Digital Media

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.'"

(Credit: Ustream)

Twitter was bombarded on Thursday afternoon by the shocking news that a six-year-old boy had climbed into a homemade hot-air balloon and taken off over Colorado--the microblogging service's timeline temporarily slowed to a crawl and its trending topics were filled with tags like Colorado, Denver, and #balloonboy.

He was never actually in the balloon, apparently: CNN reported later on Thursday that he was found, safe, hiding in a box in the attic of his family home.

Live video streams from news outlets' helicopters showed the saucer-shaped balloon speeding through the air and then making a relatively soft landing. But then those same news outlets began to report that there was no one inside--sparking even more debate and speculation on Twitter.

My colleague Stephen Shankland ran a test and found that in a 30-second span, 836 tweets mentioned the word "balloon."

The boy reportedly lives in Fort Collins, Colo., and the balloon was built by his parents, who are avid storm-chasers.

It surfaced somehow amid the Twittering mess that the family had appeared on reality show "Wife Swap," and a video of its three sons singing a rap song has begun to rack up views on YouTube (mildly not-safe-for-work due to lyrics).

This post was updated at 3:17 p.m. PT.

Goin' back to Philly.

(Credit: FX)

The absurdly offensive "It's Always Sunny in Philadelphia" makes its season-five premiere Thursday amid a hard social media push by the FX network.

In addition to the standard features (meet the cast, wallpapers, episode guide), FX has included Twitter integration, exclusive video clips, and an awesome trailer mash-up creator.

To collect the buzz around the premiere, its Twitter page is gathering all the tweets with the hashtag #sunnyfx. There seems to be a decent amount of activity there, but it should really pick up as viewers rush to Twitter to offer their thoughts on the first episode.

The creators (and stars) of the show have also flocked to Twitter, maintaining their own accounts: Glenn Howerton, Charlie Day, Rob McElhenney, and Danny DeVito.

By far, the coolest thing the site features is the trailer mash-up creator. Built on GorillaSpot's video editing platform, the mash-up creator features signature clips from all the seasons of "Sunny." You can splice these clips together, with music and titles to make your own season-five trailer. From there, you can post it to a variety of social-media sites including Facebook, MySpace, and Blogger. You can also get the embed code, which lets you place your creation anywhere. The trailer I created is included at the end of this post.

I love to see companies doing really innovative things on the Web with their marketing campaigns. Here, FX went above and beyond what's expected and created an engaging experience for fans and potential viewers.

The National Football League has had a love-hate relationship with social media.

Some teams tweeted to fans while choosing players at the NFL draft back in April. But then last month, a few NFL teams told players they couldn't tweet or text-message during a team function.

On Monday, the league announced that it had modified its social-media policy to limit Twitter and social-networking use by players, coaches, league officials, and even the media.

The NFL said that it will let players, coaches, and other team personnel engage in social networking during the season. However, they will be prohibited from using Twitter and from updating profiles on Facebook and other social-networking sites during games.

In addition, they will not be allowed to tweet or update social-networking profiles 90 minutes before a game and until post-game interviews are completed.

The rules even extend to people "representing" a player or coach on their personal accounts.

The NFL didn't just stop with the league itself, though. The organization also said that media attending games will be prohibited from providing game updates through social networks.

"Longstanding policies prohibiting play-by-play descriptions of NFL games in progress apply fully to Twitter and other social media platforms," the National Football League said in its statement. "Internet sites may not post detailed information that approximates play-by-play during a game.

"While a game is in progress, any forms of accounts of the game must be sufficiently time-delayed and limited in amount (e.g., score updates with detail given only in quarterly game updates) so that the accredited organization's game coverage cannot be used as a substitute for, or otherwise approximate, authorized play-by-play accounts."

The fact that the NFL won't allow tweeting during games isn't new. The league instituted the policy for players after they started using technology in touchdown celebrations. But the updated regulations now extend to just about anyone who is remotely involved in the game.

Why the NFL decided to change its policy now is unknown. But it might have felt compelled to update it after Bengals wide receiver Chad Ochocinco said in a recent Ustream chat that he plans to circumvent the rules and tweet while playing.

It could have also had something to do with Donte Stallworth's Twitter account. The player was suspended by the NFL after he was charged with DUI manslaughter and served 30 days in jail. His Twitter account features tweets discussing his suspension and incarceration.

Still, if Ochocinco or any other player tweets during a game, it might be difficult for the NFL to enforce the rule. And since players can create accounts that the NFL might not even know about, it's doubtful that the league will be able to monitor all social-media activity. We'll just have to wait until the season starts next week and see what happens when someone breaks the rules.

Look for Ochocinco to test them first.

Music service iLike, best known for third-party applications on platforms like Facebook, made its big iPhone app launch today. The company has rolled out an app for alerts about local concerts, and also launched its previously announced program for bands and artists to create custom fan applications.

Apple still has to approve the "Local Concerts" app, according to a release, but iLike is excited about its potential impact regardless.

