Facebook Head of Ad Products Gokul Rajaram shared some thoughts on social advertising using such meaty words as clustering, user actions, signals and advertising… and the future of social advertising. Facebook’s ads, like Google, are bid driven (CPC/CPM), and Rajaram was the former Google guy who started Chai Labs (later bought by Facebook). Social advertising, of course, isn’t new (see IAB piece). However it’s just starting to become more visible, and it will be fun to see how people respond when their own likeness is inadvertently used in ads (because they “liked” some company property).

He explains 3 different types of ads:

1. Social ad: brand message (example: Toyota ad, plus social context for friends)
2. Sponsored story: simply user action (example: my friend “liked” Toyota)
3. Display ads: Non-social (Rajaram hopes to phase these out)

So what’s this mean to video? Expect to see fewer targeted but generic display ads. Instead watch for more of these more targeted and customized/dynamic ads in online-video preroll and “wrap around” ads.

For instance, if you saw your friends’ name appear in a dog-food ad, you’re clearly going to pay more attention. If you see his or her photo with his pet… you’re hooked. This level of customization is now possible with the combination of websites, portable social-media tools (Facebook, Google Plus) and ad network solutions.

Rajaram says he’s working to build “awesome experiences,” provide analytics and more automated solutions for self-serve advertisers.

Now here’s the thing. If Facebook is gonna use my face, name and likeness in an advertisement to my friends, then…. SHOW ME THE AD-SHARING MONEY.