1. Introduction

Over the last few years, social media websites and services have exploded in growth. Facebook has transformed from a networking tool primarily used by college students in the United States to having over 350 million users worldwide as of November 2009. In 12 months, Twitter has gone from having approximately 3.5 million unique visitors a month to having over 23 million unique visitors to its website as of October 2009.

Given their tremendous growth, both Facebook and Twitter have become appealing and increasingly important advertising and promotional tools for companies. In fact, some companies have even hired full-time employees and “twinterns,” whose jobs involve sending messages about special promotions via Facebook and Twitter.

Recently, both Facebook and Twitter have enhanced their advertising and promotions guidelines. This Alert describes the primary features of Facebook’s new rules regarding contests and sweepstakes, as well as the key concerns for companies using Facebook and Twitter for advertising purposes.

  1. Facebook’s New Promotions Guidelines

Facebook’s new Promotions Guidelines, which became effective on November 4, 2009, distinguish between administering or operating a contest, sweepstakes or other similar promotion through a Facebook page (regulated), and merely publicizing a promotion through Facebook (generally allowed). The Facebook Guidelines can be found at www.facebook.com/promotions_guidelines.php.

  1. Administering a Promotion Through Facebook

A sponsor administers a promotion through Facebook if it operates or allows access to any aspect of a contest, sweepstakes, or other similar promotion via its Facebook page, including collecting entries, conducting a drawing, and/or notifying winners. There are two ways to do this: one permissible, the other not.

  1. Permissible Promotions

Under the Guidelines, a sponsor may administer a promotion through Facebook only by using a third-party application developed specifically to host the promotion and that operates independently from Facebook’s own “native” functionality. The following conditions apply:

  1. The sponsor must be an existing Facebook advertiser with a Facebook account representative.
  2. The promotion must be approved at least seven days in advance by Facebook.
  3. The third-party application must be placed either under a separate tab on the sponsor’s page or under a separate web address.
  4. The entry page and official rules must state that Facebook does not sponsor the promotion and is not liable for the promotion.
  5. Entry is limited to persons 18 or older.
  6. The promotion must not involve or relate to gambling, alcohol, tobacco, firearms, dairy products, gasoline, or prescription drugs.
  7. Foreign countries that would prohibit or restrict the promotion must be voided.
  1. Prohibited Promotions

A clear purpose of the Guidelines is to distance Facebook from responsibility or liability for the conduct of any advertiser sweepstakes, contest or other promotion. Accordingly, a sponsor cannot use “native” Facebook functionality (as opposed to a third-party application) to administer a promotion, and the following promotional practices are prohibited:

  1. Automatic entry by becoming a “Fan” of the sponsor’s page.
  2. Requiring posting of a photo or other content directly to a Facebook page (rather than to a third-party application page).
  3. Requiring an entrant to sign up for a Facebook account.
  4. Notifying winners through Facebook.
  1. Publicizing a Promotion Through Facebook

Merely publicizing the existence of a sweepstakes, contest or other similar promotion that is conducted at a completely different location, such as the advertiser’s own website, is generally permitted and does not require approval from Facebook. Such advertising may occur via Facebook “wall posts,” on the sponsor’s page, or via status updates on that page.

  1. CAN-SPAM and General Considerations for Facebook Promotions

A sponsor may be held responsible for not complying with the CAN-SPAM law as the sender of a forwarded electronic message if the sponsor compensates the consumer (including giving additional sweepstakes entries) to “refer-a-friend” or otherwise to forward a commercial electronic message. The issue can get complicated on Facebook where users have several different ways to share information. Some of those ways merely involve posting information to the user’s own “wall” or profile page, which arguably should not be covered by CANSPAM. Other methods involve sending messages to friends in a manner more akin to traditional e-mail, which poses a greater risk of triggering the CAN-SPAM laws. This is an emerging area where careful attention to the technology, as well as legal advice, are important.

In addition to its specific Promotions Guidelines, Facebook also has general guidelines for advertising. Most of Facebook’s Advertising Guidelines are based on common sense, but also include requirements to abide by certain privacy and other standards established by Facebook. Facebook’s complete Advertising Guidelines can be found at www.facebook.com/ad_guidelines.php.

  1. Twitter’s Advertising Policies and Best Practices

Unlike Facebook, Twitter has not yet created specific guidelines for sweepstakes, contests or similar promotions. In response to concerns about unbridled spam, however, Twitter has adopted an evolving set of principles and general guidelines that affect advertising, particularly use of automated messaging. (See “Automation Rules and Best Practices Guidelines” at http://twitter.zendesk.com/forums/26257/entries/18311.)

Twitter normally allows the following forms of advertising:

  1. Promoting your own business or website.
  2. Posting unpaid customer recommendations.
  3. Sending sponsored or compensated links and updates that you manually post or approve.
  4. Messages that are sponsored by a third party, if you manually post or approve each such message before transmission.

The following types of advertising are prohibited on Twitter:

  1. Pre-scheduled advertising messages.
  2. Repeated posting of the same advertisements.
  3. Failing to disclose the fact of compensation or sponsorship when posting a message that has been paid for by a third party.

As a general principle, companies advertising on Twitter are well-advised to proceed cautiously and to be cognizant of the emerging guidelines and customs for advertising via social media.