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Facebook Can Finally Put its “Sponsored Stories” Drama Behind It

The drama behind Facebook's sponsored stories Ads.

The drama behind Facebook’s sponsored stories Ads.

When Facebook’s Sponsored Stories feature came out a couple of years back, it seems that a huge segment of Facebook members cried foul. Who wouldn’t be offended if you liked a particular ad, Facebook will not only show your name but also your picture and your tagline next to the ad. This is obviously a way of piggybacking on your personal credibility and legitimacy among your friends to add to the credibility and trustworthiness of the product or service being hyped. As you can well imagine, many people were offended and guess what, there was a class action lawsuit filed in 2011. It came with a huge request of payment to compensate the so-called damage suffered by the class action plaintiffs. Of course, just like with most class actions, the only real winners are the plaintiff’s lawyers because the dollar figure is split up into millions of plaintiffs so each person gets pennies while lawyers walk away with a large chunk of the settlement in terms of fees.

Be that as it may, class actions do keep corporations in line and they are necessary evil in the consumers’ fight against corporate overreach. The drama for Sponsored Stories is actually pays off for because Facebook retains a very powerful advertising platform that is able to show Sponsored Stories, this is not going away. Moreover, the settlement also allows for the names of your friends who like a particular ad to remain. Their tagline and their pictures are gone but their names remain. So, depending on how you look at it, the effectiveness of the ads still remains because you can still associate the ad with the names of the people you trust, admire and respect. At $20 million this is a drop in the bucket for Facebook because it generates billions in revenues and is worth close to $100 billion.

It is no surpise that many consumer advocates are children’s advocates are unhappy with the final settlement. Still, the final settlement was approved by US district judge Richard Seeborg and the Sponsored Stories is now an official Facebook ad option in its current form. If you read between the lines this is really a big win for Facebook because as you already know, Facebook has had a tough time making money off its mobile version. It’s making money off its website version but its mobile was struggling with Sponsored Stories by featuring ads right in the feeds of users. This is a slamdunk. It just remains to be seen if advertisers are willing to pay top dollar for this type of advertising. As we have mentioned earlier, the biggest criticism against Facebook is that its ads are not as engaging as targeted as search engine ads. Looking at an ad on Facebook is like hanging out with your friends at a cafe and looking up at a poster. It’s your call whether to say that is effective or not.