Marketing Implications from Facebook and Cambridge Analytica Data Scandals

Facebook and cambridge analytica

Background: Facebook and Cambridge Analytica

In a full-page advertisement taken out in several British and American newspapers on Sunday, Facebook and its founder, Mark Zuckerberg, attempted to apologize for an infringement of its users’ trust over data that the company has allowed third-parties to collect. The advertisement’s headline reads, “We have a responsibility to protect your information. If we can’t, we don’t deserve it.”

Prompted by a recent scandal involving data and analytics firm Cambridge Analytica, the ad is meant to serve as a formal apology. Formatted as a letter to the social network’s users, Zuckerberg addresses past shortcomings regarding data privacy and reiterates promises to prevent similar data security issues in the future. The letter also restates the company’s intent to investigate all applications that had access to large amounts of user data before internal policies were changed in 2014.

Although Facebook permits the collection of data, the social network explicitly prohibits the sale or transfer of data “to any ad network, data broker or other advertising or monetization related service.” The use of Facebook user data to influence the 2016 presidential election, which should have been prohibited by the social network, has prompted several investigations into data protection practices and policies.

Cambridge Analytica Scandal Timeline: What You Need to Know

Below is a timeline outlining the collection and use of Facebook data by Cambridge Analytica with additional details on all parties involved:

  • Cambridge Analytica, founded in 2013, is a subsidiary of SCL Group, a British research and communication company
  • Between 2013 and 2014, Russian-American psychology professor, Aleksandr Kogan, built an app and personality survey to scrape Facebook user data
  • Around 270,000 users consented to share personal data with the application built by Kogan
    • The application also captured the data of users’ Facebook friends, totaling 50 million raw profiles, which were given to Cambridge Analytica
  • In 2015, Facebook was alerted to activity between Kogan and Cambridge Analytica, prompting the social network to ban the app from its platform
  • In 2016, Cambridge Analytica was hired by the Trump Presidential Campaign team to identify the personalities of American voters with the intent of influencing their behavior
  • In a series of undercover videos captured by Channel 4 News and released on March 20, 2018, Cambridge Analytica leaders claimed to have been integral in coordinating the Trump campaign
    • Cambridge Analytica has since suspended its chief executive officer, Alexander Nix, pending further investigation
  • In a public post shared on March 21, 2018, Facebook’s Mark Zuckerberg acknowledged the situation and promised to take further action beyond the steps taken to reduce data access in 2014
  • Facebook has also hired a forensic data firm to investigate and verify whether Cambridge Analytica deleted the data collected by Kogan
  • Additional actions that Facebook claims to be taking include:
    • The company will investigate all applications that had access to significant amounts of user data prior to 2014
    • The company will further restrict developers’ access to data, limiting the information provided to name, profile picture, and email address
    • The company will work to increase transparency regarding which apps users have allowed to access their data
  • On Sunday, March 25, full-page advertisements appeared in several major newspapers, serving as an official apology from Zuckerberg and Facebook

What Marketers Should Know About Cambridge Analytica and Facebook Data Scandal

Marketers should anticipate greater scrutiny from governmental and consumer protection agencies over the types of data being collected and used in advertising. Beyond Facebook, questions of data accessibility and use may be directed at other tech giants that dominate the digital advertising industry, including Amazon and Google.

Increased scrutiny following the Cambridge Analytica scandal has already resulted in rapid changes being made to Facebook’s advertising platform. After being alerted to a potential exploit that would allow advertisers to calculate personally identifiable information (PII) from custom audience lists uploaded to the platform, the social network has removed reach estimates for audiences built using email lists. Brands that regularly utilize custom audience lists to target customers or lookalike consumers will no longer be able to view potential reach to help with campaign estimation.

Marketers should also prepare for an increase in transparency between advertising networks, advertisers, and consumers. Investigation into the Facebook and Cambridge Analytica scandal will likely result in digital platform users being able to view what data about them is being collected, by whom, and for what purpose. Although greater transparency may negatively impact consumer perceptions of the platforms they use, the openness will enable them to better manage their personal data. And although restricting the types of data available to advertisers may make marketing over digital channels more difficult, increased transparency will benefit the industry.

Finally, despite a drop in the company’s stock price and some online backlash, including the hashtag campaigns #DeleteFacebook and #DeleteFacebookNow, the social network will likely retain most of its active users. Although some data-conscious individuals may elect to permanently delete their social profiles, the internet is an essential part of modern life and it offers advertisers nearly limitless opportunities to reach consumers.

IMAGE SOURCE: Facebook

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