Know the rules before running a Facebook comp

Don’t take any chances ... Done correctly, social media competitions can be a great way for brands to connect with followers, but make sure you obey the rules.

You’ve set up a Facebook page or Twitter account for your brand and started collecting “likes” and followers. What comes next?

If your business is like a lot of others, you might want to run competitions to reward your fans. But tread carefully – you may find yourself flouting regulations or even breaking state laws.

The director of regulatory affairs at the Internet Advertising Bureau, Samantha Yorke, says many businesses are unaware that a game of chance on a social media platform is classed as a lottery, just as it is in the offline world.

This means that it is a legal requirement to obtain a lottery permit from every state and territory where the promotion is running and permit holders must comply with certain rules to ensure the competition is administered fairly.

Yorke says applying for a permit is straightforward and inexpensive and it can last up to a year but the downside is that there is no national licensing system.

“Unfortunately, you have to work state by state and this is a common complaint,” she says. “It can become quite cumbersome if you’re running a competition nationwide and have to apply for licences in every state.”

A game of skill, such as asking entrants to write 25 words or less or running a photo competition, is much less regulated, so long as the total prize package is less than $5000. Yet, while it may be legal, it could still fall foul of the host website’s terms and conditions. Of all social media sites, Facebook is particularly strict when it comes to promotions.

The social media manager at communications agency TCO, Matt Chisholm, points out that Facebook has tight controls for promotions on the platform. For example, all promotions must be housed on a third-party app and you cannot use Facebook to contact winners. Facebook functions such as likes, comments or check-ins cannot be used as an entry mechanism.

Chisholm says, however, that if done correctly, social media competitions can be a great way for brands to connect with followers and show appreciation. “Facebook is not a channel for a one-way message stream,” he says. “It’s about active engagement and rewarding participation. Competitions allow brands to give something back and generate a recognised value proposition. Brands can build a community on Facebook – and communities give to each other.”

He says a successful promotion needs a prize that is worth the time and effort of entering the competition and there should be no ambiguity about what the entrants are being asked to do or the judging criteria. If consumer comments are being amplified to the community to vote on, he says, there need to be moderation guidelines.

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