Wendy Schollum: Facebook friends' 'likes' made into ads

Whether you need a mechanic, a new stereo or a web provider, more than 78 per cent of us make our service provider and product purchases based on peer recommendations, and no one understands this "social sphere influence" better than Facebook. In response to this ever-growing trend, Facebook is now selling the power of peer recommendations to businesses through its latest advertising format: Sponsored Stories.
Sponsored Stories provides businesses with the ability to pay (Facebook prefers to refer to this as "sponsoring") to have the News Feed activities of their consumers (that relate to their business) appear as an advertisement for all their friends to see.
For example, if you're an accommodation provider and looking to attract new patrons on Facebook, you can pay to have user "likes" (the Facebook equivalent of subscribing to an email newsletter database) of your business' Facebook page featured in a Sponsored Stories area on the right side of the News Feed. This is means that when a user "likes" your Facebook page, all their friends will be shown a Sponsored Story telling them that their friend has done this. The hope is that the 130 friends (on average) that this user has, will then also view your business' Facebook page and also choose to "like" it - instant viral marketing.
Those of you who are veteran Facebook users may question the value of this new advertisement format, especially when the information these Sponsored Stories features already appears in the traditional News Feed of users' friends. However, with the average user spending more than an hour on Facebook every day, it is easy for many of the activities the New Feed reports on to be overlooked - the Sponsored Stories ad format simply highlights the actions that specific businesses want you to take special note of.
At the moment, Sponsored Stories is limited to likes, checkins (using Facebook Places - not yet available in New Zealand), actions within custom applications and page posts. But, this still means that businesses can now pay to turn the comments and actions of their Facebook followers (with relation to their business' Facebook pages) into a strange hybrid of word-of-mouth recommendations and advertisements.
This latest move by Facebook may present just the advertising medium the 21st century demands.
However, the opinion of the humble Facebook user is yet to be heard, in relation to the latest use of their data: how will they feel when they hear actions as simple as "liking" a page are suddenly repackaged to their peers as a glowing recommendation of a business?
There are undoubtedly some interesting times ahead.
Wendy Schollum is a web strategist and Managing Director of Xplore.net Solutions Ltd (www.xplore.net). If you would like more information on promoting your business online, follow the Xplore.net team on Twitter (www.twitter.com/XploreNET), join Wendy on Facebook (www.facebook.com/xploreNET) or call 0800 100 900.