Offerpal Media, one of the companies at the center of a bitter dispute over misleading advertisements on social networks, on Thursday launched a revised policy designed to "forbid any offers that are misleading, deceptive or otherwise objectionable."
Companies like Offerpal are enlisted by many of the big gaming companies built on social networks like Facebook; they help those companies make money by letting game players earn points and virtual goods by completing offers and surveys rather than paying real money.
They make a lot of money doing so. So do the game companies, like Zynga and Playfish (recently acquired by Electronic Arts), which in turn advertise heavily on the likes of Facebook to recruit new players.
But then the negative press started to emerge: many of these "free" offers and surveys actually had hidden costs attached to them that weren't adequately disclosed. Some companies like Zynga started backtracking and going so far as to ban offers altogether. Facebook and MySpace, the two biggest social-network platforms, made very public revisions to their policies. But the controversy continued, and both Facebook and Zynga were named as defendants in a federal class-action lawsuit.
Offerpal, which replaced its CEO amid the controversy, has now come out and said that while it's setting a basic standard for advertisement quality, game makers and publishers enlisting Offerpal's services can opt to be even more stringent. "Offerpal will rate all offers by quality and allow its partners to select a quality level of compliance ranging from 'Level 1' for minimal restrictions to 'Level 5' for highly conservative restrictions," a release explained.
Will the new restrictions keep angry bloggers and consumers--not to mention lawmakers--at bay? More importantly, are they going to amount to anything more than smoke and mirrors? We'll see.
The industry P.R. frenzy over scams in ads and offers on social networks goes on: Facebook announced on Thursday evening in a post on its developer blog that since it updated its developer platform terms of service this summer, it has disabled two ad networks that it says were running deceptive advertisements.
This comes in the wake of allegations that some companies that power offer- and survey-related moneymaking operations for social-gaming applications on platforms like Facebook's have effectively been scamming users into paying for services without disclosing those costs. One of them, Offerpal Media, has been particularly visible in the crosshairs.
"This battle is not new and it's far from over," the post by Facebook's Nick Giano wrote. "We faced stimulus scam ads on our own system earlier this year and pushed them off the site with rigorous enforcement. We did the same months later when deceptive ads from third-party ad networks appeared in applications. We're doing that again now as we see them appear in the form of offers."
Additionally, Facebook--which has said for quite some time that many of the activities highlighted in the "app scam" controversy are already banned by its terms of service--included in the post that more than 100 developer applications have been either "suspended or brought into compliance" over advertising issues, and that more than half of them were used by at least 1 million Facebook members per month. It's not clear whether these were all related to scams, or to other advertising-related infringements like the Burger King marketing campaign that encouraged users to "unfriend" their contacts in exchange for a free cheeseburger.
Facebook representatives declined to name which ad networks or applications it has banned. But the company did ban two companies in June, Social Hour and Social Reach, citing ad network policy violations. It's possible that the two ad networks mentioned in Facebook's blog post were banned months ago, given the "since July" language.
Earlier this week, MySpace--another big destination for social-network apps--announced that it had updated its terms of service to ban app scams. Prior to that, several prominent application manufacturers announced that they had banned potentially deceptive offers, despite the fact that they are responsible for a big chunk of virtual-goods revenues.
An update was made to this post at 7:51 a.m. PT on November 6 to note that Facebook banned two ad networks in June.
In the wake of a firestorm over just how much of social-gaming companies' profits can be attributed to potentially scammy offers and incentives, News Corp.'s MySpace has taken a stand (and, it could be said, taken advantage of the PR opportunity) by coming out vocally against them.
"We're adding a fifth principle (to our developer terms of use) that clarifies a specific use case that we feel is particularly damaging to the user experience: promotions that include hidden renewals without specific opt-in will not be permitted," a company blog post by CEO Owen Van Natta read. "Because it's our belief opt-out offers are misleading and do not have the best interests of the users in mind, we will be updating our Terms of Use this week to better clarify this for users and developers."
What exactly is he referring to? In many of the most popular (and profitable) games built for big social-networking platforms like Facebook and MySpace, players can progress faster in the game by either buying virtual goods with "real" money, or by completing offers and surveys from a partner company like the prominent Offerpal Media. Critics say that many of these offers aren't actually free, and unwittingly can sign users up for expensive subscriptions or programs.
