What is the danger in offering giveaways in exchange for links?

[esztanyo]

In this Whiteboard Friday video, Rand says there is a danger in offering products for blogs to give away, simply requesting a link to your product or website in exchange for the giveaway. Could someone elaborate on what the danger is?

Is this also the case with offering products for review?

[brandonjschwartz]

It can constitute a link scheme. When a search engine finds out, they could determine that the links you've received aren't legitimate and may subject you and the sites linking to you to a penalty.

It also technically counts as buying a link. You are essentially trading something that has value for a link to your site. Absent following one of these suggestions you run the risk of being flagged for buying links.

[giftbasket4kids]

This was my question yesterday and I got completely
different answer!!?? I wish we would get more response.  I understand both sides of arguments.

http://www.seomoz.org/q/is-it-a-good-idea-to-participate-in-review-giveaway-bloggers

[EGOL]

They get the giveaway and then remove the link!

[giftbasket4kids]

In my situation I am doing this for introducing my brand. I give them a product to review and I have a giveaway / prize every month. The link will always stay but may be to same or  different page of my site. I also want to do it for many sites.

I appreciate to hear from SEOmoz staff also

Thank you for your response

[RebekahMay]

The answer is - it is risky ground.  Some say it is good marketing, but there are examples of this backfiring - so the best advice is to be aware of the risks and tread lightly.  Technically when you really look at it - it is good marketing, but it is also an alternative to paying cash, and Google doesn't like this type of link building

Giveaways and even offering a discount in exchange for a link can land you in hot water.  Take the whole Overstock penalty for example, they were getting links on EDU sites by offering discounts to students and faculty.  Good marketing or shady link building? Debatable. Would they have gotten caught if they weren't such a big name? Who knows...

To be on the safe side, my recommendation is to host a giveaway, but make no mention of "linking back" to your site.  You can probably say "please share this contest with your friends and family" but "sharing" isn't necessarily asking for a link.  Any links obtained out of interest in the contest are earned through good marketing/content.

Edited to add:

You also have to consider FTC disclosures when giving away any product for a review.

Also, I can't find it right now, I will continue looking, but I think remember reading something from Matt stating that if you are giving away a product you have to ask them to no-follow any links.