Facebook Adds New Targeted Ad Unit

The new “sponsored story” unit, set to launch later this month, will appear above the fold on users’ home pages, in the “news feed” area that Facebook added last month. That feature, which acts as a dashboard to update users when their friends update their profiles, join groups, add photos, or perform other activities on Facebook, was met with an uproar over privacy concerns. The company quickly made some changes to the implementation, giving users more granular control over which actions will be broadcast to each group of friends.

The sponsored story unit shows a banner-sized graphic unit combined with three lines of text. It will be targeted to users based on their Facebook profiles, as are the display ads on the site. The ads can link to an advertiser’s page, or to an advertiser’s sponsored group on Facebook.

Sponsored groups have been available on Facebook for more than a year, and allow marketers to have a deeper relationship with Facebook’s users. There are currently more than 50 such groups from marketers like Apple, Cingular, and Dell.

Media reports on Friday erroneously reported that a user’s friends would be notified when that user clicked on the new sponsored story ads. That is not the case, according to Melanie Deitch, director of marketing at Facebook. “There will be no notification to other users of clicks on ads. That’s something that would never happen,” she said. “We take users’ privacy very seriously, and we provide a lot of tools to help them manage their privacy on our network.”

At the Museum of Television and Radio in New York on Friday, Mike Murphy, Facebook’s chief revenue officer, shared some tips for marketers on how to engage users on social media sites like Facebook. His advice included giving users a reason to share with the marketer, becoming part of the experience, and listening to users without fear of what they would say.

Murphy cited several examples of good executions by marketers of sponsored groups on Facebook. Paramount recently started a group for its global-warming film, “An Inconvenient Truth.” That group asked Facebook users to pledge to see the film, and then photos of users were added to a mosaic of others in the group, with the ability to see names and group affiliations of users by mousing over their photo. Dave Matthews Band offered Facebook users a chance to decide what songs the band would play on their summer tour. Chase developed a credit card for students based on feedback it received from its group. The result was a card that offered “karma points” redeemable for shared endeavors, such as charitable donations or a new TV for the frat house.

In an interview after his speech, Murphy told ClickZ he was not worried that opening Facebook to the general public would rob it of its identity. He said that in the three days it’s been open, most of the new users fit the same 18- to 24-year-old demographic. “What it does is expand our reach outside the college student,” he said, such as reaching friends that are taking a year off or have graduated, and do not have an .edu address. He said the demographics of the site are beginning to skew older as more users graduate and continue to use Facebook.

In August, Facebook partnered with Microsoft to sell and serve display ads on Facebook’s site. Facebook also struck a deal with Interpublic in June to help develop new ad units and implement advertiser-friendly practices.

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