Are Facebook news feed ads turning the site into MySpace?

Remember when your Facebook news feed was strictly for keeping you up to date on your friend’s whereabouts, activities, and perhaps what their Shih Tzu had for dinner?

That seems like a simpler, more innocent time. A time when the boards at a hockey game were plain white and a movie theatre soft drink came in one of those garish nuclear paisley cups, not one branded with a Pepsi logo and images from the latest summer end-of-the world blockbuster.

But wait, that wasn’t the 70’s, it was last June. That’s when Facebook introduced ads that streamed right into your news feed. The inevitable move was an instant success for the social media giant; by November of last year it was making $4-million a day from these type of placements.

For Facebook, which has faced white-hot scrutiny about its monetization plan since its IPO last May, the ads are an unmitigated success. Influential customer relationship marketing (CRM) agency Merkle says Facebook news feed ads are outperforming traditional marketplace ads (the ads that show up on the side of the page) by a hefty margin.

The company says these “sponsored stories” are targeted, and will deliver content that is relevant to each user. My own experience says this is not untrue. On my Facebook feed right now there is content from a local paper, an ad for trading platform eToro, and an ad about how to use Facebook mobile. Right now I don’t mind these ads, and I find myself skipping past them rather than griping about them. The sponsored content ads from the local paper have in fact become the main way I view their content, and I rarely go directly to their site anymore.

The once clean user interface that was the hallmark of the 2007 Facebook, however, is clearly gone forever. If you recall, this was a big reason it was able to overtake MySpace in the middle and end parts of the last decade.

In 2006, MySpace signed a three-year, $900-million ad deal with Google that seemed to cement its status as the go-to social network. But as Gigaom’s Bobbie Johnson pointed out, the deal “…actually ended up being a weight around its neck”. The increased ads combined with an already hyper-cluttered layout to produce an almost unnavigable experience. This made it easy for Facebook, which was still years away from any Rupert Murdoch types demanding they turn a profit, to swoop in.

So will the aggressive monetization also kill Facebook, and clear the way for another competitor to take over? It’s unlikely. Facebook, having learned the lesson of its fallen predecessor will no doubt watch the user experience like a hawk, and will figure out how many ads we are willing to accept.

They’ll have to be hyper vigilant in coming months though; it’s estimated that potentially noisy and disruptive video ads placed into Facebook newfeeds could yield the company another $1.5-million a day.