Creativity Marketing Transformation

Sponsored Stories: Facebook’s Content Gamble Under Fire


It looks like Facebook may have to pay users affected by their recent marketing effort, once a California judge gives final approval, likely in June of 2013. The social giant has now agreed to reimburse those affected by Sponsored Stories up to $10 apiece from a $20 million settlement fund. So, what’s the big deal? Where did Facebook go wrong?

I Don’t Remember “Liking” This…

Facebook and privacy issues go hand-in-hand; hardly a week goes by without another legal challenge or advocacy group trying change the way Zuckerberg’s company does business. Sometimes, these challengers are misinformed about the risks of an online world, but as the recent Sponsored Stories debacle demonstrates, the social giant can also go too far. Content marketers need to pay attention – when does social step over the line?

Most users are familiar with the list of sponsored sites that pop up when they scroll through their news feed, always connected with a friend who “likes” the company. The problem, according to the lawsuit, is that in many cases Zuckerberg’s company “drafted millions of (Facebook members) as unpaid and unknowing spokespersons for various products,” according to a related class action lawsuit filed in 2011. In other words, Facebook tacked user names onto sponsored links, but without those users’ consent.

More concerning for groups like the Children’s Advocacy Institute (CAI) are the use of minors’ names and information in Sponsored Stories, since parental consent is required for any such use. Many of these groups oppose even the revised settlement, saying Facebook should be required to secure the advance permission of parents for each “capture and republication event.”

The Cost of Content

As a recent Financial Post article points out, 90 percent of B2B-focused organizations are using content marketing, with 33 percent of their total marketing budgets earmarked for the task. The article calls out things like strategic thinking, consistency, and original content as drivers for success – when done right, content marketing seems more like news than advertising and encourages users to share rather than ignore it.

This is why Zuckerberg’s social giant treads a thin line. Under increasing pressure from investors to drive greater revenue, Facebook has to explore every avenue it can, and having advertisers pay for marketing space on news feeds only makes sense. To make these ads more effective, marrying them with user data probably seemed a sensible course. But here’s where the site went astray (and since they’ve agreed to the preliminary version of the revised settlement, they know it): they tried to force content connections instead of letting them develop organically.

If there’s one thing consumers despise more than advertisements without content, it’s the attempt to force social connections. When this attempt comes from a site like Facebook, already under fire for treating European user data with less than a secure hand, it has serious repercussions; serious enough to mean court orders.

Take Note

For companies taking their first steps into content marketing or trying to increase the appeal of current efforts, the Sponsored Sites lawsuit is a clear warning. Consumers are the new currency in a social market – spend their trust with care.

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