Why Facebook is abandoning "likes" for Sponsored Stories
The big announcement coming out of fMC, Facebook's event for marketers on Feb. 29, was that the social network is upgrading its Premium ad product offering. Facebook is now focusing on the branded ad unit that performs best in terms of click-through rate, conversions, and effective CPM. The net result will be higher effective yields, better advertising performance for brands, and a superior user experience, as we should all see more relevant ads.
Facebook's new ad strategy will enable brands to focus on content strategies that enable greater scale and success. It continues Facebook's philosophy that social is about content, not ads -- and consumers are better brand advocates than are the brands themselves.
Stay informed. Want to explore the best ways to reach and connect with today's Mom and her new digital life? Attend the iMedia iMoms Summit, Apr. 22-25. Request your invitation today.The new model places much more emphasis on what we call "consumer-initiated advertising." The biggest brands -- P&G, Unilever, McDonalds, AT&T, Ford, Coca-Cola, Kraft, Wal-Mart and others -- have been working hard since the launch of Facebook Pages to deliver a consumer-focused social experience. It has taken these brands and others time to adapt to this new communication style, but the shrewdest brands are finding great success with this approach. Consumers want to engage in brand "conversations" rather than listen to brand monologues.
As the first and one of the largest API vendors to implement Sponsored Stories, we've experimented with Sponsored Stories widely over the past year, and we understand why Facebook has decided to bet its future on these types of ads. Sponsored Stories amplify conversations across the social graph, delivering on the ultimate brand promise of "word of mouth at scale." A brand recommended by a friend will always be more attractive than one promoted via an impersonal ad.
I've written before about the way Facebook's branding power relies on the concept of "contagion," where an interaction with a brand spreads like a virus across the Facebook social graph through word-of-mouth advertising. The new emphasis on turning posts into ads will encourage more users to interact with brands' most engaging content. Sponsored Stories will piggyback on that to drive even more engagement, consumer influence, and interaction, and at the same time help to improve Facebook's yield. Sponsored Stories yield an average effective CPM premium of 60 percent, and advertiser results can far outperform that premium, so the shift to this strategy makes great sense.
Sponsored Stories are the wave of the future for advertisers looking to build brands, and this new direction from Facebook opens the door to greater engagement and higher-quality advertising experiences. At the same time, Facebook is creating the ability to advertise based on actions within applications, to further increase relevancy of ads based on user activities that are relevant to brands, beyond the "like." One of the social network's biggest recent changes involved enabling users to share their actions on outside websites and tools, including Spotify, Hulu, Netflix, and the Washington Post. In the very near future, we anticipate advertisers will be able to leverage these actions in their campaigns on Facebook, mobile, and beyond, even if they don't have administrative rights to the application.
For example, brands can target users who are listening to Coldplay on Spotify -- offering them related music, or brands that research has shown to be popular with Coldplay fans. The native support of open-graph actions extends a brand's ability to target users based on actions on the network.
Buying ads on a cost-per-"like" model may have been the first step for brands to build a fan base, but Facebook is flipping that model on its head.
Sponsored Stories increase the importance of targeting to the most relevant and engaged audience segments, using highly targeted interests, demographics, and geographic segments to ensure the best campaign performance, placing increased importance on relevant content. This in turn will drive greater advertising success.
We don't think this directional shift will be unique to Facebook. We anticipate that all other social network platforms, such as Twitter, LinkedIn, and Google+, will move more and more in this direction over time. This is the sweet spot of social network advertising: It's less about real-time ROI or "like" acquisition, and more about social engagement advertising and consumer engagement.
Dave Williams is the CEO and Founder of BLiNQ Media.
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"Like symbol" image via Shutterstock.
Monday, March 12, 2012
Why Facebook is abandoning "likes" for Sponsored Stories - iMediaConnection.com
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