Have We All Contributed to the Facebook Data Privacy Mess?

04/06/2018

In light of the recent data privacy issues at Facebook, marketers need to examine their role, response and contributions to the problem.

 

This week’s news about Facebook and their issues related to consumer privacy are disturbing, but not really surprising. And, there is a high probability that the 87 million affected user count will skyrocket as the company continues to investigate the impact of data scraping by malicious actors. Again- disturbing, but not surprising. The fact of the matter is that consumers have shared an enormous amount of highly personal information in their social media activities, and Facebook- and many other companies- haven’t done a very good job of protecting this information. In Facebook’s case, it has actively monetized this consumer data in the form of highly targeted ads to the tune of billions of dollars in highly profitable ad revenue. Given that this is a very successful business model for social media apps, and consumers in the US don’t seem to care, if we were to ask the Magic 8-ball what the likelihood of significant change will be, it would probably respond with “My sources say no”. The question for our marketing community is: where do we go from here and are we contributing to the problem?

 

The conundrum of the Facebook mess is that these highly targeted ads work- and in many cases, work really well. OptiMine, across its broad base of clients, regularly measures the effectiveness of Facebook campaigns and generally- although not uniformly- sees that they work well and perform favorably compared to other marketing channels. Some of our clients, when OptiMine accounts for the total contribution of a Facebook ad across online and offline channels (e-commerce plus in-store retail sales for example), see that these efforts are even comparable to the economics of paid search. Before the Cambridge Analytica debacle, Facebook was even seeing increasing ad rates, reflecting more marketer demand for their ad inventory. The question behind this conundrum is whether marketers will choose other forms of digital marketing to cleanse their conscience of the consumer privacy conflict, but the choices and alternatives aren’t much better. And if the economics of ad performance continue to be favorable, would we really expect marketers to change their strategies?

This leads to the question of our role as marketers in this entire scheme. Marketers have been relentless in their pursuit of consumer profiles, individualized personalization and targeting, and the ability to deliver more relevant messages across devices to drive consumer activation and sales. And this pursuit has spawned an entire industry around consumer tracking and measurement with the assumption being that if a brand can track an individual consumer across all their devices, they will “know” the value of their advertising investment. As an aside, it turns out that this assumption is deeply flawed, and the measurements themselves highly vulnerable to significant inaccuracies. Nonetheless, we can see how we got into this mess and why it shouldn’t be surprising to anyone in the marketing industry. This insatiable marketer demand for consumer data combined with platforms like Facebook that deliver on the promise of consumer targeting created the perfect storm- or minimally the conditions that led to the consumer data breaches we see now.

In Europe, new regulations in the form of the comprehensive GDPR data privacy act, are aimed squarely at protecting consumer privacy in the digital age. OptiMine complies with the GDPR provisions by default because we do not use personally identifiable information (“PII”) nor consumer identity and device data to measure the impacts of marketing campaigns. OptiMine provides marketers in Europe- and anywhere else- a safe choice in terms of marketing attribution without risk of any consumer data privacy issues. Will we see similar legislation in the US? Probably not without massive consumer backlash in response to the steady drip, drip, drip of consumer data compromises, breaches and theft.  Will marketers change their approaches? Hard to say- but the economics as they are- the Magic 8-ball’s response would be “Don’t count on it”.