Facebook thumbGreat news, everyone! Recently, Facebook made public some changes to its historically draconian contest policy. Whereas before, it was against the Terms of Service for brands to host contests or promotions on their Timelines that involved user action on Facebook to enter, Facebook now is allowing brands to run contests on Timelines with only a few strings attached. Let’s see what the changes mean for you.

The fine print

First and foremost, let’s cover the nitty-gritty.

First, promotions are still not allowed to take place on personal Timelines – that means if you’re Gino of Gino’s Pizzeria, you cannot start a contest on your personal profile for a giveaway your shop is hosting.

Similarly, you cannot ask users to enter your contest by sharing, liking, or posting something to their own personal Timelines – so contests or promotions that ask users to take action independent of a brand Timeline are a no-no.

Finally, without an app it’ll be harder to utilize more advanced features like e-mail capture. Even though you do lose some functionality by confining the contest to your Timeline, the tradeoff is a much larger reach.

So how do advertisers benefit?

In short, the rule change will help us get extremely cheap impressions. By coupling the incentives of contests with the power of the Graph, you’ll be able to generate a large amount of reach for a relatively small cost. After all, a luxury item can be peanuts compared to a large advertiser’s typical daily ad spend. Combined with a small ad spend to promote the contest, an advertiser could see a really nice boost in impressions – after all, that’s why so many brands violated the T.o.S. for contests in the past.

Essentially, you can swirl in a contest into your media mix to help boost those earned impressions. Of course, our best practice recommendation is to create contests that are both engaging and on-brand; no endless iPad contests, please.

Who are the losers in this change?

A cottage industry has formed around Facebook Contest Apps, and many of those companies are primed to be in a tough position now that the terms have changed. I suspect we’ll see a re-emphasis from those players on ease of use and advanced functionality. And, after all, there’s no rules saying you can’t do both.

And of course, it would be hard to imagine this isn’t exactly why Facebook has decided to make the change to their T.o.S. – additional ad spend. I’m sure there are other concerns as well: making Facebook a more engaging and rewarding space for small businesses who don’t understand or can’t afford custom third-party applications, providing a more engaging experience for users, and so forth. I also see this as a vouching for their content algorithm; they’re confident that the deluge of contests that may follow will be handled efficiently and properly by their system.

What do you think of the changes? Let me know in the comments.

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Dan Wilkerson is Marketing Manager at LunaMetrics, a Google Analytics certified partner that also specializes in social media, search engine optimization, and PPC. You can follow him @notdanwilkerson or @LunaMetrics.