The social media giant has announced that sponsored stories are to disappear from Facebook effective April 9th. Due to their high potential for conversion, sponsored stories had been very popular with marketers; however, some users disliked them enough to leave the site altogether and others took Facebook to court. Just as Facebook decides they have had enough, however, Google has announced that they have plans to implement a similar feature on their own ads.
What is the problem with sponsored stories? It all boils down to two things: privacy and consent. Many users felt that their privacy was violated when Facebook let others know what brands or organizations they had "liked". Others argued that because Facebook never gave them the chance to opt out of this feature, and helped itself to their names and images for use in sponsored stories, it was actually in breach of the law. Last August Facebook settled a class action lawsuit pertaining to the matter for $20m, just under one-sixth of the money they had made from sponsored stories but enough to make them nervous.
In introducing their own "shared endorsements" feature, Google appears to be taking note of Facebook’s troubles and adopting a rather more cautious approach, allowing users to opt out. “Don't worry, your account’s privacy settings are not affected,” they noted in a statement. “You get to decide whether you want your name and photo included in shared endorsements that appear in ads through the Shared Endorsements setting. And for users under 18, their actions won’t appear in Shared Endorsements in ads and certain other contexts.”
Is Google attempting to cash in on Facebook’s woes? Perhaps. Marketing schemes of this sort have a lot of potential because people’s purchasing decisions are often most strongly influenced by their peers; therefore, seeing that a friend has previously purchased a product or service is likely to make it seem appealing. Facebook, however, does not seem to have given up the game just yet. In dropping the sponsored stories format, they have announced that “instead, social context – stories about social actions your friends have taken, such as liking a page or checking in to a restaurant – is now eligible to appear next to all ads shown to friends on Facebook.” Adverts will still be able to incorporate "likes" provided that they are not the ad’s main focus. It remains to be seen how users will react to the change.