What Does the Facebook Scandal Mean for Digital Marketing?

Stuart Elmes

The Scandal

On March 17th of this year, the New York Times and other outlets reported that Facebook had leaked the personal data of 50 million users to third-party developer Cambridge Analytica. The data was collected by a professor who disguised an app seeking user data as an academic exercise, and the information collected under false pretences was sold to, among others, Donald Trump’s campaign team and the Brexit campaign.

Following the release of the story, Facebook was met with a massive wave of public outrage, Mark Zuckerberg famously appeared before the U.S. Senate and went on a public apology tour, the #deleteFacebook hashtag began trending, and millions around the world began to rethink their relationship with social media, many for the first time. 

In the wake of this massive scandal, it’s time to think about what the Facebook controversy means to the future of digital marketing.

 

Facebook Isn’t Going Away

We can rest assured that the scandal has severely damaged Facebook’s reputation. In a recent survey, “some 56 percent of Americans said they trusted Facebook least with their personal information out of all major tech companies, according to a joint SurveyMonkey/Recode poll. Respondents were asked to choose among Amazon, Apple, Facebook, Google, Lyft, Microsoft, Netflix, Tesla, Twitter, Snap and Uber. Twenty percent selected none of the above.” If you google the company, you’ll find that all the news about the social media giant is focused on ethics and trust. A million outlets have asked if users will trust Facebook’s new dating app, while others wonder if the company’s death spiral has begun.

In spite of the tsunami of negative press, Facebook continues to rake in money. A Guardian story indicates that as social media adspend overtakes TV, Facebook will collect 84% of the £3.3 billion spent on social media advertising in the UK this year. Because Facebook has over 2 billion active users per month and dwarfs its rivals like Snapchat and Twitter in terms of audience, advertisers feel that they can’t afford to abandon the platform. There is simply no other medium that will allow an advertiser targeted access to such a massive number of consumers. While Youtube’s controversy of last year led giant corporations such as P&G, AT&T, Pepsi and Johnson & Johnson to pull their advertising, thus far Facebook has lost only Pep Boys and Mozilla. It remains to be seen if Facebook is too big to fail, but cracks are clearly starting to show.

 

The Pitchforks Are Out

One of the main areas of concern for marketers is the future of personalized, precision marketing campaigns. Leveraging social media data to ensure that your ads are seen by people who are already motivated to buy your products has been a great success. But the strategy is currently under threat from all sides. Consumers have suddenly become much more aware of online privacy, and more motivated to protect their personal information from rapacious companies. If your marketing strategy is based around data that isn’t obtained ethically, this could severely affect your brand’s reputation and damage consumer trust. Furthermore, as a result of the public outrage, regulators on both sides of the Atlantic are exploring their options and calling Mr. Zuckerberg onto the carpet to explain how his companies protect user information. As Digiday has noted, “regulation has never looked more likely for Facebook and its peers… [f]or an online ecosystem founded on companies like Facebook selling user data to advertisers, regulation could have big ramifications.”

 

Protect Your Customers

Brands need to be proactive to develop digital marketing strategies that are effective and appealing to consumers. Getting your hand caught in the data cookie jar could result in significant damage to consumer trust and public opinion. As one agency executive remarked to Digiday, the “cost of advertising on the two biggest and most effective sites in the world is you need to be prepared to monitor them, and you need a policy in place about how you work with them. Establishing a data strategy that acquires and processes personal data the right way just shot to the top of marketers’ to-do lists.” The onus is on brands to hold Facebook’s feet to the fire, and ensure that they are handling your advertising in a way that doesn’t offend and disturb your customers.

How you feel about the future of Facebook ads probably depends on how you feel about internet privacy in general. For people who have never really considered these issues, the idea that Facebook was selling their personal information to a third party who was actively working for the wildly controversial Donald Trump was outrageous. But are people actually deeply concerned about internet privacy, or are the spotlights and outrage exponentially larger because of the connection with The Donald? Brad Jakeman, former President of PepsiCo’s global beverage group recently told AdAge “A lot of what’s going on now has to do with the moment in time we’re at, where brands and consumers are learning a lot more about how the internet and how advertising on the internet works. It feels like every month brings with it a new tranche of issues … Unfortunately, I think this is the time in which we live and the complexity of a world where we’re publishing data. I think it is terrific that these issues are being surfaced.”

The same article notes that Jakeman says “he wishes there wasn’t such a huge rush to blame Facebook, suggesting that industry players should put collective energy into making sure consumer privacy is better protected.”

Looking at the current landscape, it seems unlikely that advertisers will abandon Facebook anytime soon. Its reach is too vast, and there is a pervasive sense that Facebook is taking the heat for the social media industry as a whole. It is clear, however, that both consumers and regulators are poised to have much more say in the way that data is collected, used and shared. Smart brands will explore the most ethical ways to use customer data and build consumer trust, and ensure that the platforms they invest in won’t damage their reputations. The reverberations from the Cambridge Analytica scandal are still being felt, and we at Adimo are committed to ensuring that our partners are protected from any of the fallout.