For Madison Avenue, Facebook just got a little less free.
Last week, the massive social network announced that brands, advertisers, and marketers that want to run contests or sweepstakes on its platform have to go through an approval process first.
Getting that approval could be a new revenue stream for Facebook: according to multiple sources in the marketing industry, they're being told that running a promotion in a Facebook application or "fan page" requires buying ad space too.
It's pricey. The minimum ad buy is $10,000 for 30 days, using Facebook's self-service advertising system, according to documents seen by CNET, or $30,000 for 30 days of Facebook home page ads. Priority in the approval process will be scaled, based on how much advertising space has been purchased. It's a move that one marketing industry professional called, in perhaps a bit of hyperbole, "a little Death Star-ish."
A Facebook representative declined to confirm and said the company did not have any comment beyond official documents released on its Facebook Marketing Solutions page.
Let's step back. Cracking down on contests and promotions might seem draconian, but it's actually important for Facebook: the U.S. state and federal laws that govern sweepstakes are extremely complicated, and by allowing only approved contests, Facebook is making sure that its bases are covered.
"Any promotion that any brand, product, or company would run has to have a terms of service against it," said Gunter Pfau, CEO of the Stuzo Group, an agency that has developed numerous Facebook contests and sweepstakes for clients. "Also, depending on the prize value, they need to be filed with various state regulatory agencies."
What, exactly, is new for contests? If a brand is running a contest on its fan page, it has to be handled through an embedded, separately developed application--not, for example, in the page's "wall." Promotions also can't involve Facebook users manipulating their user photos or status messages specifically for the contest.
Legal experts agree that this is necessary. "The (new Facebook) guidelines really cover only a narrow subset of promotions, specifically sweepstakes, contests, and similar competitions," explained Thomas Williams, a partner at the Chicago law firm Howrey, who specializes in trademark law. "That type of contest or promotion is governed by a myriad of state and federal regulations, so what I think Facebook is attempting to do here is merely shield itself from liability that arises out of its users' potential violations of these laws."
Williams continued: "I think it's a prudent and reasonable step on Facebook's part. There are lawyers who specialize in sweepstakes law, and there really are a lot of twists and turns to it."
One thing it'll also do, Stuzo Group's Gunter Pfau explained, is keep dishonest campaigns and promotions off the Facebook platform. "I think it's great news for consumers," he said. "I think what Facebook is doing is really laying these guidelines in place for companies to protect consumers more."
But what about the new ad spend requirements? Facebook has historically pitched its developer platform and fan pages as a free way for advertisers and marketers to tap into the power of "the social graph"--its 300 million-plus active users and their connections to one another. And while it's clear that the company sees these free pages and applications as a stepping stone for ad dollars--Chief Operating Officer Sheryl Sandberg, for example, regularly gives Madison Avenue talks about the company's "engagement ads"--it doesn't have a long track record of requiring advertisers to pay for something that used to be free.
"It makes sense for Facebook, but (it's) a little discouraging to advertisers," commented Alisa Leonard-Hansen, who holds the title of social-media evangelist at digital-marketing firm iCrossing. "Facebook is continually trying to discover new ways to monetize, and they picked up on the trend that advertisers were using their pages to run contests and other promotions. I think Facebook was looking to be able to benefit from this marketing trend."
The ad spend requirements, too, could be considered partial compensation for the new human resources required in Facebook's approval process. Each company running contests on Facebook now has a designated advertising sales representative, and fan pages will continue to have to be policed for potential violations of both advertiser regulations and sweepstakes law.
There might not be a lot of friction as the new regulations go into effect. Companies that don't run contests on their Facebook fan pages or applications won't be affected. Even some that do, especially small-scale fan pages that could easily go unnoticed by Facebook, won't have to change much. "Of course, there are going to be savvy marketers who skirt this and run (contests) under the radar," Alisa Leonard-Hansen said.
It really goes without saying the obvious: this is Facebook's service, and it can do what it wants with it. That doesn't mean marketers will stop grumbling. As one put it in a phone call to CNET, "This is another example of Facebook saying, 'Sorry, eat it, you've got no choice.'"
Corporate tools take note: You can tell Twitter exactly what you're doing, and it'll tell LinkedIn too.
Chalk one up for the cringe-worthy marketing term "personal branding": there is a new partnership between Twitter, hub for informing the world exactly what you're doing and thinking at all moments of the day, and LinkedIn, the business-networking tool on steroids. In an announcement Monday, the two companies explained that LinkedIn status messages can sync with Twitter.
"The business use case of Twitter is turning out to be very important, and more and more people are finding that the persona they create for themselves on the Web is part of their resume in many ways," Twitter co-founder Biz Stone said in a joint video with LinkedIn founder Reid Hoffman that was posted to the LinkedIn blog.
So, in short, LinkedIn's "status" feature now syncs with Twitter with an optional check box--a feature that the two companies say should be rolling out over the next few days. Likewise, can set your Twitter status as your LinkedIn status by using the hash tag #li or #in, so that you can rest assured that your tweet about "watching Gossip Girl and eating cold pizza" won't immediately show up to potential clients or employers trawling your LinkedIn profile. (Full disclosure: This was my Twitter status tonight. If you believe that it renders me professionally unsound, please feel free to let me know.)
All snark aside, this is probably a very good bet for LinkedIn, which continues to grow fast and make money but which hasn't yet really jumped into the latest social-networking trend of real-time, streaming information. Inking a partnership with Twitter is much easier than launching some other kind of initiative to get members to update their statuses more often. Tweets sent to LinkedIn, presumably, could also be grouped in with LinkedIn status messages to form some kind of business-intelligence live stream. The sort of information that people want to share specifically with colleagues and professional associates could be of interest to high-end advertisers or the market research community.
