Recently Facebook came out with another ad unit called a sponsored story. I will be the first to tell you that I am not a huge fan of the name. However, as Facebook becomes the white pages of the world where everyone is able to be listed and contacted; it makes sense that Facebook may want to add some amount of advertising, so it’s important to understand what is a sponsored story?.

To begin, we need to understand what is a sponsored story before we can see if there is any value. A sponsored story is an ad unit that appears to the right of a person’s news feed. It will describe how a friend likes a particular page, checks into a place or likes a post. It’s not surprising considering the amount of ex-Google talent now employed at Facebook that this is very similar to Google’s search results.

When you log into Facebook, you are immediately shown your News Feed which is a dynamic representation of what Facebook thinks you want to see based on your clicks and other secret sauce that Facebook is still working out. This is akin to organic search in Google where pages show up based on location, links, etc. On the right you will see a little ad unit that remains constant while you are on the News Feed and that is called a sponsored story. Here is what it looks like:

What is a sponsored story on Facebook?

As you can see the sponsored story tells this person that one of their friends “likes” Toys’R’Us, which she can then “like” as well. The sponsored story is completely dependent on you and your circle of friends. I only see sponsored stories from brands and places that my friends have liked and checked in at. This is different than a sponsored ad which is targeting you directly based on your demographics. This is quite a shrewd move by Facebook because what they are trying to do is monetize how viral something might become.

If you like something and have a circle of friends that see it; they can like it and their circle sees it and likes it. Then, the chance of the post or checking event going viral increases; and so does the amount of money Facebook charges as the amount of clicks increases exponentially. Recently, there have also been studies that show that the sponsored story is much more effective than a sponsored ad. One study put this at 46% more effective, but this study was done in March before user’s may have noticed the change so it may have changed.

Lastly, the beauty of a sponsored story is that it keeps a post; say like this one, from being buried in a News Feed looking for some Likes. Since search engines now include likes and shares in their algorithms; it makes sense for a brand trying to build SEO mojo to consider doing a sponsored story.