"It's something that we really felt was a good idea on paper as we started developing it," iLike CEO Ali Partovi told CNET News, "but as it reached completion and we started using it ourselves it really started seeming like a killer app."

iLike already has had a concert app in the iTunes Store. The company didn't promote it much, Partovi said, because the iPhone 3.0 software was what really made the app worthwhile, and so iLike was waiting until that came out.

"We found that there really were a few key capabilities that the iPhone OS didn't support at the time," he explained, referring specifically to push notifications and some software tweaks that enable better personalization. So the revamped iLike concerts app, thanks to iPhone software upgrades, will scan the music selection on an iPhone or iPod Touch, and send pop-up alerts when a band or artist that the user listens to will be in town.

"It turns the iPod into much more of a live device to be connected to the world of live music," Partovi said of the free app.

The custom artist apps, meanwhile, haven't changed much from when iLike originally announced the program in May. Over 250 artists have signed on to the program, the company said, including Pete Yorn, Reba McIntire, and Enrique Iglesias. iLike takes half the revenues from sales of the apps, and charges a $99 fee with the right to serve ads if the artist in question decides to offer its custom app for free.

CNET News reported last month that iLike was also in talks with the major music labels to open a download store, after a deal to offer full-length songs through subscription service Rhapsody failed to materialize.

Amid economic woes, stagnant growth, and a management shakeup, onetime social-networking pioneer MySpace has announced that it has cut its head count by slightly under 30 percent in what the company calls a "return to start-up culture." Well, that's a nice way to put it.

Reports had circulated that MySpace would be laying off nearly half its employees in a move that had delayed its relocation to a bigger office space in the Los Angeles area. With the layoffs, MySpace's full-time U.S. employee roster will be down to 1,000 people--which means somewhere just south of 500 jobs were cut.

MySpace said that the layoffs are evenly distributed across all U.S. divisions of the company. Since MySpace also operates a number of offices overseas, it's not yet clear how they were affected (if at all), and representatives declined comment as to whether international offices would be affected down the road. CNET News has heard rumors that there may be consolidation in some of MySpace's European offices, something that the company did late last year when it merged its Amsterdam and Berlin offices.

"Today the domestic restructure is the only info we can share," a MySpace representative said in a phone call Tuesday.

Owen Van Natta, CEO of the News Corp.-owned social site, said in a release: "Simply put, our staffing levels were bloated and hindered our ability to be an efficient and nimble team-oriented company. I understand that these changes are painful for many. They are also necessary for the long-term health and culture of MySpace. Our intent is to return to an environment of innovation that is centered on our user and our product."

Van Natta, the former chief operating officer at Facebook, was hired as CEO of MySpace late in April after a short stint at the head of start-up Project Playlist. Former CEO Chris DeWolfe had stepped down earlier that month, reportedly at the behest of Jonathan Miller, the new digital czar at News Corp. Executive shakeups at MySpace had been happening sporadically for nearly a year at that point.

MySpace's new executive lineup gives it solid entertainment street cred: Van Natta was joined by former MTV digital exec Jason Hirschhorn and former AOLer Michael Jones. Late last year, another MTV digital-media executive, Courtney Holt, joined MySpace as the head of its new MySpace Music division.

A source with knowledge of the situation said that senior management was spared Tuesday's cuts.

Launching MySpace Music, which focuses on free streaming music supported by advertising, was a return to the company's roots: once a hub for indie band promotion and community, MySpace had grown massive before Facebook began to catch up to it in international and then U.S. traffic. Partnerships with the likes of Google and a prominent endorsement of the OpenSocial developer initiative didn't help it regain traction as a networking destination.

Holt told CNET News in March that MySpace Music's traffic was "huge." But record label executives--who are partners in the MySpace Music joint venture--reported dissatisfaction with the revenue it was generating.

Last update at 11:56 a.m. PT.

A nice little summer shopping spree for AOL: Under the auspices of new CEO Tim Armstrong, the company has acquired "hyperlocal" news site Patch and hipster-oriented events listing site Going.com.

The acquisition of Patch isn't too much of a surprise. Armstrong founded and invested in Patch while at his former gig as Google sales chief. The start-up offers a model for local news on the Web and plans to have launched in a dozen cities by the end of 2009. Going, meanwhile, has been around since 2006 and offers event and invitation services along with ticketing. It's likely that AOL will use its technology to take the service beyond its party-friendly current target demographic.

"Local remains one of the most disaggregated experiences on the Web today--there's a lot of information out there but simply no way for consumers to find it quickly and easily," Armstrong said in a release. "Going forward, local will be a core area of focus and investment for AOL. The acquisitions of Patch and Going will help us build out our local network further with excellent local services that enable people to stay better informed about what's going on in their neighborhood."

He's not the only new-media executive thinking local: in his keynote address at the Advertising 2.0 conference on Wednesday, IAC/InterActiveCorp CEO Barry Diller called local "one of the few areas that hasn't been colonized" on the Web. IAC owns Citysearch, with which AOL has partnered in syndication deals.