Twitter, meanwhile, is going to want to stay in the limelight of the business community as it considers a long-term business model--one of the microblogging service's potential moneymakers has been launching a "dashboard" of analytics for people and companies who use it primarily for professional purposes rather than, you know, filling the world in on which beer was just discovered in the back of the fridge.
Also for Twitter, this is yet another potential source of tweets as it attempts to become the world's foremost repository of real-time information. Earlier this year, MySpace announced an official way to sync Twitter and MySpace status, and in a matter of weeks its link-shortening service had become the second most popular on Twitter (trailing Twitter's preferred Bit.ly).
Facebook, meanwhile, appears to have been more reluctant: a Twitter app on its platform has pulled tweets into status messages for some time, and an unofficial app lets members tag selective tweets with the hashtag "#fb" to cross-post them to Facebook, but the only time that Facebook has put out a big, official announcement about syncing with Twitter was when it added an easy-sync feature for "fan pages," profiles for brands and marketers.
Not surprising. Twitter is a hot name in marketing these days, and in order for Facebook to establish fan pages as an ideal spot for brands to build a presence, an easy Twitter sync is a selling point. But in the long run, it's an advantage for Facebook, which once tried to buy Twitter and was snubbed, to keep its treasure trove of what-the-world-is-thinking somewhat to itself. After all, it can get away with it: with well over 300 million active users, Facebook is significantly bigger than Twitter, and could be diluting its own product by openly sourcing status messages out to Twitter. LinkedIn, better known for its networking features than any kind of status updating, isn't running that kind of risk.
Until then: "At SFO airport at bookstore. Deciding between @gladwell and @tferriss. Need real, serious insights. Thoughts? #li."
Well, this is an interesting tidbit: Computer giant Dell told Internet News that its "Twitter sale alerts" have added up to about $1 million in revenue.
As we all know from Mike Myers' "Dr. Evil" character in the Austin Powers movie franchise, a million bucks isn't a whole lot of money for a major multinational corporation. But it does have something to say about how Twitter is transforming from gimmicky messaging tool to marketing powerhouse. Fire-sale start-up Woot showed that it's possible to take advantage of Twitter's rapid-fire nature to advertise fleeting deals; shoe retailer Zappos has gotten praise for using Twitter for customer service.
Low-cost airline JetBlue, as the Internet News article points out, also uses Twitter for both fare deals and customer service.
More compelling is what this can mean for Twitter's own not-yet-existent business model, which looks like it might involve premium accounts for businesses using the service. With companies touting retail success, this could widen the window of opportunity for Twitter to start encouraging them to, well, pay up.
A team of researchers from the University of Georgia has come to a conclusion that will undoubtedly turn the tech world on its side (ha): if you use Facebook to promote your lovely self, it shows through. Narcissists, or those psychologically defined as "excessively egotistical," will inflate their profiles on the social network with more photos, massive friends lists, and packed activity feeds.
As we used to say on the playground in third grade, duh.
"We found that people who are narcissistic use Facebook in a self-promoting way that can be identified by others," study leader and Ph.D. student Laura Buffardi said in a Live Science article about the study. Past research back in the dinosaur days of the Web had revealed similar conclusions about narcissists and personal Web pages. Imagine how hard it was to self-promote when you had to know how to use HTML to turn the background of your personal homepage pink!
In order to conduct the study, untrained observers were shown Facebook profiles and asked to identify which ones belonged to people who are classified as narcissists. The narcissists' profiles were easy to pick out, the researchers noted.
The report is published in October's issue of the Personality and Social Psychology Bulletin academic journal.
"Narcissists might initially be seen as charming, but they end up using people for their own advantage," study co-author W. Keith Campbell said to Live Science. "They hurt the people around them and they hurt themselves in the long run."
So it looks like now the prolific Internet chatter about oversharers, bloggy self-promoters, and "wantrepreneurs" now has some academic basis.
Urban events site Going.com, which targets party-friendly 20-somethings with a hipster slant, announced earlier this week that it has expanded into local event ticketing. This means that promoters and event hosts on Going can now sell tickets for their concerts, benefits, parties, and other social get-togethers through the site.
The structure is much like a standard ticket site's "will-call" option; no paper tickets are mailed. "You go to the venue or the place of the event," Going CEO Evan Schumacher explained in an interview with CNET News.com, "and we tell (you) to bring your credit card or ID."
Just like the rest of Going.com, the new ticketing service is limited to New York, San Francisco, Chicago, Boston, and Los Angeles. And Schumacher assured me that it won't be a free-for-all due to security concerns.
"The first thing (promoters) do is they have to go through a registration process, which includes a credit card transaction validating that they are who they are, and that they represent the organization they say they represent," he said. He estimated that this approval process should take a day or two. "We actually reach out to the venue or the organization that they say they're selling tickets either for or at, and make sure that this is an accurate representation as well."
In other words, it'd be difficult for you to use Going to monetize your next house party.
And, he added, ticket resellers will not be able to use Going to scalp tickets purchased from, say, Ticketmaster at inflated prices. "We don't get involved with tickets that are at major venues," he explained. "It's not a marketplace like an eBay."
Going has cited Pollstar Magazine figures that put the U.S. ticket sales market at $3.6 billion and rising. That revenue potential is why a relatively niche-based events site is willing to take this kind of risk.
"Every ticketing site has to deal with fraud prevention," he said. "People will try all kinds of things, I'm sure, and that's why we're focusing on a high-touch validation at this phase."
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