Mr. Zuckerberg Goes to Washington

Facebook’s privacy issues have been in the news for weeks, and on April 10th, Mark Zuckerberg, founder of Facebook, will be called in front of two Senate panels to answer questions about Cambridge Analytica, covert political ads, and other security and privacy issues. While information and updates are changing hourly, here’s a quick overview on what’s happened so far …

Facebook's Data Breach is Uncovered

Cambridge Analytica’s data culling was a specular example of how an advertising tool can go terribly wrong. How did Cambridge Analytica get so much data? In 2014 this British political consulting firm asked Facebook users to take a personality survey and download an app. About 270,000 users took the survey. A programming loophole allowed Cambridge Analytica to also gather the same kind of information from the respondents’ Facebook “friends” at the same time, without the friends’ knowledge or permission. Facebook quietly stopped allowing data culling from friend accounts in 2015, having already identified the issue. But before Facebook closed this loophole, Cambridge Analytica had already harvested data from tens of millions of Facebook users in the U.S., U.K., Philippines, and Indonesia.

Although the programming fix was put in place almost three years ago, the recent discovery that these kinds of data leaks happened, combined with the fact that Facebook did not alert users at the time, has contributed to the scheduling of Senate hearings.

Confirmation of Russians Meddling in the U.S. Presidential Campaign

To make matters worse, Facebook has confirmed that accusations of Russian interference in the U.S. presidential election were real. In recent weeks, Facebook admitted they identified and closed down hundreds of Russian-owned accounts that ran political and candidate issue ads during the 2017 presidential election.

Russian accounts posted messages and ads for and against a variety of candidates and issues. See four examples below:

How is Facebook Addressing Issues?

In addition to shutting down accounts from Cambridge Analytica and identified Russian interlopers, Facebook has also announced greatly-enhanced restrictions.

1. Facebook Will no Longer use Third-Party Data

The biggest change Facebook has announced is that it will no longer offer advertising audience categories based on third-party data. While blending third-party and proprietary data is a common practice, Facebook’s efficiency in creating laser-sharp profiles has a creepiness factor that many people resent.

Third-party data currently fuels hundreds of Facebook's audience profiling categories. These changes dramatically alter target audience options for auto shopping, charitable donations, credit union membership, retail purchase behavior, travel activity, and more. Over the next six months, Facebook will stop using third-party data from data giants like Acxiom, Epsilon, Experian, Oracle Data Cloud (formerly DLX), TransUnion, and WPP. Many other countries already prohibit this kind of online profiling. Recent changes to the European Data Protection Regulations already mandate similar restrictions, making Facebook’s announcement less stunning to people already familiar with profiling issues.

2. Facebook Requires Transparency From Political and Issue Ads

Facebook has announced that all political and issue accounts will require clear identification of ownership and funding resources. Additionally, Facebook is requiring anyone running political or issue ads to verify their identity and location. These kinds of ads will also be put into a searchable database, which will be released in June. This database will include details on how much the ads cost, and what kinds of people the advertisers were targeting. Ads will stay in the database for four years.

How do These Changes Affect Facebook Advertisers?

For mainstream political organizations, it should be (almost) business as usual. For organizations promoting controversial issues or points of view, including Political Action Committees (PACs), the new rules may prove uncomfortable but won’t prohibit any new categories of advertising.

These new policies also raise questions about defining controversial issues or political issues. Will ads from religious groups be subject to the same regulations? Will fundraising for issues such as cancer research, UNICEF and Save the Children be exempt?

Under the new rules, accusations of prejudice or bias seem inevitable. Cup O Content predicts that to sidestep these sensitive issues, Facebook will apply these procedures and safeguards to all of their advertisers in the coming months.

The upside? The new transparency should help responsible advertisers to thrive, while severely limiting less respectable organizations, political and otherwise, who depend on the ability to hide behind false identities.

Will Fewer People use Facebook Because of Security Breaches?

The short answer is yes. Many people, already uncomfortable with online privacy practices, will leave Facebook behind. There will be losses for other social media tools as well. However, with over 214 million U.S. users (about two-thirds of the population,) Facebook can shrink considerably before losing advertising effectiveness.

Here’s the Good News for Advertisers

Cup O Content believes that increased online security and vigilance is a good thing for advertisers. Requiring identity verification and clear sponsorship has always worked in the favor of responsible advertisers. Misleading or sensational ads, like the examples shown in this article, decrease the credibility of all online advertising.

While companies like Cup O Content will have to lean in a bit more to create audiences that provide great ROI, irresponsible or malicious organizations will find it harder to litter the platform with harmful messages. And that's a good thing.

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Have questions? Want to know more about how these changes will impact your advertising program? Contact us today for more information.