Facebook to App Ads: Be on Your Best Behavior

New Policy Cracks Down on Use of Personal Information

Posted by David Berkowitz on 08.03.09 @ 11:32 AM

David Berkowitz

Before back to school season begins in earnest, Facebook is schooling anyone running ads on its site.

Some estimates say developers on Facebook's platform could make $500 million this year, much of it through advertisements appearing on the applications they run on Facebook. (This is about as much money as some project Facebook itself will make.) Last week, Facebook released new guidelines for these ads in a blog post titled "Good Ads Make for a Good Ecosystem."

Moving forward, Facebook will block advertisers that don't comply with its guidelines, listed in full here, and it recently revised these guidelines -- with which Facebook itself says it also complies. Facebook's Nick Gianos wrote, "In two recent cases we prohibited entire advertising networks from providing services to applications, because the networks weren't compliant with our policies and failed to correct their practices."

Facebook still allows apps to incorporate "virtual goods, subscriptions, advertising, or whatever you choose." But there are two types of advertisements that are no longer allowed to run on the social network:

Anything that sends "user data received from Facebook to ad networks," which limits the potential for behavioral targeting.
Any ads that display user data in applications, "unless specifically approved by Facebook."

The latter category seems troubling for some of those applications that show personal information such as pictures of your friends or their birthdays in an ad unit. Nick proceeds to write, "For now no such ads are authorized." I'm hearing some authorizations are in the works, so we'll see if those come in as of noon PST on Monday, when these updated policies take effect.

As for user data limitations, it's important to appreciate the difference between Facebook and most other publishers. Facebook and its developers have created their own standards with various forms of engagement ads that are custom to the publisher and the social experience there. The voluntary Interactive Advertising Bureau guidelines don't apply, so Facebook created its own guidelines and enforces them.

Facebook, furthermore, created an open environment where developers collectively have the opportunity to earn even more than Facebook does, without giving Facebook a cut. Some of these publishers pushed the limits of mining Facebook profiles for personally identifiable information and marrying this with behavioral data. This is a major leap from accepted behavioral targeting practices of using anonymous data from consumers' actions and serving more relevant ads.

Most likely, the changes will not wreak havoc among Facebook's developers. The new guidelines won't affect a good number of them, although a few more may get shut out, some will have to make changes, and others will get approval to keep doing what they've already been doing. Facebook will likely inspire other publishers to review their own standards for advertising in ways that take the user experience into consideration, and that will only create positive ripple effects throughout the industry.

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David Berkowitz is director of emerging media for 360i. He blogs regularly at Inside the Marketer's Studio and 360i's Digital Connections. He also contributed to the just-released Social Marketing Playbook.