Facebook Turns Friend Activity Into New Ad Format

Facebook is rolling out Sponsored Stories, a new ad format that turns your friends’ actions into promoted content.

Sponsored Stories is “a way for marketers to sponsor activities that happen throughout the News Feed,” a Facebook executive told Mashable. Companies can choose to take certain user actions — such as checkins or actions within Facebook apps — and feature them in the column on the right side of the News Feed.

For example, if you’re Whole Foods and you’re looking to increase your exposure on Facebook, you can pay to have a percentage of all checkins to Whole Foods featured in a Sponsored Stories slot in the right-side column. Your content wouldn’t be shown directly, but the actions of a user’s friends would appear. Users seeing their friends “liking” or checking in to Whole Foods will drive increased trust and increased traffic.

“The advertiser is not controlling the message; it’s about actions,” our Facebook contact said.

Here’s an example of an action that could potentially be sponsored:

And here’s what it might look like as a Sponsored Story:

Starting today, four specific types of user actions can be turned into featured stories: likes, checkins, actions within custom applications and Page posts. If a company has a custom app (e.g. Starbucks Card or even FarmVille), it can promote the actions users take within them. The same is true of users posting on the walls of their favorite brands.

Facebook’s roster of launch partners includes Coke, Levi’s, Anheuser Busch and Playfish. Also, the social network is partnering with a slew of nonprofits for Sponsored Stories, including Donors Choose, Girl Up!, Malaria No More, Amnesty International, Women for Women, Autism Speaks, (RED), Alzheimer’s Association and UNICEF. However, anybody will be able to bid on Sponsored Story slots (by a per-impression and/or a per-click basis) starting January 25.

We haven’t seen Facebook play with new ad formats for a while — most of its revenue comes from the targeted advertising that appears on most Facebook pages. It has been timid about new ad formats after the spectacular failure of Beacon. Sponsored Stories seems like a simple and logical way to introduce new forms of advertising into Facebook’s system, though.

Sponsored Stories has a lot of similarities to Twitter Promoted Tweets. Both are trying to use content from within their networks and turn them into advertising dollars. There is one key difference between Sponsored Stories and Promoted Tweets, though: The user defines the advertised content in Facebook’s format, not the advertiser.

It’s that one little difference Facebook hopes will turn into big bucks.