• by Augie Ray , February 1, 2011

If you read this blog regularly, you know that I can be a Facebook supporter (some may say apologist), but today I have a bone to pick with them.

Where others frequently attribute shady intent to everything Facebook does, I see a company legitimately trying to balance the needs of users with the demands of advertisers who fund the free service. Consumers love Facebook, so much so that Facebook now accounts for one of every four page views in the United States, yet you and I pay nothing for it. Or, it is more accurate to say that while we provide no cash to Facebook we do, in fact, pay with our time, attention, data, permission and clicks, which Facebook converts into cash.

But even Facebook supporters can and should question when the social network takes a step that pushes the envelope of best practices in permission marketing. I believe it has done just that with Facebook's new Sponsored Stories product. What I find frustrating is how tantalizingly close to perfect their model is, yet the omission of a single feature makes all the difference.

Here's how Facebook Sponsored Stories work:

* You post a status update about a brand, such as a check-in, like or a piece of praise.

* Because that signal of affinity is so ephemeral within the news feeds of your friends (or perhaps may never even be displayed there), the brand can now choose to pay Facebook to turn your status update into an ad.

* Your friends (and only your friends) will then see your status update in the right gutter of Facebook.com, along with your name and profile picture.

Facebook has taken pains to point out this new ad product is legal, ethical and authentic--and they're right. This allows a brand to take a legitimate brand observation that a consumer has already shared with his or her friends, and turn it into a longer-lasting impression that will only be distributed to those same friends.

It avoids the messiness of sponsored conversations (where brands pay people to spam their friends) because the initial Facebook post occurs authentically and without a material relationship between the poster and the advertiser. Further, as Jim Squires of Facebook product marketing, says: "All privacy settings are honored," meaning your status update will only be visible as a paid ad to those same folks you have allowed to see your content in the first place.

Facebook also has developed a page within their Help Center to educate consumers on the implications of Sponsored Stories.

There is no doubt in my mind this is an authentic and legal advertising product, and I'll leave it to others to determine the philosophical implications -- such as whether this moves us "ever closer to identifying completely as consumers, trying to please the corporations."

But there is a single, practical question that comes to mind: Why didn't Facebook offer a programmatic and scalable way for users to approve each and every paid distribution of their content? In our new, more transparent world -- which Facebook has helped to create for us -- wouldn't it be more "social," respectful and transparent to alert consumers their posts will be used as paid advertising and allow consumers to grant explicit permission on a case-by-case basis?

I can imagine the possible arguments against giving consumers the chance to say "no." Perhaps there was concern too many would reject the opportunity, but wouldn't the fact some reject and others approve their posts as ads actually increase the authenticity, value and attention given to the ad impressions? Or maybe it was feared consumers would ask for a share of the revenue, but Facebook controls this and simply does not have to offer a revenue share -- nor should it. That would call into question the motivation of every bit of brand praise offered on their platform.

And by avoiding the opportunity for permission, Facebook has created the potential for brands to damage relationships when consumers are surprised and disappointed to see themselves become advertising. Perhaps someday this sort of social advertising will be commonplace, understood and accepted, but advertisers participating today in Sponsored Stories run the risk of backlash when people ask "who gave you the right to turn my post into advertising?" and the response is "Please see paragraph 2.1 of Facebook's Statement of Rights and Responsibilities."

With consumer concerns over privacy in social channels increasing, brands could find the negative reaction of the minority outweighs the benefits of Sponsored Stories.

So close and yet so far. I cannot imagine it would be difficult for Facebook to add a single step to its Sponsored Stories process that protects brands and consumers while simultaneously making this ad product more effective. Envision signing into Facebook, seeing you have a message, and learning that a brand wants to share your post with your friends. You may think "hell, no" and click "decline," or you may click "accept" with a sense of pride the brand wishes to use your content and a feeling of affinity in being able to support a favorite product or service.

Reaction to Facebook's Sponsored Stories is percolating across the social Web. Perhaps consumers and brands will accept it, but if the number and volume of detractors grow, Facebook can and should add a permission feature rather than scrapping this ad product. Sponsored Stories has enormous potential! I'd be happy to see the authentic praise my friends offer for their favored brands, provided they've considered and approved it. That would be far more interesting to me than any traditional ad. And I'd be thrilled to have Disney--a brand I love--take anything I post and turn it into an ad to my friends, but please do me the courtesy of asking first.

Facebook came close to getting their execution of Sponsored Stories perfect, but I hope they'll quickly discover the necessity of giving consumers real-time control rather than relying on the IP language buried in their terms and conditions.