Facebook announced today that it will start featuring its "Sponsored Story" ads in users' news feeds in January. The move will greatly increase the presence of marketers in Facebook, as well as provide new revenue for the social network months before its expected IPO.
Facebook currently restricts advertising to the right margin of the page. Adding ads to the news stream will increase their visibility, particularly for mobile users, though the ads won't immediately appear on mobile phones.
Sponsored stories are Facebook's most buzzed-about ad product and carry the promise of high rates because they have the built-in endorsement of a friend. They were introduced in January 2011 and currently appear on the right-hand column of Facebook pages, surfacing actions taken by Facebook friends around a brand's content, including likes, posts, check-ins and app shares, all of which would be eligible to appear in a news feed anyway, according to Facebook spokeswoman Annie Ta.
Sponsored stories in the news feed will be the same size as other items appearing in the stream and will be identifiable by a link that reads "Sponsored" below the post. Users who mouse over the link will see the following text: "This was already shared with you. A sponsor paid to feature it here."
Ms. Ta said that a small group of advertisers was selected to participate in the rollout and that users will see, at most, one sponsored story daily in their news feed during the launch.
Mobile users won't see any sponsored stories during the rollout, but Bloomberg reported that Facebook is planning its first foray into mobile advertising by late March. Sponsored stories in news feeds were cited as a possible route for Facebook to generate revenue from its 350 million active mobile users.
Sponsored stories in the Facebook news feed have been anticipated for some time, and it's an obvious step for the company in terms of ultimately delivering advertising to its enormous mobile audience.
Dave Williams, CEO of social-engagement advertising firm Blinq Media, doesn't think Facebook will stop there, however. He expects it to ultimately deliver sponsored story-like ads on third-party sites and even on TV shows streamed online.
"We really see Facebook becoming the operating system of the internet for ad delivery in the future," Mr. Williams said.