Facebook Sponsored Stories Are Dead: The Rise Of Ubiquitous Social Context

SponsoredStoriesGraphic650Facebook announced last Thursday that it would begin phasing out sponsored stories. No new ads can be created from this point on, while previously purchased inventory will run through April 9. The controversial ad unit typically featured friends’ interactions with pages or applications, and they would inform you if those friends liked sponsored pages. While the ad unit was popular with advertisers, this often wasn’t the case for consumers, and its demise was foretold by Facebook as early as last June. Rolled into this change, however, is a significant revamp and net increased visibility for “social context.”

While Facebook states, “Marketers will no longer be able to purchase sponsored stories separately,” of equal note is that actions taken by friends and fans will be baked into all other ad formats across Facebook as a part of this change. Facebook announced, “Stories about social actions your friends have taken, such as liking a page or checking in to a restaurant, [are] now eligible to appear next to all ads shown to friends on Facebook.”

As a result, expect to see any restaurant ad accompanied by a friend’s check-in, or brand ad indicating a friend’s interaction, regardless of format. Below are five key changes brand advertisers can expect:

  1. The loss of a top-performing ad format: Advertisers will need to test and distribute across other formats.
  2. Increased EdgeRank, and better results from organic posts: While it’s too early to tell for sure, removing sponsored stories from Timelines leaves a lot more room for earned and owned reach. There’s been a recent backlash against diminishing EdgeRank for brands as more and more space was allocated for advertisers, so a correction toward increased reach from brands capable of generating organic engagement seems very likely.
  3. Better performance from other ad formats: As competition and clutter lessens, expect these ads to do better. How much better is yet to be seen.
  4. Engagement matters more than ever: With social validation tied into every ad format, the absence of it next to any ad will be a bit damning. We’ve seen brands focusing on advocate activation on Facebook, getting their existing brand advocates to engage. With the expectation that any ad will need at least one point of validation, and better ads will have more, getting this core group of superfans to contribute moves from important to essential.
  5. Paid segments derived from earned advocacy: With the expectation moving toward only showing ads that have social context, there will be a significant focus on building segments that are connected to engaged advocates. Each engagement a brand fosters from an organic advocate may unlock 70 to 100 new friends of that fan who can be reached with social context. If a brand wants to advertise to 1 million fans, it needs to earn engagement from 10,000 existing fans first.

Although it will remain in the tea leaves for some time, the cancellation of sponsored stories is definitely a big change that will have implications for any brand marketer. This move ties together nicely two narratives that Facebook has been emphasizing: contextual paid reach within and outside of a brand community, and that organic engagement of existing brand advocates should be a key metric of any brand page.

While there will be some growing pains in moving away from the popular format for advertisers, this is good for the end-user, and, ultimately, good for the brand. The criticality of building good, engaged communities becomes paramount, and performance tilts back a bit toward brands that are able to deliver a good experience, and not purely buy their competitors out of the feed.

Readers: How do you think the Facebook landscape will change with social context baked into all paid and organic efforts? And how do you plan to increase advocacy in your community? Continue the discussion with me below or on Twitter at @Danielmsullivan.

Dan Sullivan is the founder and CEO of “after-like marketing” firm Crowdly.

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