It’s been a turbulent couple of months in the social media world and for users of Facebook, there’s been plenty not to like. The scandal-hit social media giant is still battling the fallout after it emerged Facebook data misappropriated by firm Cambridge Analytica was used in a series of targeted political and election campaigns. The scandal has brought about widespread criticism and global calls for the wider regulation of social media.
Facebook's datasets allowed advertisers and agencies to use the social media platform for campaign targeting, while companies such as Experian and Acxiom supplemented existing data for ad targeting, including transactions occurring outside Facebook’s platform.
Since the controversy broke, Facebook has cut third-party data providers out of its ad targeting extension by shutting down its Partner Categories, including the likes of Experian and Acxiom. Amid an online campaign to #DeleteFacebook, founder Mark Zuckerberg announced a series of extra steps to firefight discontent, including an investigation into all apps with access to user data, a ban for developers that misused personal information and a promise to tell users about any data misuse, cut access to apps unused for three months and reward those who report data abuses. But it remains to be seen whether these changes will be enough to reassure angry consumers.
Even now, although there has been a campaign to boycott Facebook, people are still happily using Instagram and WhatsApp, which are part of the same company.
“Since the 1970s, politicians have used focus groups to help sharpen their political messaging,” says Jerry Clode, head of digital insight at Resonance China. “Of course politicians are going to use all the information they can get together for their messaging, so what’s the difference between running a focus group and collecting data? The difference is that people who take part in a focus group are fully aware of their rights around privacy and their identity.
“The sharing of this data with Cambridge Analytica is not actually anything unusual, but it was used maliciously for a political purpose, and it has taken the elections to magnify it and make it a more contentious issue.”
But as the fall-out from this scandal continues, Facebook - and all other social media platforms - have been staring at a looming wall of regulation which could impact on data collection and messaging by brands, marketers and advertising agencies.
“Historically, technology companies have not put enough effort into data security, privacy, or these related issues,” says JWT head of digital Riku Vassinen. “Naturally, consumers have not really cared. Even now, although there has been a campaign to boycott Facebook, people are still happily using Instagram and WhatsApp, which are part of the same company.
“So I think this current drama has been pulled a little bit out of proportion but the discussion has been right, and we need to think about this area and make sure these guard rails are in place.”
“Most marketers struggle with having a clean set of first party data - good data even for their own customers,” adds Darren Woolley, founder and CEO of TrinityP3. “What they should be focusing on now is how to build a relationship with existing customers, and build a relationship where you deliver value for them out of that data.”
Seismic changes to the way data is protected and handled in Europe will come into effect in May, in the form of the General Data Protection Regulation (GDPR) legislation. The new EU rules will strengthen and unify data protection for all individuals within the EU, and will also apply to global companies that deal with EU data. The GDPR law was already in place before the recent controversies, and will make practices used in the Cambridge Analytica scandal - such as harvesting third-party data of friends of respondents on Facebook without their knowledge – illegal.
“If you’re going to have to comply with the EU, you’re going to have to comply with everyone basically, because it’s going to be very hard to have one process of compliance just with EU people and another set of compliance for non-EU people,” says Woolly. “We’ve already got something pending in the GDPR that’s going to fundamentally change the way advertising and marketing go about collecting and using data of individuals.”
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It’s too early to measure the impact of GDPR, but in the wake of the Cambridge Analytica affair countries such as the US have already been looking at fining Facebook and implementing their own regulations over social media platforms.
In Southeast Asia, Facebook is also fighting to save its credibility as countries moot strict new regulations. Indonesia's Ministry of Communications and Information Technology has said it will investigate and consider blocking Facebook over possible violations of Indonesian privacy law, while in Myanmar Facebook has found itself in controversial waters over claims it is being used to spread hate speech and fuel conflict. The platform has also been linked with election fixing in the Philippines, which saw the most Facebook user data go to Cambridge Analytica outside the US.
In Singapore, government inquiries were held in March to consider how to block fake news and regulate major mobile and social media platforms, including potentially introducing a state-run “fact checking" body.
The future of data ownership
While governments argue about regulation, experts in the industry say this is a time for reckoning in the marketing industry, and a chance to ensure all data practices are above board.
“If you’re a marketer, the most valuable data for you is your own first party data, the data you have about your own consumers and customers,” says Vassinen. "I think many companies now are more cautious about how to use that data, and the most important question for our industry to be asking is about data security and quality - where did you get the data, who are your data partners, are they reputable, will you expose that data to any risk?"
With a shifting attitude to regulation and privacy, industry veterans predict that individual consumers will also become increasingly aware of the power and value of their own data. A mass exodus of users from Facebook would severely damage its usefulness for advertisers and the ability to create effective targeting campaigns.
“Eventually, your individual data will be worth something and you will be in control of it, and you will be able to give companies, brands, publishers or Facebook permission to access a part of that data,” says Woolley. “But you’ll want something in return for it - either financial returns or some sort of benefit.
“Your data won’t just be something that’s scattered around the internet to be collected by other people and commercialised, its something that you will own and you will have control of, and you will be able to commercialise.”
Experts say the concept of paying consumers to view relevant adverts could become a reality in the next few years, as the trend moves towards targeted, valuable data. This means shifts in the marketing world’s attitudes to data won’t be necessarily driven by regulations, but demand driven, and in response to changing consumers.
The Asia v. Europe response
The threat of regulation has taken a different approach in Asia, where attitudes to privacy and media can be markedly different to Europe. Concerns have been centred largely around fake news rather than data privacy, while several proposed new privacy bills have raised alarms over increased state control over free speech.
“The discussion here in Asia has been only about fake news, and hasn't been about the right for you as an individual to know what data is collected and how you can move it,” says Vassinen. “We live in really interesting times right now, because the debate is starting to divide - Europe is taking the lead in how people and individuals will know about their data and utilise it, but I don't really see that discussion happening in Asia at all.”
This is particularly true in Asia’s largest market, China, where the Facebook scandal and privacy debate has had very little impact.
“I think from a China perspective this is going to have very little effect - the key media networks are effectively cut off from the rest of the world,” says Clode. “The starting point for China is fundamentally different to mature markets - the ability of brands or services to access your data is always understood as positive, because Chinese citizens have a different way of framing up privacy and the sharing of data with other parties is seen as something fundamentally positive that will help to enrich the consumer’s life. I don’t believe that the likes of Tencent, Alibaba, JD or Baidu care, and they don’t need to, because there isn’t any core sensitivity about that issue.”
“Awareness of digital privacy and security issues in China is woefully inadequate,” agrees Jeremy Webb, vice president at Ogilvy China. “Chinese consumers need to start waking up to this. Anything like this coming from the Cambridge Analytica scandal would be a good thing in my opinion.”
For global advertisers and marketers, Facebook looks set to remain a platform with unparalleled reach and targeting capabilities. To equip themselves for any emerging regulatory changes, brands and agencies should focus on taking better control of their own first-party data, and build customer relationships based on trust and transparency.
“I think there will be a response from brands but it will be from a corporate responsibility perspective,” concludes Clode. “Companies and brands will take more time to talk about how they use data, and say upfront that they will collect the following data and use it to create a better brand experience.
“I believe that brands will institute better data systems, and they’ll be looking at it from the lens of this recent controversy; it may lead to them being more transparent about the data they collect.”