May 19th, 2011

Facebook Lifts Ad Restrictions


Facebook has changed its promotions guidelines, loosening some of the marketing policies that may have handcuffed alcohol, gambling, dairy, firearms, pharmaceutical, and gasoline brands.

Going forward, companies will not answer to Facebook on issues such as marketing to minors, running contests that require purchase, messaging about possible benefits and side effects of prescription drugs, etc. Instead, they’ll answer to the local authorities when their practices violate laws by country, state, and municipality. ClickZ reached out to the legal community and marketing practitioners to gauge what it means for Facebook ads and promotions.

Eric Goldman, associate professor of law at Santa Clara University, said, “Facebook is free to develop its own ‘house’ rules for advertising and promotions for its site that augment prevailing law, but advertisers still need to work through the applicable laws even if Facebook deregulates its house rules.”

Alan Chapell, president of legal and privacy consulting firm Chapell and Associates, said Facebook’s move was designed to shield itself from potential legal liabilities as well as the complexities of regional laws.

“How do you try to set up rules that work in every jurisdiction in the world?” he said. “Facebook does not want to put itself in the position of being the world’s policeman. And it also doesn’t want to be giving legal device. What happens if a marketer relies on what Facebook told them and then gets dragged off to a gulag somewhere? Or gets sued in Germany because of what Facebook told them and the Germans change the law overnight? It’s a huge nightmare.”

Chapell said Facebook is trying to establish the same legal security that has been traditionally afforded to TV stations as publishers. “When you see an infomercial,” he explained, “the station to my knowledge only has a certain amount of responsibility to make sure the infomercial content is meeting jurisdiction of laws.”

Marty Weintraub, CEO of online marketing firm AimClear and author of the book “Killer Facebook Ads,” took the news as a sign that Facebook feels it’s rid of many of its spam issues of the past.

“Facebook’s regulations were spawned largely from its early advertising roots, where the ecosystem was dominated by nasty spammers and [hackers],” he said. “They needed to tighten the regulations in a big way to clean things up. With Facebook Ads achieving more mainstream prominence, to an assumed revenue of $2 billion per year, this is Facebook’s acknowledgment that they have arrived and that the crap has been cleaned out of the pool.”

At the same time, Weintraub hinted Facebook’s moves could draw the ire of consumer privacy advocates specializing in protecting children from online ads. “As a marketer, I’m delighted,” he said. “The old rules were complicated and, to some extent, seemed somewhat arbitrary. As a parent, I have different feelings, because I’m loath to expose my teenage daughters to the type of stimulus and pitches I expect advertisers will lob their way. All of that said, Facebook is the big winner because now a larger pool of advertisers can run a wider array of promotions to a bigger audience base. Facebook is optimizing Facebook for revenue.”

Casey Peterson, social media manager at Murphy USA, said that while he doesn’t anticipate major Facebook strategy changes for his gasoline retail brand, the development was still welcomed. “The freedom to use Facebook promotions across more of our product offerings will hopefully help us better serve our customers,” he said.

Oz Sultan, CEO of marketing firm Sultan Interactive, said the policy changes weren’t clear enough. “There’s still a degree of ambiguity to Facebook’s operating methods for ad review and compliance that will most likely continue to confuse advertisers and agencies for some time,” he said.

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