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Ad.ly Versus Facebook: Something Doesn't Add Up

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Earlier this week we heard whispers that Facebook was clamping down on Ad.ly and Crowdrally — two services that let users post sponsored updates to their Facebook Pages. This is important, because the companies are monetizing Facebook Page feeds, which is something that Facebook presumably would prefer to do itself.

Inquiries to speak to both companies went unanswered.

Then, this morning, Ad.ly posted an update to its blog stating that it has “complied with Facebook’s request to no longer offer celebrity endorsements on Facebook.” A report on MediaMemo expanded on the news, and we’ve spoken to both Facebook and Ad.ly founder Sean Rad to get to the bottom of what’s going on. The only problem: both sides are directly contradicting each other.

In a statement, Facebook says that Ad.ly has repeatedly violated its Terms of Service, and that the company has been “told many times” to stop:

We feel that it is important to take action when we see repeated violations of our Terms and activity that is misleading to our users and partners. Adl.ly was told many times that their activity with personal profiles was not allowed. They nevertheless attempted to circumvent the rules and were caught. We’ve officially told them to stop, they say they have, and we consider the matter resolved.

But what exactly were Ad.ly’s “repeated violations”?

Ad.ly founder Sean Rad admits that the company created a single fake user profile — which is against Facebook’s Terms of Service. But the reason why they created it sounds benign. Rad says that the service regularly posts updates to its celebrity clients’ Facebook Pages, but that because of the way its system works, it sometimes runs into trouble with Facebook’s API, and they’re forced to ask their celebrity clients to re-authenticate with the application. Rad says they’ve spoken with Facebook’s engineering team about getting a fix implemented.

In the mean time, Ad.ly came up with a solution. Instead of dealing with the app, celebrities can opt to bless Ad.ly’s ‘fake’ user profile as one of their Facebook Page’s administrators, which means the celebrity doesn’t have to worry about it any more. Rad says that the company created this fake account because he didn’t want to have personal accounts of employees associated with these celebrity Pages. This fake account isn’t actually posting updates to users, it’s just managing the client Pages. In theory, Ad.ly could just avoid this violation entirely by simply doing the same thing with a ‘real’ user’s profile.

And, Rad says, “The fact that [Facebook] say they told us repeatedly about this is completely untrue. The only time they said anything about our personal profile was when they sent us the Cease and Desist. Every comment they’ve had before the C&D was positive… all of our interactions were positive and often supportive.”

I asked Facebook repeatedly if they could specify any of Ad.ly’s other infringements, but they declined to comment further.

Either Ad.ly is being misleading and actually has committed further offenses, or Facebook has honed in on a minor policy violation and is using it as grounds to boot a service that could compete directly with its own monetization efforts. Unless Facebook comes back with something else I’m inclined to believe it’s the latter — especially since we’ve confirmed that Crowdrally, which offered a similar service as Ad.ly, was also issued a Cease and Desist.

At this point it looks like Facebook is fine with celebrities using their Facebook Pages to post promoted updates. Just don’t make a service that helps them do it. That’s apparently Facebook’s turf.