How Does The Cambridge Analytica-Facebook Scandal Affect Us As Marketers?

Had you heard the term, ‘Cambridge Analytica’ a month ago you may have assumed it was a brainy university competition where the brightest minds battle it out in maths, or science. Hear it today and you should be more aware of its consequences. We take a look at what exactly happened, Facebook’s role, how this affects us as marketers and what the influence of GDPR will be in cases of future indiscretions.

What Did Cambridge Analytica Do?

Through the Facebook personality app ‘thisisyourdigitallife’, 50 million user profiles were leaked to Cambridge Analytica by university professor and app creator, Dr Aleksandr Kogan. They then used this data to target US and UK voters with advertising supposedly persuading them to choose Trump in the 2016 presidential election, and vote ‘Leave’ in the Brexit vote. As only 270,000 took the test, the app also gained access to users’ friends’ profiles and the pages they had liked (a function Facebook allows), building up a pool of psychological profiles and determining the best way to influence them in their favour.

What’s concerning is that a prior data leak occurred in 2015, with Facebook removing the app and demanding all data be destroyed. Clearly, this didn’t happen.

How Could This Have Worked?

Using the personality model, OCEAN (openness, conscientiousness, extroversion agreeableness and neuroticism) they sent people advertising that matched the emotional and intellectual appeals that link to their personality style. For example, agreeableness centres on whether you put others needs above your own. Targeted advertising that claimed leaving the EU would create more jobs, safety and lead to a more independent country could have really hit home with voters unaware of the downsides of leaving the other countries behind.

What Was The Fallout?

Unsurprisingly, Facebook banned Cambridge Analytica (as well as parent company Strategic Communication Laboratories) from its website, and has opened an investigation into both. A good step, considering its stock value has dropped by 13% (US$75 billion) and big companies, such as Mozilla are halting their promotion through the platform. The public are also reconsidering their social media allegiances, with the trending ‘#DeleteFacebook’ circulating throughout the web, backed by WhatsApp co-founder Brian Acton.

Further, Mark Zuckerberg has been summoned by the House of Commons’ Digital, Culture, Media and Sport Committee to appear before their Fake News inquiry and give evidence concerning how Facebook uses personal data.

What Has Facebook Promised To Do To Make Amends?

In a statement released on March 21st, Mark claimed Facebook would:

• Investigate all apps that had access to large amounts of information before they changed their platform to reduce data access in 2014, as well as conduct a full audit of any app with suspicious activity.
• Ban any developer that ”misused personally identifiable information” and ensure users are aware of those apps.
• Further restrict developers’ data access, and actually remove it if you haven’t used their app in 3 months.
• If developers require access to private data, they’ll need user approval and a signed contract.
• Add a tool to the top of our News Feeds allowing us to block apps’ abilities to view our data.

They have also hired the investigation firm, Stroz Friedberg to audit Cambridge Analytica.

How Does the Cambridge Analytica-Facebook Scandal Affect Marketers?

By effecting consumer trust. If companies as large as Facebook can’t control for such data breaches, then who’s to say smaller companies can? Think of it this way. Whenever a celebrity falls from grace, they tend to lose brand deals so that consumers no longer associate them with their negative behaviour. It’s no surprise then that advertisers and companies alike are pulling back on Facebook-ad spend and looking for more trusted alternatives. But therein lies the catch-22. Pulling away from Facebook, with its millions of users could lead to a great loss of reach and engagement, and ultimately business.

So, what should marketers do? Vaughan Chandler, executive manager at Red Planet puts it best:

“As an industry, data-led marketers and brands need to be transparent to make sure consumers are aware about how their data is being used. Having that awareness will help them better understand the benefit of how behavioural data is being used, which is to deliver experiences and interactions that are more relevant to them.” (speaking to CMO).

Also, ensuring you know what your clients, data centres and buyers are doing with the information you provide them with isn’t a bad idea either.

”…it’s critical that you can govern the flows of data in and out of your organisation, that you can track where and how shared data is used both now and in the future, that you can revoke access when you need to, and that you can ensure that nothing dodgy or ethically unsound like this can happen.” (Paul McCarney, CEO, Data Republic).

What About GDPR?

Had this scandal happened after May 25th, Facebook’s fall-out could have been a hell of a lot worse. This is when the General Data Protection Regulation (GDPR) comes into effect, improving the way companies store personal data, handle security breaches and make it easier for users to be ‘forgotten’. Should they not comply – for example, by not obtaining consent, encrypting data and testing security systems – and a data breach occurs, then fines range from €10-20 million or 2-4% of annual turnover.

As of October 25th, Facebook has been fined £500,000 by the Information Commissioner’s Office (ICO) – the UK’s data protection watchdog.

According to Marketing Week:

”While the fine itself will have little impact on Facebook’s revenues, which totalled $40.7bn (£31.5bn) in 2017, it has already seen impacts to its brand and business. User numbers in Europe dropped for the first time in nine years in the second quarter, while a survey of 1,000 consumers conducted for Marketing Week by Toluna found that the breach had prompted 34.4% of those questioned to update their privacy settings and 7.7% to delete their account.”