Ads are out, sponsored posts are in for Twitter & Facebook

As Facebook and Twitter roll out the latest advances to their business models, they’re clearly turning away from the Internet staple of display advertising.

Facebook is pushing marketers to create Facebook native-content — a post on their brand page — and pay to promote that post to a wider audience. Today, for the first time, Facebook will begin placing those sponsored stories in the user’s main News Feed.

It’s not an “ad,” it’s a real post by a friend that Starbucks paid to make sure you see. Social networks are selling attention instead of traditional advertisements.

“This [the News Feed] is the place where marketing on Facebook is going to feel like the rest of Facebook,” Mike Hoefflinger, director of global business marketing, said on stage at the Facebook Marketing Conference today in New York.

“We are evolving from ads to stories,” Hoefflinger said. “Ads are good, but stories it turns out are better.”

Likewise, Twitter’s marketing strategy involves marketers paying to place Twitter-native content — a tweet, a hashtag — in front of a larger audience.

You won’t see a banner or box display ad intruding on either of these sites. You just see more content, some of it normal, some of it sponsored. That’s especially advantageous when it comes to smartphones. Both Facebook and Twitter just announced that their mobile apps would begin showing this sponsored content.

Since smartphones have so little screen real estate to work with, users really don’t want an ad overtaking a chunk of it. They just want to see content, and Facebook and Twitter have managed to make the ads be a form of content.

Can news organizations follow the same path? Many sites, such as Techmeme, Gawker, and Reddit, make good use of sponsored posts. But mainstream news sites largely have not taken to selling businesses the right to post a story on their sites.

There are obviously many ethical issues for a news organization to contend with. Sponsored posts would have to be clearly labeled and attributed, and the content should be accurate and not mislead readers. But if handled properly, news organizations might find sponsored content delivers more value for both marketers and readers.

Facebook and Twitter certainly think so.