verticals where word of mouth works the strongest in the real world, like sports, entertainment, and music. (Engagement is defined as a user taking some action on the ad: clicking on it, Liking it, entering a comment when a comment field is available.)

Typical Sponsored Story Layout

And in real sense, this is true word of mouth promotion. Sponsored Stories promote the organic interactions between people and your business. This new ad format takes social content and turns it into a marketing message, blurring the lines between content and advertising, but doing so in a way that’s still transparent to users.

A different story

While setting up a sponsored story and the bidding process is similar to Facebook ads, there is a remarkable difference between the two. While advertisement is targeted to an unknown audience whose numbers can only be approximated, sponsored stories goes to every page member and their friends. It is more direct and more personal. And it has a definite number gauging mechanism associated.

While this may be the critical differentiator, it also makes the Sponsored Stories a more effective and true representation of word of mouth promotion through paid mechanism. With seven different types of stories to choose from, brands and page owners can now look for organic growth via a paid model.

Types of Sponsored Story Feeds

Effective Story Telling

One Facebook advertising platform provider has found that Sponsored Story ad units have click-through rate that’s 46% higher than standard Facebook ads, according to a post on Inside Facebook. TBG Digital conducted a test over the course of ten days and 2 billion ad impressions, which showed that the Sponsored Story ads performed better in terms of click-through rate and cost per click.

These results aren’t all together shocking. Since people tend to trust their friends more than they do marketers, it’s no surprise that tying the two together would be more effective than other forms of advertising. Granted, this is only one study and with three advertisers participating, it wasn’t a huge sample but these early data suggest that there may be a future for the Sponsored Stories ads.

According to Vice President of Advertising and Global Operations David Fischer, the units, which cost the same as standard Facebook ads, are performing, on average, twice as well. "The key reasons it works is that it is engaging, it is social, and it is reflective of what brings people to Facebook overall, which is to share and connect," Fischer said.

Sponsored stories are allowing us all to become marketers by default of our Facebook actions. It’s influential and a natural referral based type of advertising as well. It will be interesting to see what new forms of social influence type marketing Facebook comes out with in the future.