Facebook Invites Privacy Concerns with Sponsored Story Ads

Facebook has added Sponsored Stories, a new ad unit to help brands cash in on the popularity of the like button without asking users' permission.

As reported by AdAge, the ad includes the "like button" or check-in functionality that has become so popular among the social network's 600 million-plus users.

Facebook provided the example of a Sponsored Story ad purchased by Starbucks. The coffee company displays the status of a user's friends who check into or click the "like" button both in the user's news feed and as a paid ad for Starbucks.

Check-in posts will show up in the ad feed exactly as the user wrote it, according to this Facebook video explaining Sponsored Stories.

Sponsored ads hew to existing privacy settings users have chosen to control whose feeds they see and who sees their feed also apply to the sponsored stories.

The kicker is there is currently no way for users to opt-out of having their check-in or like action leveraged in a Sponsored Story ad. Facebook's presumption is that a like or check-in implies explicit interest in a product or brand, and that an advertiser should be able to make money from the action.

This is sure to rile privacy advocates and more discerning users who don't appreciate their profiles and content being used without their express consent.

However, Facebook went a little further to protect the way the advertiser is portrayed. Jim Squire, a Facebook marketing manager, told AdAge advertisers that don't want to take the chance of having negative Sponsored Stories pop up about them can limit their buys to likes.

AllThingsDigital likened Sponsored Story ads to Facebook's ill-fated Beacon ad approach, which displayed users' actions without their permission. Facebook settled a class-action lawsuit over this last year.

Core Facebook advertisers are latching on. In addition to Starbucks, Levi's, Anheuser-Busch, Amnesty International, and Unicef are on board, though sponsored story ads will be available to all as a self-service option.

The Sponsored story reveal came a day after eMarketer reported that Facebook earned $1.86 billion in online ads last year, and stands to top $4 billion in 2011.