Facebook might have escaped the Cambridge Analytica scandal with its profits – if not its reputation – intact but for most brands the issue has been a massive wake-up call, forcing them to reappraise their data strategies to avoid the kind of backlash that – it seems – only Facebook can survive.
One year on from arguably one of the biggest data protection bombshells of recent times, and Facebook continues to grow, with revenues up 38% year-over-year and monthly active users up 9% to 2.32 billion.
According to Socialbakers chief executive Yuval Ben-Itzhak the case was a tipping point in online privacy for both consumers and social networks but he adds: “Despite the voices demanding users abandon social networks or stop using them, a year later, we have learned that consumers aren’t willing to alter their social media habits or change platforms.”
However, there have been wider repercussions, according to customer engagement, insight and data strategy consultant Janet Snedden, who insists the row has forced many clients to reduce their reliance on third party platforms and data, and refocus the spotlight on the value of first party data.
She adds: “With reputation damage avoidance now a board-level concern, clients have tightened up on data project governance and have become much more risk savvy. Proper budgets have finally been allocated.
“This has been a force for good, driving data strategies to incorporate a stronger ethical dimension, increasing the emphasis on value creation for the customer as well as the organisation. From a data science perspective in today’s digitally hyperconnected world, just because you can, doesn’t mean that you should.”
And MyLife Digital co-founder and chief innovation officer Jason Cromack agrees: “The issue has had an impact on how organisations view data misuse, and we have certainly seen organisations realise they must be transparent with consumers with regard to why they need to process consumers’ personal data (the purpose).
“In the build-up to GDPR you had a lot of IT firms flogging cyber security software, and it was all about preventing and preparing for a data breach. Whilst some people may consider the Cambridge Analytica scandal as a data breach, it wasn’t. The data was knowingly harvested from Facebook users (and, it turns out they knew about it a lot sooner than they would have had us believe) and used for a purpose they wouldn’t expect.
“This is a fundamental breach of GDPR due to lack of transparency and doesn’t meet the right to be informed requirement, and that’s before you get into the consent versus legitimate interest debate.”
But do consumers now think twice about sharing their data? According to a recent survey by Boston Consulting Group only between 14% and 25% of consumers actively trust companies to do the right thing with their personal data and Cromack reckons there has been a change in attitudes.
He adds: “Consumers are now starting to ask questions and as more press coverage continues to highlight the challenge, I really do believe businesses can put in measures to become trusted data stewards as a differentiator and actually grow their databases with more informed and insightful data points.”
Meanwhile Snedden believes there are many differences in data savviness and concern across consumer groups. Some will continue to check the tick box without reading privacy policies to receive services offered with minimal effort whilst others may be more guarded.
She adds: “Research findings regularly underline that the group most concerned about the use – and potential abuse – of their personal data are the more affluent in our society, the ones with the most to lose financially.”
Of course, Facebook has also been attempting to allay concerns over its privacy policies, although Mark Zuckerberg’s recent “privacy-focused vision for social networking” – in which he revealed plans to make the social network more private – has hardly been a resounding success.
Damian Collins, who chairs the House of Commons Digital, Culture, Media & Sport select committee, branded Zuckerberg’s plans an “excuse to dodge responsibility”. He said: “Rather than a manifesto for privacy, his statement could easily become an excuse for Facebook to dodge responsibility for acting against harmful content and the accounts that promote it. This is not something we would want to allow to happen.”
Cromack comments: “When reading the text in detail you must conclude that the vision is restricted to the messaging services of Facebook (WhatsApp, Messenger, and Direct from Instagram) and has nothing to do with the social platform itself. The belief among the privacy community is it offers precious little evidence that Zuckerberg has embraced privacy at all.”
Snedden adds: “With the genie being let out of the bottle that Facebook’s business model relies upon monetising user data, consumers are cynical about the reactive PR initiatives in play and it will take a lot to regain universal trust.”
Whether this will ultimately lead to a decline in Facebook users is another matter, as Socialbakers’ Ben-Itzhak concludes: “Facebook isn’t just a social media platform, it’s a habit – and its user base is not going to give this habit up anytime soon.”
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