Facebook’s New Contest Rules Hurt Small Businesses

by Ken on November 7, 2009 · 23 comments

I’m a pretty forgiving person. As Facebook has gone through changes and people have complained, I’ve tried to understand the changes and why they make them. We adapt, and we move on.

But with the new rules that Facebook has articulated regarding promotions and contests, I find myself a bit…boggled. I work primarily with small businesses with extremely limited marketing budgets. Big corporations will have no problem abiding by the new rules (which will cost money) but smaller businesses (which make up a significant portion of Facebook pages) are being left out in the cold.

You can read the new rules here, but in effect, here is what they mean. (Please remember that this is my interpretation of the rules. Feel free to correct me if my interpretation on any of these points is incorrect. Also remember that I’m not a lawyer and can’t interpret either the legal reasons or ramifications of this):

  • All contests must be approved by Facebook at least 7 days prior to the start date – I’ll be interested to see how that happens. It’s hard enough finding out HOW to contact Facebook, but how will they keep up with the pace? I help one of my clients with a weekly contest involving Facebook and Twitter. Some of these are contingent upon certain prizes which are time sensitive. I can’t imagine trying to get them approved that far in advance.
  • All contests must now be done through a third-party application and reside on either the canvas page of the app or in an application box or tab – This is a big problem, because most small businesses, and many larger ones, have not traditionally used applications for contests. Many Facebook users that I know really HATE all the applications that Facebook has. They get to be a nuisance. So now, not only does the business need to either create or pay for the use of an application, but people have to add the app if they want to participate. My clients can’t afford to pay for this, and I would expect that even if they did, the number of entries would drop off significantly as people try to avoid too many apps.
  • The most popular forms of contests are now prohibited – These include contests that utilize status updates, uploading photos, or even providing comments or any other content on a page. These are the types of contests I do most often, and now my hands are tied. The beauty of this type of contest is that increased comments, etc. help push a business higher in the News Feed. Which…if I’m guessing correctly… is why Facebook is banning them. They don’t want businesses trying to artificially influence what places high in the News Feed. My argument to this is: Facebook is self-policing. Let social media evolution run its course. If people get annoyed at a particular business they can either unsubscribe or even hide updates from that particular business. Businesses will learn what their page fans will tolerate. Why constrict us with lots of rules?
  • Contests based on becoming a Fan of a page are now prohibited – This is another popular contest where people are rewarded for helping grow the fan base of a page. They are encouraged to “share” the page and “suggest page to friends.” Again, I’m sure Facebook is concerned about how this influences and muddies up the News Feed, but again, let users decide what is too much or what is undesirable.
  • You can no longer notify winners via any Facebook channel – this includes messages, Facebook chat, or even a post on a wall. This means, that any contest you do, you have to ask for people’s email addresses up front in order to notify them. I know I hate giving that information out up front. I’d rather be notified through a Facebook message and THEN give out my contact information once I have won. Sure, some marketers will love this because they can then harvest a lot of information, but I prefer a more subtle approach.

The upshot of this?

  • Small businesses are the losers. My clients cannot afford to pay for the creation or use of third-party contest applications. They also can’t afford to alienate fans by requiring them to add applications.
  • Small businesses will utilize Facebook much less – I’ll now be advising my clients to avoid Facebook for contests. We will need to be more creative, and instead we will be coming up with contests that drive people to their business websites and blogs. Oh, sure, we’ll still have Facebook pages, but they will see less activity.
  • Facebook users will be further bombarded by applications – Many Facebook users, myself included, love to hide notifications from apps like Farmville and all the other games and quizzes out there. Facebook’s recent changes seemed to recognize that these were a bit of an intrusion. Now they are encouraging a flood of third-party apps.

There are still a lot of questions. How will Facebook police this? I’ve spoken to a few friends who plan on continuing what they are doing in hopes that Facebook is not capable of policing it, and then they risk being shut down. As a consultant, I can’t do that with my clients. I must abide by the rules, and advise my clients of what they can and cannot do. And, I’ll be going back to the drawing board and finding more creative ways to do promotions that most likely don’t involve Facebook.

What are your thoughts and reactions? How will the new rules impact how you run contests and promotions?

