This web consultant went straight to the social networking site's chief revenue officer for insight on its latest initiatives.

In talking with Mike Murphy, chief revenue officer at Facebook, I learned 45 minutes of almost all brand new information about Facebook. And this is after having done deals with Facebook as recently as this past summer. That really speaks to the innovation happening at Facebook as well as the desire and need the company has to communicate and educate the marketers and agencies of what is new and exciting at the wildly popular social networking site. 

What's new at Facebook?
The latest thing happening at Facebook is a new product coming in the new few weeks, currently named "Sponsored Stories." The premise is that a marketer could insert a promotional message about a product/promotion into users' News Feeds. When a user logs on to the Facebook page, among the other News Feeds being fed to their page, a marketer's message would also be included.

Of course, these can be targeted (demographically, geographically, et cetera) and any given Sponsored Story will be inserted into a specific user's News Feed only once. The goal is to integrate marketers' messages into the environment to provide more contextual relevancy and engage the users in the ways they use the site.

Pricing is still to be determined, although Facebook is reaching out to the ad community and partners for feedback. And they will only run about 25 campaigns in Q4 to test the new product. But expect to see more innovative things like this coming out of Facebook in the future. 

Who's selling Facebook?
I, for one, was very confused when the MSN deal came down as to who was selling what on Facebook. And until my conversation with Mike Murphy, I had it all wrong. So here's the clear picture for anyone else who might have been confused.

Facebook has a lean, mean sales force of about 12 people. While they have done a fantastic job, they really wanted much broader exposure to the marketers and agencies, and found Microsoft Digital Advertising Solutions (MDAS) as a great way to do that. MDAS now sells all standard IAB advertising on Facebook. They committed to sell all inventory on Facebook. And given their massive sales force and relationships with marketers, this seems like a good move for both parties.

Facebook is still selling all custom programs including Sponsored Groups, Next Step Links and the upcoming Sponsored Stories. But if standard IAB units come into play, the Facebook sales force will then work with the MDAS sales force to bundle these in. Right now, the target audience for these custom programs is about 100 clients, which the Facebook team is concentrated on selling. 

News feed controversy
Everyone was up in arms the day that Facebook decided, with no warning, to allow updates from friends' profile pages to be automatically fed to a user's friend network through their News Feed and Mini-Feed. While the feature may be useful and desired by the user base, Facebook admittedly did not do a great job at communication and education. The company didn't give users warning of this change, nor did they properly educate users on the controls that they would have on who could see what in these feeds.

To be fair, there are many controls that Facebook had in place and continues to add so that users have full control over who sees what. The company just needed to provide that communication and education in advance of pulling the switch on the feature.

Since the debacle, Facebook has sent a full apology to users, added more privacy settings and has sent several other messages regarding updates on these new privacy settings. What it really comes down to is that the change alone scared users, giving them the feeling that their data was being compromised. When the users learned more about the product, its features and the privacy controls, backlash subsided and Facebook now feels users appreciate and utilize the new feature. Lesson learned: Communicate early and often.

Beyond the college audience and retention
So why did Facebook expand their registration beyond college kids anyhow? Wouldn't that compromise the integrity of the site and their audience, and possibly make it less safe?

In talking to Facebook, this does not seem to be the case at all. They are very focused on the 18- to 24-year-old audience and do not expect this to change. Since the site is relatively new in terms of "graduating classes," it is still early to tell what will happen as the audience ages. But the goal of expanded registration was to add more 18- to 24-year-olds, done through word of mouth through the current members' friends and networks. 

Facebook is not doing any marketing to retain the current user base, but as one goal of this expanded registration, the company hopes that users will either stay as alumni in their current college network (one-third of users are alumni according to Facebook's statistics) or join a new regional network upon graduation. The likelihood is that they will add more 20-somethings to their user base this way, and time will tell what happens to the current base as they get older. Right now, they do not see users migrating away from Facebook as they get older, noting that this observation is mostly gleaned from the three graduating classes they have seen.

As far as safety is concerned, Facebook addressed this quite clearly. Facebook is very different than other social networking sites. When users join, they do not have full access to the entire Facebook network with full profiles. They have access to only the network they join, and even then must ask permission to "friend" someone (connect with someone new). Prior to someone accepting you as a friend, you can only see a limited profile.

There about 40,000 networks on the site and that is comprised of college, high school, work and local/regional networks. There are network privacy controls based on a user's age and more privacy controls users can set for themselves. Plus, users are not rewarded for having more friends (as with some of the other social networking sites). So, the likelihood of users to try and accumulate tons of "friends" just to have them is low. They want to connect with their own networks and friends of friends whom they know or want to meet. This is also evident in that users use their real names rather than ambiguous aliases.

Facebook did say that the users were well informed about the expansion of registration (as opposed to the data feed controversy) and the company hasn't seen any backlash from users. Marketers did express some concern about still being able to only target college users (which they still can) and ensuring no dilution of the audience. To date, Facebook seems to have provided these assurances to marketer/agency satisfaction.

Measuring success with social networking
In mainstream online media we measure everything… impressions planned vs. delivered, clicks, CTR, ROI, conversions-- you name it. And while many of these metrics are important and relevant, Facebook has an additional tilt to the measurement discussion.

The way Facebook sees it is that campaigns on social media sites are very different from mainstream online advertising, in that success is really measured not on clickthrough rates, but rather on interaction rates and engagement with the users. If a user becomes engaged with a brand on Facebook in a way they feel most comfortable, they will be more likely to pass that offer/message on to a friend. And this can create a powerful viral, word-of-mouth way for a marketer to increase exposure. So, when doing campaigns on social media sites, remain less corporate and talk to users how and when they are most receptive to the message. This type of marketing is evident in the current and upcoming products that Facebook offers.

Conclusion
After taking a few missteps with communication, it does appear that Facebook is now poised for greater success. They have an enormous user base that continues to grow, and even more so now with expanded registration.

Facebook does seem to be innovating for both users and marketers. However, they always need to keep in mind they need to communicate well to keep users feeling comfortable and excited about using the site, as well as providing effective integrated programs for marketers. 

Pam Stein is the CEO of Charlotte's Web Marketing, an online marketing consultancy, specializing in online media planning and buying, strategic partnerships, search and affiliate marketing, and sales support expertise. Read full bio.