Facebook Tightens the Rules on Facebook Platform Ad Networks

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Over the past week, false rumors have been circling on Facebook that the company has recently changed its privacy rules to allow Platform ad networks to incorporate users’ photos in their ads without users’ permission. Last Friday, Facebook issued a statement to debunk those rumors and reassure users that that was not the case, saying that while Platform ad networks can still use profile photos in acceptable ways, abusive Platform ad networks have been and will continue to be suspended.

Today, Facebook took things a step further by announcing new rules for the way Platform ad networks can incorporate user photos. According to Facebook (emphasis added),

To protect user experience and better guide developers and ad networks, today we’re announcing that all ads within applications on Platform must comply with the Advertising Guidelines that Facebook enforces for its own ad system.

Please remember that developers have never been allowed to send user data received from Facebook to ad networks, and we take firm action against this. If you run code provided by an ad network in the operation of your application, be sure you understand what this code does.

Regardless of whether data is being sent to ad networks or not, ads that display user data are not allowed in Platform applications unless specifically approved by Facebook. This applies whether the user data is obtained directly from Facebook or otherwise, and whether the ad or data is rendered by an ad network or developer. We are exploring how we could enable such ads while meeting high standards of user experience, but for now no such ads are authorized.

These new advertising guidelines were just updated to better accommodate Platform, and are effective starting Monday 3 August 2009 at noon Pacific time.

To our knowledge, this is the first time Facebook has said all ads that display user data must be “specifically approved” by Facebook. This could create product development bottlenecks at Platform ad networks who are creating innovative social advertising products.  In addition, developers must now presumably get confirmation that a particular advertising unit is “approved” by the Facebook Platform policy team before rolling it out. That could take a lot of developer time and slow down the A/B testing process for developers optimizing their ad monetization.

It’s unclear whether any current ad units that incorporate user data are currently on the “approved” list – if not, monetization rates for developers serving these ads will take a hit until those ad units are approved. We’re following up with Facebook now for clarification on how the ad approval process will work.

Facebook is also warning developers to be careful about how the ad networks they work with handle user data. Different ad networks make use of user data in a variety of ways, but Facebook wants to be ensure that all Platform ad networks value user trust as highly as Facebook itself does – Facebook suspended two ad networks that didn’t comply with its rules just a few weeks ago.

Finally, Facebook reminds developers that if their apps include policy-violating ads, they are subject to the same punitive measures that Facebook imposes when apps violate other Platform rules.

Facebook will enforce against developers and applications that include policy-violating ads — such as by imposing a temporary restriction on functionality or permanently disabling the application — as we do for other instances of policy violation.

As we’ve discussed recently, when we see ads that undermine trust, abuse users, or otherwise violate policy, we take action to stop them. And 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.

In other words, Facebook is taking big steps to make sure Platform ad networks don’t violate user trust. At the same time, Facebook wants to cultivate a diverse monetization ecosystem inside the Facebook Platform. Obviously, if users get scared and traffic the Platform less, everyone will have less inventory to monetize, so Facebook is doing the right thing by making sure users don’t have bad experiences with Platform ads.

Preserving trust is certainly vital for the long term viability of the Platform, but individually approving each ad unit seems like an expensive solution for Facebook. Unfortunately, short of more significant changes to the rules on who can serve ads, there doesn’t seem to be another simpler solution for now.

Update: A Facebook spokesperson says Facebook is still “working through the details” of the ad approval process:

“We’re in the process of working through the details, but we certainly want to establish high standards and maintain a good user experience as part of these new guidelines,” Facebook says. “We believe this is good for the entire ecosystem – the users, the developers and the advertisers. And as you know, we have a dedicated internal policy team who will continue to monitor ads and take action against those that violate policies, including disabling them.”