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Still seeing a lot of big businesses breaking these rules. It's confusing when the major corps are requiring you to sign up as a fan in return for a coupon, some even want you to allow them to send notifications to your friend list before they will release the coupon or prize. And then there's the ones that limit the coupons or prizes to the first X number of fans, but do not tell you until after you sign up and give them your info that the limit has been reached. I'm talking major players here. Then you hear about bloggers getting Cease and Desist letters for asking readers to become FB fans in exchange for entries in a giveaway. How are the little guys found but the big guys missed?

Sorry, Mark, but that type of contest is also a violation of Facebook's content and promotion rules. Very clearly stated, and others have gotten into trouble for this.

Greetings all,

Try this simple contest on facebook;

Start a Tag Contest to promote your business. From your photo tab; create a new photo album. Then, upload at least two photo's of the items you want to give away. Next, upload a photo to use for the album cover, edit the photo with the contest information to include a contest end date and an off facebook website to view who the winners are.

"Choose the item you want to win and Tag Yourself to that photo"

Please email me with your results.

Mark Fawcett
FawcettGroup
Helping Businesses Evolve

Interesting to read. I recently had a competition started by a friend, through his blog and he used facebook well to grow interest and traffic to the posting for the blog. It seems like harmless stuff. People spreading the good word, but I guess we'll have to watch how we do things like this in the future.

Cheers for sharing this.

Thanks for the comment and update, Brandon. Appreciate your efforts!

Thanks for your great insights on this issue.

I have started a Facebook group to hopefully raise enough concerns for the powers that be to revise these guidelines and make them less restrictive to small businesses and non-profits in particular.

http://www.facebook.com/group.php?gid=196977872384

Thanks for your comment, Steve, and great blog post. I think it's very easy for all of us to be completely unaware of the different types of rules governing contests, promotions, etc. Thanks for clearing some of that up!

I wrote a short post on my blog about contests, sweepstakes and lotteries and how one could get in trouble by running a FB or Twitter promotion. http://3cpatents.com/_blog/Create,_Consult,_Contro...

The prior written approval requirement has been in place since August (http://www.tosback.org/version.php?vid=793) and I've not heard of anyone getting booted for ignoring it.

FB probably doesn't go looking for these issues, but will respond if there is a complaint. I would guess that the first step would be an email telling the marketer to stop, followed by a suspension, and an eventual account shutdown for the most egregious. I imagine most marketers will continue as they have been until they receive a note from FB pointing out the infraction and telling them to stop.

The possibility of a "become a fan for a chance to win" being called a lottery by some state is still an issue.

Daniel, I have no problem with that as long as there is full disclosure on your part. In effect, this goes back to the latest FTC guidelines regarding endorsements by celebrities, bloggers, etc.

I'd only have a problem with it if you get something for free and blog/tweet about it as if you are a disinterested third party who just so happens to like the item.

With full disclosure, I then have the opportunity to weigh the facts. Given that knowledge I have to use that information to decide whether the gift itself colored your review. Anyone who reads what you write would have to make that same decision. A lot of that might be based on the "value" of the gift. For instance, if I'm given a nice car to drive around in as part of a promotion, I'm less likely to take your word.

Ken, I'm curious what you think about the concept of giveaways as opposed to contests. I mean a case where one day a T-shirt, or a gift certificate, or a gift bag is given to me out of the blue, with a simple request that if I like/appreciate it, won't I be so kind as to tweet/blog about it?

Third party apps are a legitimate privacy and security risk. Having played with the Facebook API enough to know what it's capable of extracting from users, I'm now quite terrified to allow apps to access my information, particularly ones supported by skeevy ad networks.

The lottery argument makes sense. Perhaps many promotions like this will move over to Twitter -- with its less regimented manner of interaction, perhaps the legal issues are more irrelevant?

I suspect you are right, but there are enough other ways around that in the language they require that it still doesn't make a lot of sense.

Also, the terms of service for Facebook have, until recently, been pretty well hidden. I just worry that they are jumping into bed too much with those who build 3rd party apps.

Do you have a copy of the previous guidelines? I'd like to compare them to the current version. Neither www.archive.org nor http://www.tosback.org has them.

TOSback does have the TOS from August 28 (http://www.tosback.org/version.php?vid=793) and paragraph 3(9) does say that you need written permission to run a promotion.

I suspect Facebook is concerned about a court construing becoming a fan, or having to make status updates, as consideration given in exchange for a chance at winning something, which would make it a lottery and subject to all kinds of regulations.

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