When it comes to advertising, it’s said that there is usually nothing better than the strategy of word of mouth.  Hearing about a product or a service from a trusted friend or even an acquaintance is likely to help you drop your resistance to that item and open your wallet or pocketbook.  As in the real world (brick and mortar), many businesses on the web are also looking for a way to leverage word of mouth for advertising purposes and one of the newest companies which is rolling out word of mouth to the masses is Facebook.

Sponsored Stories
Let’s face it, the advertisements that are now on Facebook are not as effective as FB’s main rival Google and in many cases appear to be random and largely ignored.  However, Facebook is looking at ways to change this and the first response to making their advertisements more powerful is to add snippets of what real people have said about a product or service within an advertisement.

How Sponsored Stories Works
As a traditional business on Facebook, if someone “Likes” you (subscribes to your page), you can effectively reach out to this community through posts on a frequent basis.  For instance, if you are a local burger joint (let’s call it Frank’s Burgers) in the neighborhood and a person “Likes” you, you can then send daily posts maybe of the day’s special menu or weekly post of entertainment of live music that will be appearing over the weekend.  While this is a great way for businesses to reach out to their community, if a person has dozens, hundreds or even thousands of friends which is sometimes the case, your message will get lost quite easily. 

Facebook’s Sponsored Stories relies on the fact that word of mouth is a great selling strategy and the fact that most people “Like” or are friends with like-minded people/businesses/organizations with the same interests and values.  What Sponsored stories does is finds postings (either through a normal posting or Places check-ins) that have Franks Burgers already cited, it then takes the posting and converts it into advertisement form.  Then it sends out this ad to potentially the rest of one’s friends and others showing it at the right hand side of the page in its own space.

So for instance, your friend Bob checks in at Frank’s Burgers. Franks Burgers uses Sponsored Stories to advertise.  Friends of Bob will see that he has checked in on the side of your page (as an advertisement).  This ad might push you to go to Frank’s Burgers to join Bob.

Pros and Cons
Facebook is trying to make headway when it comes to advertising and Sponsored Stories does leverage word of mouth and the vast amount of networks created on Facebook.  For certain businesses, this type of advertising might work (such as a coffee shop, restaurant, billiards hall, fitness club, etc).  In addition to local businesses, products or services that rely on word of mouth advertising (real estate agent, accountant, etc) might also find this ad tool useful. 

One of the main cons of Sponsored Stories is that you can’t opt-out of this type of advertising.  Not only does this mean you might be receiving constant check-ins and other type of ads that are not relevant to you, but these check-ins or ads are coming from people that you are friends with or you have Liked, but have little connection with you in reality.

In addition, many people that use Facebook have already voiced their disapproval of their content being used for ads.  It might be a novelty that you see your Uncle Jack checking in to Frank’s Burgers, but it can become quite a nuisance after a while.  In addition, when your content is being used to sell products and services, how will you react (will it be positive or negative?) and this emotion can affect the way you perceive these ads going forward.  In my research, I have read many negative comments regarding Sponsored Stories- many disapproving of their possible writings being used for ads and others coming to the realization that the product that Facebook sells is you!

For SEO/SEM Professionals
Is this right for your clients or for your business?  This is a question that you have to ask yourself or your client personally.  Many will have immediate objections while others might see it as a powerful marketing tool.  However, the verdict is still out whether or not it is an effective selling tool.  We won’t know that for at least a few months, since Sponsored Stories is very new.   My advice is to also wait for a few months to see reaction to these ads and whether or not they are effective. 

It should be noted that in regards to the difference between Google AdWords and Facebook ads (including Sponsored Stories), you should realize that ads on these two entities are very different.  Facebook ads are passive, most people are not looking to purchase an item or service, they are talking to their friends/family.  However, for those building a brand, recognition is important and Facebook advertising can be helpful.  For those looking to sell an item or service now- Google AdWords is probably your best bet.  Those clicking on your ad using Google are actively looking to either purchase a product/service or actively seeking out more information.  As always, we’ll keep you posted on how Sponsored Stories pans out.