In high school economics, I was taught there are two ways to ration – by queueing and by price. It appears that Facebook will apply the same lesson for users’ news feeds, marketing promotions and sponsored stories.

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Introducing Facebook Sponsored Stories

Until now, marketing messages could be presented to followers via postings to their news feeds, and try to grow audience as the fans spread the posts to their Facebook friends. That feed in the heart of the screen is where Facebook users focus their attention. The alternative has been to create sponsored stories (available since early 2011) to reach the target audience. Only problem is, the sponsored stories have been part of the paid display ad placements, in the less visible right hand column. So, you either bought a placement in the less viewed ad section or waited in line for your audience to see you in the increasingly crowded news feeds.

That is about to change. Facebook will now allow you to move your message (sponsored story) to a prominent position in the news feed queue. You just have to pay for the privilege.  The central location of the feed is more valuable than the right hand ad column. But there are tradeoffs to consider. Beyond giving up the “free” feed, will your sponsored story cost more than it did in the Facebook ads section? (After all, Park Place costs more than Baltic Av.) Will the prominence be worth the cost? In fact, what elements will Facebook factor into the price?

The Price of Advertising on Facebook

Will sponsored stories in feeds go only to your followers, or be targeted like ads? If the latter, will Facebook targeting and placement purchase options be improved so marketers can focus the messages to better defined audience segments? Since so many Facebook campaigns are intended to reach users who have similar interests to your followers,  better matches against the massive Facebook profile database would be valuable, especially if the feed placements wind up costing more. Marketers should also have more options for duration of the sponsored story feeds, along with frequency. You’re looking for  the largest percentage of target audience to see the story, so gross impressions are not likely to be an efficient buy. Serving the story when the user lands on the feed will  be a better approach. Repetition will also be helpful, but not at the risk of annoying fans you’ve worked to attract and maintain. Passing along recommendations should still be a major goal. So you should be able to limit the number of times a user sees the feed item, and this may take some experimentation. Once again, better selection criteria and flexibility will be needed from Facebook.

Last, Facebook should drastically improve analytics reporting. The offering presently available isn’t granular enough to provide the information marketers will need to get the best value from the paid news feed.Especially early on, marketers and their agencies will need detailed data to see how camapigns are working and make adjustments to optimize. Data transparency has not been a Facebook core competency in the past. That must change if everyone – sponsors, users and Facebook Inc. – are to benefit from the change to the news feed and sponsored stories.

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This entry was posted on Thursday, February 9, 2012 and is filed under Social Media in Marketing.

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