300px US FederalTradeCommission Seal.svg  Small Business: Dont Fall for These Unethical and Illegal Facebook Practices

Recently a few friends and clients told me about an opportunity they had to get a lot more promotion for their businesses. A local marketing company has set up a website and Facebook page that is a guide to our local area. The purpose of these online properties is to keep area residents and tourists up to date on events in the area, as well as promote local businesses.

All well and good, and normally I would think it was a good idea. I love when businesses promote one another. And as a booster of all things local, I figure that anything that promotes the Lancaster area is a good thing, right?

Not so fast. It turns out that this seemingly wonderful opportunity is one part unethical and one part “illegal.” Why? Because the businesses and events in question are being charged to be promoted on this particular blog and Facebook page.

Wait! What’s wrong with that? It seems like a perfectly legitimate way of making money and promoting local businesses at the same time. After all, magazines and other printed directories have been doing this for years.

But in this case, it’s wrong, and local businesses who “pay to play” in this situation, can get themselves in trouble. Here’s why:

It Violates Facebook’s Terms of Service

First, in the case of Facebook, this is a violation of the platform’s Terms of Service. If a business is paying to get placed on a Facebook business page, whether it be in the form of a status update, link, or whatever, that qualifies it as an advertisement. Section III, Part A of Facebook’s Pages Terms clearly states:

Third-party advertisements on Pages are prohibited, without our prior permission

Plain and simple. You can’t sell the space or status updates on your own Facebook Business Page to other businesses. As helpful as it is to have a page that promotes area businesses and events, the only way to do it is without charging. In other words: for free. And while many communities have these pages that are incredibly helpful, Facebook could shut them down if it comes out that they are charging for the service.

It Violates Federal Government and Industry Guidelines

In addition to violating Facebook’s guidelines, the way these events and business listings are presented, is as if they are merely editorial mentions. There is no mention anywhere that money is changing hands. In other words, if I go to either the blog or Facebook page in question, it appears to me as if this is merely someone endorsing the particularly businesses and events by posting about them and offering details. But really, these are paid ads. The only way to get listed on these properties is through payment. And there is no indication that this is the case.

Under both Federal Trade Commission guidelines, and the guidelines of the Internet Advertising Bureau, all ads must be clearly labeled as such. That’s why when you see ads on your Google search pages or Facebook, they are always clearly labeled as ads.

google ads1 Small Business: Dont Fall for These Unethical and Illegal Facebook Practices

In fact, the term that is used is, “clear and conspicuous disclosure in online ads.” Even within Facebook’s newsfeed, items that are either “sponsored” or “promoted” are clearly marked.

Now, I’ll admit that both the FTC and IAB guidelines are just that: guidelines. These aren’t codified law. On the other hand, the FTC does enforce laws, and has the ability to act and enforce such laws:

Guides are “administrative interpretations of laws administered by the Commission.” 16 C.F.R. § 1.5.
Although guides do not have the force and effect of law, if a person or company fails to comply with a guide,
the Commission might bring an enforcement action alleging an unfair or deceptive practice in violation of the
FTC Act.

Disclosure is Always Important

In the same way that bloggers are required to disclose when they are writing about something for which they received consideration (free products, discounted services, etc), so too are those who sell space on blogs or other online properties. Even if this practice weren’t a violation of Facebook’s Terms of Service, the marketing company in question would be required to clearly label each blog post and each status update as a paid advertisement.

And where it gets even stickier, is that according to the FTC guidelines state that it’s the advertiser who is responsible for making sure that all necessary disclosures are present and accounted for. In other words, if you pay to have a blog post written about you, or to get placement elsewhere online, YOU are the one responsible for making sure people understand that this is an advertisement, not just a regular blog post or status update.

And these guidelines apply from every platform, from Twitter to Pinterest, and so on.

This is why when I post something about one of my clients on Facebook I always disclose that they are my client. They don’t pay me to share their content, and I only share the content that I can personally endorse, but I always reveal that we are in a client/consultant relationship. Rand Fishkin of Moz (formerly SEOMoz) did a great job covering much of this when he asked the question, Is Social Media Marketing Illegal? back in 2009. In speaking with others, and breaking down the FTC guidelines, he concluded that much of what we do is legal, but that there are some practices that clearly cross the lines of being legal and ethical.

The ease of use, and inexpensive (“free”) nature of social media platforms has led to a lot of practices that not only are unethical, but often a violation of both platform rules and local, state, or federal laws. Marketers should know better, and businesses and organizations need to stay up on the law as well. Plenty of marketing consultants get in trouble for bad practices, from astroturfing and fake reviews to creating fake profiles and black hat SEO. And the businesses that hire these companies can’t claim ignorance; they are liable for the practices conducted by their consultants. Authenticity and disclosure are important, even when it seems awkward or difficult.

As wonderful as it might seem, and as great as the exposure would be, businesses and nonprofits need to avoid paying for placements on Facebook outside of the platforms native advertising options. And they also need to be careful when they pay for editorial exposure on blogs or other sites.

Have you run into this sort of thing in your town? How have you dealt with these practices?