September 14, 2011, 1:24 PM

Facebook tests the impact of mixing ads with user content

In a test, the social network starts including ads in home page feeds.

Zak Stambor

Managing Editor

Lead Photo

Facebook Inc. says it is experimenting with adding an unfiltered live feed ticker to the home pages of some of its users and to include ads in this prominent part of the page. The ticker features updates on what all of a Facebook user’s friends are doing at that moment, such as if someone clicked that they Like a particular brand or product. That’s a different approach than the current news feed, which highlights only a portion of actions taken by a consumer’s friends.

Incorporated into the new ticker are Sponsored Stories, an ad format on the social network that enables companies to pay to highlight posts or actions that a consumer’s Facebook friend has made that relate to the advertiser. Including those ads makes them far more prominent than they’ve been. Facebook displays “Sponsored” under Sponsored Stories in the live feed.

The new live feed ticker represents the first time the social network has melded user and paid content in a single feed. Facebook previously separated its ads into two positions on the right-hand side of the web site. The site’s self-service Marketplace ads appeared on one of four slots on the right side of a Facebook page under “People You May Know.” Sponsored Stories appeared in a box under the Marketplace ads.

Facebook says the test includes only a fraction of a percent of Facebook users. However, with more than 750 million active users, that can still account for a large number of consumers.

Before the format rolls out to more members of the social network, Facebook might make changes to the format, a Facebook spokeswoman says. “In the coming weeks, as we learn more from this test, we'll keep making improvements and may expand it to more people,” she says. 

If the format retains the blending of organic and paid content it could result in Sponsored Stories becoming far more important to marketers, say experts.

“If the ad is relevant, and it should be as it involves the activity of a connection, then the user is likely to engage with it at rates that far exceed traditional display advertising engagement,” says Lou Kerner, vice president of equity research at Wedbush Securities. “That's the power of Facebook.” 

However, the ads could also be distracting to consumers and result in a poorer user experience, says Patricia Seybold, CEO of Patricia Seybold Group. “It's much more annoying than an ad in the margin,” she says.

Comments | 1 Response

  • Google+ and Facebook are pretty much the same exact things. They are both competing with eachother but still avoid the main issues these days. Facebook AND Google are covered in ads and all of them have trackers of course. Though the ad is placed on your page, you are not gaining anything from them being there or the fact that you "like" an ad and your friends see that you "like" it causing more business for them as well. The ONLY social networking site out there that allows THE USER to make the money off of ads placed on their profiles is ONLYMEWORLD. Not only do they focus on USER PRIVACY by not asking for the users real name or e-mail, but they focus on helping the user make money as well especially in such a tight economy.

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