Facebook to launch a New Ad Format – turning your “Likes" Into Ads— ignoring your contribution altogether

Who is clicking the Like button on Facebook?

Is it you or Facebook ?

Yes. It’s you.

So would you be happy if Facebook makes money from your actions?

If one tries to summarize a report by Ad Age then the Facebook's next ad format will be based around those Likes. The likes which you clicked on.

Facebook is once again launching a whole new ad format that will try to leverage on the amazing power of the "social graph" as a sales tool. A social graph which Facebook users make every second. Although they see it as a social graph most of the times, Facebook interprets it as a commercial action. And going by this model, a Facebook user’s likes can be broadcasted to friends, in a way that Facebook and the Brand 'Liked' are the beneficiaries.

How the New Ad Format works: When you like something on, say, a business’s Page (or check-in at that page), the business can pay Facebook to broadcast that to your friends more prominently as a "Sponsored Story."

The ad unit will give brand-related action such as a "like" or a check-in a lot more visibility on Facebook by adding them to an ad unit (that shows up on the right-hand side of the screen; image courtesy Ad Age shown below) in addition to users' news feeds.

For example, if Starbucks buys a "sponsored story" ad, the status of a user's friends who check into or "like" Starbucks will run twice: once in the user's news feed, and again as a paid ad for Starbucks, on upper right hand of the screen. Although the ad unit is clearly marked with the words "sponsored story," the ad -- which will includes a user's name, just like the news feed -- is not optional for Facebook users.

Interestingly, the report says, Brands can pay on a cost per action (CPA) basis (the brand has to pay Facebook only when someone takes some action not just clicks on the ad); which means they'll basically pay for ads.

On a closer look, this is akin to, you promoting a product or service; and Facebook and the brand are sharing the benefits. What is also alarming is, as a user who took the primary action of “clicking a like”; you and your friends are taken out of the scene altogether. Else this model can be made Pay per Click, rather than Pay per action.

As in the Pay Per Click model, even after Facebook broadcasts a sponsored ad to your friends based on your ‘Like’; if your friends click on the ad and don’t take any action; the business still have to pay to Facebook. Which Facebook doesn’t want to do. As it will mean less business for it.

So to make the new ad format, speaking business for it and the brands; it has taken the user out of the picture, once he/she has taken the primary action of “Clicking a Like button”. --------

No comments