Facebook’s New Contest Rules Hurt Small Businesses

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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?

Tagged as: blog, contests, facebook, Marketing, promotions, small business, Social Media