The world is reeling in shock as it transpired that Cambridge Analytica, seemingly worked the system with user data on Facebook and sold election success (amongst other things) to the highest bidder. As a result, Facebook has suffered a huge hit to it’s share price. The value of the company fell by a staggering $37bn in just a few hours, and the impact is now affecting Twitter’s share prices value too. It seems investors are running scared.
A campaign #DeleteFacebook is claiming that millions of users are unsubscribing and IBSA, a group of thousands of advertisers are threatening to pull adverts worth hundreds of millions of pounds from the platform. It’s not looking good for a company that was until the end of last year, the largest social media giant on planet earth.
Here’s a bit of background. An academic at Cambridge University by the name of Dr Michal Kosinski developed an app that enabled millions of Facebook profiles to be mined for data. The app collected data from Facebook users who took part in an online quiz.
You know when you are invited to: ‘Find out what kind of cheesecake you are’. The kind of click bait that you personally would NEVER click on.
The long and short of it is that by discovering what member of ‘80’s pop combo Five Star’ you are, the developers were busy mining your data, and the data of your friends, and relatives.
Now all parties have been summoned to explain to the authorities why they seemingly cheated the system. Dr Kosinski is blaming Cambridge Analytica and Facebook saying they told him it was all above board, as they were working with data they were given and within Facebook’s terms of service. Facebook are saying it’s not their fault, as Cambridge Analytica mined the data and said they had deleted it.
Facebook didn’t mine the data, because they already had the data, as the public gladly gave it to them. However, they are seemingly guilty of opening such vast data sets to anyone who wanted to develop an app for the platform.
Mark Zuckerberg has said, ‘It’s a major breach of trust’, but he is referring to the trust between Cambridge Analytica and Facebook, not Facebook and its users. He hasn’t directly apologised to his 2 billion strong community.
This isn’t news, the whole thing was admitted to in 2016 in this interview: https://www.contagious.com/blogs/news-and-views/interview-alexander-nix, and I was up to speed with the whole thing in January 2017 when I re-posted this: https://motherboard.vice.com/en_us/article/mg9vvn/how-our-likes-helped-trump-win
As a digital marketing adviser, I know how targeting works on social platforms and advise businesses on the need to stop broadcasting messages and instead narrow cast messages to their target audiences. This is based on more than just gender, age and ethnicity but on interests, political beliefs, brands etc. Facebook’s entire value was built on it’s ability to sell this ‘micro audience’ data to the highest bidder – which is what a pay-per-click advertising model is. It’s an auction for audiences.
This situation has bothered the public because audiences have been sold political ideologies using data that they offered up for something else, namely a fun quiz. We hate being sold politics, and we hate it when a side that we don’t support manages to sell our potential voters their message.
So, where does that leave Facebook?
It’s not been the best start to 2018 for them. Firstly, the algorithm change to the way it delivers content effectively forces businesses into a paid model for delivering content to audiences, and now this.
Where does it leave small and medium sized businesses, whom rely on using this data to communicate with customers the world over?
The answer is, only time will tell. I see the data mining app eco-system being effectively shut down. Mark Zuckerberg said he will audit all apps on the platform to see how widespread this practice is, probably more widespread than we think.
For now, for most of us it is business as normal. In fact, you may get a lower cost per click for a few months on the platform, but you will pay more on Google as big advertisers switch the budget there. Users will storm off in a huff, but in the absence of a credible alternative we will drift back, hopefully this time, more aware.
Does this leave opportunities for other platforms? Could we see a global rise of the WeChat platform? They have the resource to do it, and they know exactly how to create a platform that communities can fall in love with.