Facebook starts displaying ads in the News Feed

As expected, Facebook has started displaying ads in users' News Feeds. You may not be seeing them yet as the company is rolling them out gradually, like it does for all its changes.

These new ads are marked as "Featured," which could be confusing given that Facebook has always used the word "Sponsored" for its ads. Currently, Facebook uses the verb "feature" for making content on a user's Timeline bigger and more prominent.

Last month, a Facebook spokesperson said the company hoped to "show people no more than one Sponsored Story in their News Feeds per day." This is no longer the case, as Facebook now says you may see more Featured stories "if you visit your News Feed a lot."

At the time, Facebook said it wanted to roll out the ads "thoughtfully and slowly" while also making sure that the stories were "clearly labeled." The ads are indeed labelled, but I would argue they could be marked more clearly. Facebook may have chosen "Featured" over "Sponsored" for these new ads since these stories are not simply paid for by advertisers. The stories must be related to friends and/or Pages which users have previously Liked. In other words, you won't see these ads appearing organically in your News Feed: they need to be linked to you in one or more ways.

You can see an example screenshot above, courtesy of Inside Facebook. For the above ad to appear in your News Feed, two things need to happen. First, you must have already Liked Ben & Jerry's Facebook Page, or one of your friends must have interacted with Ben & Jerry's Page. Second, Ben & Jerry must have chosen to have the ad promoted to users who have Liked its Page.

Alternatively, a story you wrote can also be featured as an ad, but it will only be shown to people you originally shared it with. A business may want to do this in order to get more people to Like its Page by showing off someone important Liking their Page, or underlining interesting content someone posted on their Page. Facebook is likely hoping the fact that since the story is being shared between friends, it will be considered more relevant than a traditional ad would be.

Since these ads are just stories, they cannot be stopped completely (although ad blockers may find a way around this). Users do, however, have three options provided by Facebook to limit the ads: click hide to remove individual stories, limit the volume of stories you see from a specific friend to only important posts, or unfriend the person and/or unlike the Page to stop seeing certain kinds of stories altogether.

Here is the official description of Featured Stories from the Facebook Help Center:

Businesses can pay to feature a post so there's a better chance you'll notice it.

A quick example of how it works

1. Say you like your gym's Facebook Page.
2. Some friends see the story in their news feeds, others may miss it.
3. The owner of the gym can pay to feature the story so your friends are more likely to see it.

Who can see featured stories You decide who can see what you share on Facebook. When a story is featured, it's shown to the same people you originally shared it with.

Featured stories you may see

• When a Page you like posts something new
• When a friend likes something (such as a Facebook Page or individual Page post)
• When a friend checks in somewhere, plays a game or uses an app

Last month, Facebook launched a campaign to explain ads to its users over at facebook.com/about/ads. The goal was to inform its users about how the social networking giant makes money, and why it needs ads to keep the service free for all its users.

I think Facebook is expecting a huge backlash with this change, and rightly so. The social networking giant first put ads into the News Feed before in 2007, but quickly stopped the practice in 2008. Facebook co-founder and CEO Mark Zuckerberg called the introduction of Beacon four years ago a mistake. Still, with the company's upcoming IPO, Zuckerberg is looking for as many different revenue sources as he can find.

Despite the limitations set on the ads, this is still a risky move on Facebook's part. Now that we have at least one ad per day in the News Feed, what's stopping the company from showing at least two per day? How about at least three? Where does it end?

I have contacted Facebook for more information and will update you if I hear back.

Update: "Featured Stories are regular stories that people may see in their News Feeds already, but that a marketer has paid to feature on Facebook," a Facebook spokesperson said in a statement. "We've begun slowly rolling these out in News Feed and are labeling them as 'featured'. These stories respect your and your friends' privacy settings, and people will only see Featured Stories about people and Pages they've already connected to."

"We are using the term 'featured' because we want to make it clear to people that they're seeing content from a Page or person they have chosen to connect to. Since people can see marketing messages from both Pages they have and have not Liked, we want to make it clear that marketers can only pay for stories to be featured in your News Feed if you have explicitly liked the Page. And because you are always connected to your friends, we are also labelling stories from your friends that have been paid to be featured in your News Feed as 'featured' to keep things consistent."

See also:

• Why is Facebook putting ads in the News Feed next month?
• Over half of Facebook users respond to social media marketing
• Women more likely than men to click on Facebook ads
• Facebook doubled its advertising market share from 2009 to 2010
• Facebook made $1.86 billion from your content in 2010
• Facebook testing coupons as premium ads