Social music start-up iLike has come a long way from its early days as the way to "dedicate a song" to your friends on Facebook.

On Wednesday, the Seattle-based company plans to unveil some fresh new features for the set of tools it offers to artists who want to connect with current and potential fans. It's hooked up the application program interfaces (APIs) of Twitter, YouTube, and MySpace to allow for more extensive content syndication from artists' iLike pages, and has released an iPhone app-creation product to boost their mobile presences.

"Marketing and communication are the primary things that artists are still in need of a third party's help in," CEO Ali Partovi told CNET News. "Music production and distribution, I think, there are pretty successful and well-established services right now that essentially let you do it yourself."

The Twitter, YouTube, and MySpace add-ons are understandable supplements to the existing "artist pages" feature that iLike says more than 300,000 bands and artists now use. With Twitter's API, artists using iLike will be able to embed a Twitter widget on their iLike pages as well as syndicate iLike updates out to their Twitter feeds. They'll also be able to automatically publish a video to YouTube when they publish it to iLike, and vice versa; with the News Corp.-owned MySpace, they can add iLike "RSVP" links to MySpace concert listings and cross-post blogs and videos to both services.

For iLike, which got its start as an iTunes plug-in and now specializes in developer applications for social networks like Facebook, Bebo, and Hi5, this move is another step toward making it a more flexible, distributed alternative to simply running a MySpace band page. iLike, in addition, recently rebranded its Facebook app to simply "Music."

As part of the new feature package, it's also selling artist analytics about where fans are located, how much they interact with iLike pages, and how well individual pieces of content like videos and blog posts perform. That'll cost $99 per year, Partovi said.

But the center of the new iLike offering is the "turnkey system" for creating custom iPhone apps. Basically, this is a relatively quick way for an artist to create an iPhone app that gives fans access to tour dates, iTunes Store purchasing, videos on YouTube, blog entries, and related content.

It's also a new revenue stream for iLike, which will take a cut of the sale of each iPhone app if an artist chooses to charge for it, and will charge an activation fee if the artist chooses to offer the app in the iTunes Store for free. As a launch promotion, that activation fee is currently $99; a formal price will be announced next week.

There might be some advertising down the road, too, though Partovi declined to say when or how. "Our plan in terms of the business model, like everything else we've done, is (to) put it out there and develop adoption, and over time to figure out the best way to monetize it."

Not everyone's going to want to download iPhone apps to keep tabs on every single one of their favorite artists, and while Partovi said that a sort of universal iLike "favorite artists" app isn't yet on the company's iPhone roadmap, he expects there are enough artists with rabid fan bases for the apps to be a success.

"I don't anticipate a whole lot of fans downloading a hundred different apps for their favorite artists," Partovi said, "but for a fan that has a small group of artists that they're really passionate about, there are fans who will want everything that they can get their hands on from that artist."

And what happens if one of the artists pulls a Nine Inch Nails and gets rejected by Apple due to "objectionable" content? iLike is responsible for the submission process, and hence also responsible for what happens in the event of rejection, but Partovi implied that he's keeping his fingers crossed that there won't be an issue. "We're going to take care of the submission," he said. "We can't guarantee approval, per se, but there's common elements from app to app. We're hoping that once we get some traction that it'll be generally easier."

Social media is coming to Warner Bros. Television Group's online properties, thanks to a smallish AOL property called Socialthing.

A feed of members' activity across Warner Bros. entertainment sites--TheWB.com, KidsWB.com, DC Hero Zone, MomLogic, Essence, and TheCW.com--will be displayed on their Socialthing profiles. So, if you watch a "Gossip Girl" video on TheCW.com or play a game on DC Hero Zone, it'll show up in your feed, and you can keep tabs on what your friends are doing as well (and share bits of content with them). There will also be fictional Socialthing profiles for characters like the "Gossip Girl" cast as part of a broader promotional effort.

As some others have pointed out, it's nice to see AOL finally showing some synergy with parent company Time Warner. You know, before it gets spun off and all.

AOL purchased Socialthing, a would-be competitor to FriendFeed, last summer and integrated it into the "People Networks" division anchored by the company's earlier acquisition of Bebo. Last month, AOL relaunched Socialthing as "a revolutionary new platform that brings social-networking services to Web sites and enables publishers to attract new users and keep them engaged wherever they are on the Web" and announced that it would be working the service into its MediaGlow content network.

From what it sounds like, it won't be all that different to what Viacom has been doing with its own "social platform" technology, Flux. Right now, members can log in with AOL and AIM accounts, but it'll soon be expanded to include Facebook, Gmail, Yahoo, and OpenID credentials with the help of the various data portability tools out there.

Disclosure: The CW television network is a joint venture between Warner Bros. and CBS. CNET News is published by CBS Interactive, a unit of CBS.