Friday, December 16, 2011

NAD Approves Using Promotion to Increase Facebook “Likes”

The National Advertising Division of the Better Business Bureau (NAD) recently approved leveraging special deals or discounts to increase “likes” on Facebook, provided the promotion is not misleading. 
In the Coastal Contacts case, the NAD reviewed a promotion of  a “free” product offer to increase the number of fans who “like” Coastal. Offering coupons and discounts in exchange for a “like” on the Facebook platform is not uncommon.  The NAD concluded such an exchange constitutes a general “social endorsement” and further found such a social endorsement is not misleading to others simply because the “like” was gained through use of a special offer or discount.
NAD Challenge Details
Coastal advertised to its Facebook page visitors that they could receive a “free” pair of glasses by clicking the “like” button.  Once they clicked the like button, the offer details would be revealed.
A competitor alleged the promotion was deceptive for two reasons.  First, the offer was fraudulent because the material terms of the “free” offer were not disclosed in proximity to the “free” offer.  Second, it alleged the “likes” were fraudulent endorsements that “perpetuate the misleading suggestion that Coastal enjoys broader support than it would actually have in the absence of its misleading ‘free’ promotion.” 
NAD Ruling
The NAD found that because a Facebook “like” could mean many things to consumers—such as liking the promotion, liking the company, or simply wanting to “share” with their friends—it was not misleading or deceptive to employ a “like-gated” promotion on a Facebook fan page.  Such promotions can deliver giveaways, coupons or discounts in exchange for “liking” the advertiser. 
However, the NAD did find Coastal’s free offer needed to be modified to include additional information in close proximity to the word “free.”  Despite this flaw, the NAD found that the offer was not deceptive since consumers were actually able to obtain a “free” pair of glasses. 
The NAD further found that, because the benefits of the promotion through “liking” the page were valid, any increased visibility was not fraudulently obtained.  The NAD cautioned its conclusion would be different if consumers who participated in the “like-gated” promotion were denied the promised benefit or offer.  The NAD compared deceptive promotions to other misleading activities such as paying a service to artificially inflate the number of “likes” and requiring employees to “like” their employer’s page without disclosing the employment connection.
If you condition participation in a promotion such as a contest, sweepstakes, or discount offer on a customer’s “liking” you on Facebook, be sure your promotion is not deceptive or misleading. 
Authors: Paul Van Slyke

Gregory Casamento
Jason Mueller