Should you invest in contests on Facebook now that Facebook allows you to run competitions directly on your newsfeed?

Does this Facebook change spell trouble for Facebook competition vendors?

In this article we take a detailed look at the future of Facebook competition apps.

What changes did Facebook make?

For many years companies have been running competitions on their Facebook pages despite Facebook not allowing it.  Facebook insisted that you run competitions through a 3rd party app.  Within this app you had to clearly state that Facebook had nothing got to do with the competition.

Facebook changed the rules last week.

You can now run a competition on your Facebook page and users can enter by liking, commenting or sending a message to a page.  Likes can now also be used as voting mechanism.

This is a reminder to all Facebook app providers that it is extremely risky relying totally on Facebook who can make whatever changes they like.  Luckily this change is not going to be drastic to most Facebook competition app providers but it could have been.

Imagine if Facebook decided that there were no more Facebook apps on a Facebook page anymore.  It is unlikely to happen but Facebook wouldn’t be too concerned about upsetting app developers if it meant they could generate more revenue.

Facebook needs to generate more revenue to keep that stock price going up.  Expect many more changes to the platform as a result of this.

Who provides competition apps?

The following shows some of the vendors that have invested in this space.  Some only provide competition apps and other provide a suite of applications (not all competitions).

This is not a comprehensive list, there are many more providers.

If you add up the vendors above and all the other vendors in this space there are too many.

A lot of vendors provide a monthly subscription model.  This is known in the industry as SaaS (Sofware as a service).  Because of the low monthly subscription typically a vendor needs to raise finance to survive until profitability.   Investors are already nervous investing in Facebook app developers and this recent change will mean they will be more nervous!

Note: Read this article if you want to understand more about technology risks for social media tool providers.

What’s going to happen these vendors?

There are already too many vendors in this space and the ones that will suffer revenue wise from the Facebook changes are the ones that focus on basic competitions targeted at small businesses.  Increasingly businesses will run these competitions themselves.

There is still, however, a requirement for apps with more comprehensive functionality and particularly for vendors that provide an approach based around ongoing campaigns rather than once off competitions.

Why did Facebook make these changes?

Most small businesses find it difficult setting up apps.  By making these changes Facebook will encourage a lot more small businesses to run competitions.  This will lead to more interaction on their page which means more advertising revenue to Facebook.

This will also lead to more ‘promoted posts’ where page owners will promote their competition post through an ad.  This will lead to more advertising revenue.

Why would you still use apps for a competition?

There is certainly still a requirement to use competition applications.  You may not use apps for all competitions and if you’re a small business you may never use an app.  But there are still a lot of benefits to using apps.

Here are some reasons why Facebook competition apps are still useful:

• Building email subscribers – It’s very useful to build email subscribers as part of a competition and apps provide a facility to do this.  In the example below the app used is Rafflecopter.  You get more than one entry to the competition if you subscribe to a mailing list.  This is a great way to build email subscribers that you couldn’t do from a competition run directly on your page.

• Moderation – You may want some control over what gets entered into the competition.  You generally have more moderation control using an app.
• Profile information – When you run a competition you should build up profile information on your fans so you know more about them, what they like, don’t like etc.  This profile information could be built up over time with several competitions.  Here is an example of part of a profile of a user built up by Agorapulse.

• Professionalism – The app providers provide the ability to upload nice images, logo’s etc that will make your competition look a lot more professional.
• Promote directly to the app – Within Facebook you could promote your competition on your brand page by using a promoted post but with an app you can direct people from Twitter, your website and other places directly to the competition tab on your page.  So you have more options for promoting without it costing you anything.
• Better options for voting – If you run a best picture competition on your brand page it will get very messy and hard to manage the entries.  Having voting through an app will work much better.
• Broad range of apps – There are just some competitions that you have to run as app because you require specific functionality.

Can you use apps in conjunction with a competition on your Facebook brand page?

Even if you do run your competition on your brand page you can still use some competition apps in conjunction with this.  You may need to assistance to pick out a winning entry.  Here are 2 examples of apps that support this.

Agorapulse Topfan

Agorapulse provides an application called Topfan which monitors interaction from fans on your page.

You just add the app to your page and Agorapulse will calculate a score for each fan that posts or interacts with posts.

On your Facebook page you can then view the score of your fans based on their interaction.

You can now actively promote this on your Facebook page.  For example, let your fans know that you have a VIP club and the people that interact the most on your Facebook page join the VIP club.  As part of the club you get special treatment!

The free version of this app provides a ranking of your fans based on activity over the last 30 days.  If you want to rank and reward fans weekly you’ll need the paid version.

Woobox Pick a Winner

Woobox have a very simple app for picking a winner from people that comment or like a post.   Install Woobox and select the ‘posts’ option.

If you run a competition on a page based on the most likes/comments you select the appropriate post within Woobox:

You are then given the option to pick a random winner.  The winner could be based on users liking a post or commenting on a post.

It’s a very simple app but if you do want to do randomly pick a winner this could be useful.

Where do vendors go from here?

There’s no reason to stop in your tracks unless your offering is in direct competition for the type of competitions that can be run through your page and you are specifically targeting the smaller business.

Summary

This change will have little impact to most competition app developers.  In some cases they will see an increase in business as more people will run or want to run competitions.

But with a total reliance on Facebook making the right decisions it’s always going to be a risky place to be.  What’s the next big change that will effect this area?

What is your opinion?  I’d love to hear your thoughts.