Tuesday, August 4, 2009

Be prepared to fork over extra $50K to Facebook for contests or custom tabs

More signs of Facebook trying to monetize its popular site this past week...

1. Contests on Facebook - I am trying to setup a contest on a client's Facebook Page. Even though it's being hosted on a different server, FB considers it on their site since it occurs within the Page environment. A contest like this requires a Letter of Indemnification for FB. And to pay for their lawyers' time, FB requires a $50K media commitment and setting up a direct sales account with a rep. That's quite a billing rate for those FB lawyers! Even if they spend 10 hours to review and process the LOI, that's $5,000/hr! Impressive!

The more shocking thing is when we asked for a copy of this new policy at FB:

our legal team actually doesn’t have a public policy for the spend requirement for running contests/sweeps on Pages. It’s an internal policy, which apparently is very common for these types of circumstances.

"Common for these types of circumstances?" What?!? This is unchartered territory here for social media marketing. Sounds like lawyer BS if you ask me.

2. iFrames on a custom tab - One of our iCrossing developers was looking for an iFrame application to build a custom tab on Page. We asked FB about it.

We do indeed have a Facebook Iframe application that we make available to our direct advertising partners that have a current campaign in place.

You know what that means. $50K minimum media spend and setting up a direct sales account. Cha-ching for FB again!

Of course, this is not documented anywhere either.

It all feels a little shady if you ask me. For anything interesting you want to do on Facebook, you need a media commitment it seems. No wonder why advertisers are hesitant to invest in social media! Facebook even makes it tough for agency partners to help our clients invest on Facebook with all this craziness.

In the words of Jerry Maguire -- Facebook, "help me, help you!"



  1. I'm reading this on 11/16. Is this still the case? Unbelievable. I'm working with a designer coming out with a greeting card line. We want to set up a FB contest to select 4 of 16 images to launch. $50K? I don't think so.

  2. Lynnelle,

    Facebook actually released new promotion guidelines earlier this month.

    Also, CNet has a good article on it here:

    Good luck!