For a company that thrives on transparency, Facebook's advertising isn't very transparent. Check out your Facebook home page, note the ads on the right side, and tell me what companies they're for. Sure, the ads probably cite brand or company names in the headlines and images, but who are the companies who paid for those ads? Where will you end up if you click those ads? And an ever better question is, what will happen if you "Like" the ad–will you be giving information to a trusted brand or a spammer?
Now go to Google, conduct a search, and check out the AdWords on the right side. Who sponsors those ads? And where will you end up if you click on those ads?
Google advertising is transparent, and Facebook advertising is not. The difference is a single line of text: AdWords creates transparency by including a "Display URL." Within ad AdWords, advertisers can set different Destination and Display URLs, but the two must be within the same domain so that (in the word of Google's AdWords form), "users know what to expect when they click your ad." (The reason there is a difference between the Destination and Display URLs is so that advertisers can direct people to a specific page in their domain while displaying the much shorter root domain in the ad ).
It would seem to benefit advertisers (and Facebook itself) if the social network embraced more transparency. Check out the examples below, which pair ads I collected from Facebook with ads that appear next to Google search results. The image in the first ad prominently displays Budweiser, but is it a Budweiser ad? I doubt that Anheuser-Busch is offering "70% off Beer and Alcohol." If the ad is from A-B, then the lack of transparency harms the brand by discouraging clicks and likes. And if the ad isn't from A-B, then the lack of transparency harms consumers who are duped into clicking the ad.
Knowing what to expect when you click an ad doesn't seem like a novel concept, so I wonder why Facebook, an organization committed to increasing transparency in the world, is so opaque with its ads. With the addition of a single line of text–a Display URL or some other identification of the ad's sponsor–Facebook could make its advertising a great deal more transparent. If openness is so good for us Facebook users, shouldn't it be the same for Facebook advertisers?