After a public confrontation between TechCrunch's Michael Arrington and Offerpal CEO Anu Shukla at last week's Virtual Goods Summit event in San Francisco, game makers like Zynga and RockYou put out statements saying that they're cracking down on offers that are potentially misleading.
Could this lead to real industry changes? Yes. But keep in mind that Facebook, the biggest destination for these social games, already bans this stuff in theory. "Ads cannot be deceptive or fraudulent about any offer made," the company's advertising guidelines read, and adds "if an ad includes a price, discount, or 'free' offer...the destination URL for the ad must link to a page that clearly and accurately offers the exact deal the ad has displayed (and) the ad must clearly state what action or set of actions is required to qualify for the offer."
But judging by the amount of sketchiness that allegedly takes place on the platform, it seems like advertisers aren't necessarily following these guidelines. Whether MySpace's stance against them can lead to a legitimate crackdown has yet to be seen.
CNN anchor Rick Sanchez wasn't really high on crack this morning, and the reason his Twitter feed said so wasn't the phishing scam that's been going around--it was a lone hacker, the microblogging service said later on Monday.
"The issue with these 33 accounts is different from the Phishing scam aimed at Twitter users this weekend," a post on the Twitter blog explained. "These accounts were compromised by an individual who hacked into some of the tools our support team uses to help people do things like edit the e-mail address associated with their Twitter account when they can't remember or get stuck. We considered this a very serious breach of security and immediately took the support tools offline. We'll put them back only when they're safe and secure."
The same hacker was responsible for compromising a number of Twitter's most popular accounts, including those belonging to pop singer Britney Spears, media outlet Fox News, and President-elect Barack Obama.
Twitter has said, meanwhile, that the phishing scam--which used messages from Twitter friends to trick users into entering their user names and passwords into a bogus log-in screen--is under control. "Our on-call team was able to attend to the matter quickly and prevent too many people from being affected," Twitter's blog post read. "Our support team is definitely going to have a busy week because we reset a bunch of passwords just to be on the safe side."
(Credit:
Twitter, screengrab by Ian Schafer (ianschafer.com))
Clarification: Twitter has clarified that this incident was the work of a hacker and separate from the phishing scheme.
CNN anchor Rick Sanchez is one of the most popular users on microblogging service Twitter, with nearly 40,000 followers and a Twitterholic rank in the top 20. Unfortunately for Sanchez, it looks like he fell victim to the phishing scam that has been plaguing the popular service for several days now.
In a "tweet" that has since been deleted, Sanchez's account displayed the message "i am high on crack right now might not be coming into work today"--and we're pretty sure that did not come from Sanchez himself. He has now posted a response tweet explaining that his account was hacked.
Over the weekend, reports began to surface that there was a password-stealing phishing scam making the rounds on Twitter. Disguising itself as a private message that led to a fake Twitter log-in screen, the scam was widespread enough for Twitter to put a warning message on all members' home pages alerting them of the issue.
Why did so many people fall for it? Well, the fake Twitter log-in screen looked pretty darn authentic. And because there are so many third-party applications based on Twitter's application program interface (API), tons of avid users are used to throwing their Twitter passwords around left and right. That is, it goes without saying, probably not the safest habit to get into.
It looks as if the aim of the phishing scam may have been to take over the accounts of some of the service's most popular users: the account for Fox News, as well as pop singer Britney Spears, also had their passwords stolen and offensive tweets sent out. The Fox News tweet, for the record, concerned the sexual orientation of pundit Bill O'Reilly; the Spears tweet made some tawdry allegations about her naughty bits.
UPDATE: Twitter has posted an official blog entry explaining that this is different from the phishing issue. Rather, it was a hacker's doing:
The issue with these 33 accounts is different from the Phishing scam aimed at Twitter users this weekend. These accounts were compromised by an individual who hacked into some of the tools our support team uses to help people do things like edit the email address associated with their Twitter account when they can't remember or get stuck. We considered this a very serious breach of security and immediately took the support tools offline. We'll put them back only when they're safe and secure.
Props to marketing blogger Ian Schafer for grabbing this screenshot.
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