Why the Cambridge Analytica Scandal should not Deter you from Advertising on Facebook

By Emma Ballard, Digital Account Manager

The scandal surrounding Cambridge Analytica should not deter brands from advertising on Facebook. That’s not to say that Facebook isn’t in trouble—because it is. The company is currently being investigated by the Federal Trade Commission and the Facebook’s stock value has taken a hit. However, from the consumer and marketer side the impact of the fallout is limited.

If the Facebook/Cambridge Analytica scandal is deterring you from advertising on Facebook, considering the backlash Facebook and Mark Zuckerberg are receiving in the media, from U.S. congress and the stock market, these concerns may not be warranted.

What it boils down to is this: in March 2018, it came to light that Cambridge Analytica (CA) – a political data and consulting firm hired by President Trump’s election campaign – had gained access to data on 50 million Facebook users to identify the personalities of American voters and influence their behavior. This data was collected by Dr. Kogan, a researcher at Cambridge University, and transferred to CA. The scandal revolves around three issues: the data collection was disguised as being for academic purposes, Dr. Kogan only had the consent of 270,000 users out of 50 million, and he transferred the data to CA (which is directly prohibited by Facebook’s policies). To be clear, this was not a security breach or a hack, it was a collection, and use of data by a third-party in a way that contravened Facebook’s policies.

Any concerns about advertisements on Facebook potentially damaging a brand’s reputation seem to be unwarranted. That’s not to say that Facebook isn’t in trouble—because it is. The company is currently being investigated by the Federal Trade Commission and Facebook’s stock value has taken a hit. However, from the consumer and marketer side, the fallout is limited—especially when you compare it to the fallout YouTube experienced when it was discovered that they were serving ads alongside offensive content. Consumers clamoring to #DeleteFacebook on social media networks, have since petered out, and the big brands who spend millions on Facebook’s advertising platforms don’t seem inclined to stop.

The areas in which the CA scandal will affect advertisers has more to do with the data that advertisers now have access to use to target consumers in Facebook. In general, Facebook is going to be much more careful and strict about data brokerage, and the practices around transferring to, and using data from, third-party sources.

Facebook announced that it will be shutting down Partner Categories, a feature that allows certain marketers (depending on their location) to target ads on the company’s network of platforms by using third-party data provided by data brokers. These companies (like Acxion, Oracle Data Cloud and Epsilon) buy and sell data to help advertisers get a holistic picture of users online and offline behavior, by bringing together disparate sources of consumer data. As an example, it allows advertisers to target baby food ads on Facebook to an individual who purchased a baby stroller on their department store rewards card. This is the kind of targeting that will be phased out in the next six months. Facebook will still allow user targeting, but advertisers will only be able to use their own data, such as e-mail lists, and the data Facebook collects on their users.

It should be noted that this kind of targeting is only available to advertisers within the United States, Brazil, France, Germany, the United Kingdom, Australia and Japan. For Canadian advertisers, nothing will change.

Aside from bringing to light the fact that most users don’t know what is happening with their personal data, this scandal won’t be fundamentally changing Facebook’s advertising platform. True, advertisers in the affected countries listed above will lose out on certain targeting capabilities offered by the Partner Solutions, but it is likely that Facebook will find a way to mine their own data more effectively, or find new ways of allowing businesses to leverage their own data to continue to develop the kind of micro targeting it is known for.

2018-05-16T19:57:38+00:00