MarketingInsideOut.com

After weeks of speculation, Facebook’s new ad system, dubbed Facebook Ads, was revealed Tuesday. Facebook CEO Mark Zuckerberg said Facebook’s new technology represents a new era in which commercials are replaced by messages planted in online conversations between friends. Blockbuster, CBS, Sony Pictures, Coca-Cola, Fandango, eBay and Verizon are among the initial partners.

The three-pronged effort launches tonight and will basically allow companies to create their own Facebook pages, which can serve as the spring board for viral apps, and then allow users to add company information and updates to their own profiles and mini feeds. Then there’s an ad system for advertisers and an interface to gather insights into people’s activity on Facebook that marketers care about.

Insights that come from the social network’s members who reveal their purchases, eBay product postings, and other things they’ve done on some 40 Web sites (so far) off-Facebook and have them appear on their profiles. That ultimately can provide advertisers with information to target ads to just the people most likely to be interested.

According to the new release:

Advertising messages will gain distribution through what Facebook has termed the “social graph,” the network of real connections through which people communicate and share information. When people engage with a business’ Facebook Page, that action will spread information about that business through the social graph.

This enables advertisers to deliver more tailored and relevant ads to Facebook users that now include information from their friends so they can make more informed decisions.

Word of mouth (personal referrals) is by far the most persuasive element in product or service selection. Face it, we’re herd animals, and even the skeptics often act on the recommendations of those they know and trust. This is why the Facebook platform could be revolutionary. It could potentially allow marketers to harness this one-to-one trusted recommendation engine.

So the appeal of using people who like a product as brand ambassadors is obvious, but I wonder if there will be diminishing returns if Facebook members’ news feeds end up chock full of paid placements and “friends” feel like shills. The devil will be in the details of how this all actually works.