Facebook launches new ad tool

This post comes from Seth Fiegerman at partner site MainStreet.

Facebook is about to give new meaning to the phrase "product placement."

The popular social networking site has launched a new advertising option called Sponsored Stories that will allow companies to promote themselves based on user-generated content.

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When a user decides to check into a Starbucks through the Facebook Places feature, for example, Starbucks will now have the option to advertise itself against that status update. Friends of that user would see the post about going to Starbucks along with a Starbucks logo that links to the company's fan page. The same thing will happen if a user "likes" Starbucks' company page on Facebook or posts something on that page.

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According to Facebook, the new service will not expose users to more ads than they normally experience on the site. Instead, the ads they do see will just be increasingly personalized since they are based on updates from friends and family. Essentially, the goal of this new feature, according to Facebook, is to capitalize on the potential for word-of-mouth advertising. Post continues after video.

"When we make decisions about the products we want to buy, the places we want to go, we're basically looking for cues from our friends about what those decisions should be," one Facebook engineer explains in a video demonstrating the new feature.

Can't opt out

The downside, for some, is that this new feature transforms Facebook's 650 million users into brand promoters, whether they like it or not.

"Sponsored Stories respects existing privacy settings for content you post that may appear in News Feed," a Facebook spokesperson told MainStreet. "People on Faceboook can control who sees the content they post, which in turn controls who sees Sponsored Stories."

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However, the implication here seems to be that users cannot opt out of the feature altogether, but can only control which of their connections sees the updates and the associated ads. Then again, if you are comfortable alerting your Facebook friends when you check into a store, it's not really a giant leap to blatantly promote that store with an ad.

According to the spokesperson, the Sponsored Stories feature was first introduced to select users on Tuesday and will eventually be rolled out to all users globally.

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