Facebook opened the floodgates on promotions by lifting a variety of longstanding restrictions on them. It's now perfectly OK to promote tobacco, gambling, firearms, prescription drugs, gasoline, and dairy on social network. You can even welcome minors, open your promotion to people living anywhere and require a purchase to participate.
Facebook says that it wanted to simplify promotion guidelines and "make them easier to understand and consistent with the format of other Facebook Terms & Policies." Oh, please. A more realistic explanation is that Facebook, getting pushback on recent valuations of the company, wants to boost its sales any way it can. And if that means taking money from companies who will dig legal graves for themselves, so be it.
Anyone involved with marketing should know that promotions are legally tricky beasts. In the U.S., for example, you can't charge people to enter a contest. There are limitations on goods you can send between states. And so on.
Every state has own rules, and so do most countries around the world. Sometime before the end of 2009, Facebook banned many types of sweepstakes. But now the company has decided instead to "simplify" its restrictions by pretty much eliminating them.
Just because Facebook does away with its limitations doesn't mean that legal restrictions won't apply. Now, though, it's the advertiser who's on the hook to ensure that the promotion is legal. Of course, that was also true before. But many marketers are basically ignorant of state- and national-level requirements for promotions. In Facebook, cross-border promotions are a foregone conclusion.
Facebook doesn't really care. Lifting its restrictions makes it easier for companies to pay Facebook to run a promotion. Not only does the company want to make more money (who doesn't?), but investors have begun to question how much Facebook is worth. And, as BNET's Jim Edwards has noted, there are serious questions about Facebook's finances.
Valuation is key to a company that wants to attract and retain employees and that plans an IPO by sometime next year, if rumors are to be believed. That means driving up revenue -- and fast. What better way than to let people bungee jump with a frayed cord? So long as they leave their wallets before they leap.
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