• by Mark Walsh , February 9, 2011

Facebook has extended the recently introduced Sponsored Stories ad unit to its self-serve ad system. The new ad format draws content from users' posts to use in ads that appear on friends' Facebook pages. It taps into user actions such as "Likes" and check-ins for comments on places, products and events that can be used to promote particular brands in display ads throughout the site.

By adding Sponsored Stories to its self-serve ad platform, brands will now be able to pay for additional distribution of stories on their Facebook fan pages, as well as user updates that mention them in Facebook's ad space.

One option within the system is to select a Facebook Page, Place or application as the destination for a Sponsored Story ad. Selecting a brand page as the destination, for example, will create a "Like Story," which promotes News Feed stories about the viewer's friends liking a brand's page.

"This type of ad is most effective when it can tell users that multiple friends have Liked your Page, and is therefore best paired with standard Facebook ads, promotions, or tab applications that simultaneously drive Likes, seeding the Sponsored Story," according to the Inside Facebook blog.

The other option is to create a "Page Post Story to promote News Feed stories about Facebook page updates. This approach can help drive clicks to an outbound link to vote in a poll, sign a petition or some other call to action.

Likewise, app developers can create an App Story ad to highlight stories about a Facebook member's friends using a brand's app. Businesses can do the same to promote check-ins on their Place pages.

Sponsored Story ad prices appear to be the same as their traditional counterparts when targeted to the same audience, noted Inside Facebook. "If the advertising community finds that Sponsored Stories perform well, they may shift spend away from traditional Facebook ads to this more complicated, but more persuasive ad unit," the blog stated.

Web marketing firm HubSpot suggested that advertisers test Sponsored Stories to see how the cost-per-lead compares with other paid programs. "With the launch of Sponsored Stories, Facebook is directly competing with Twitter's new Promoted Tweets advertising platform. It seems like paying for extra reach of organic social media content is a trend that is catching on," advised a post Wednesday by HubSpot's Kipp Bodnar.

Like prior Facebook ad initiatives, however, Sponsored Stories have come under criticism on privacy grounds because users can't block their posts from being used in ads. MediaPost columnist David Berkowitz, who leads the emerging media practice at 360i, has suggested that Facebook offer Sponsored Stories on an opt-in basis instead.

"On the most basic level, it could offer a blanket opt-in or opt-out option to participate in Sponsored Stories, housed under Privacy Settings and linked to any Sponsored Story that runs. Facebook could also give users more granular control," he wrote in a Mashable post. Facebook has backtracked before on ad programs following a privacy backlash, most notably with its ill-fated Beacon effort in 2007. Whether it pulls back on Sponsored Stories will depend on whether opposition to the new format gains steam or diminishes as it rolls out. Facebook is already under pressure from Congress over its plan to give developers access to users' current addresses and mobile phone numbers.