4.20.18

What Advertiser’s Need to Know About Facebook’s Data Controversy

Sean Winnett

Unless you’ve been living under a rock, you’ve probably heard about Facebook’s recent controversy surrounding their use (read: misuse) of users’ personal data. While the media has spent a lot of time covering the topic at hand, most haven’t approached this from the point of view of how this will affect advertisers and what they need to know to stay on top of the controversy.
Here are some of the questions advertisers should be asking during this time:

  • How does this ultimately impact how advertisers are using the platform?
  • How will audiences react to this news, and will this have an impact on the demographics that use Facebook?
  • Will this change how individuals use the Facebook platform, and will it impact the overall user population?
  • What changes need to be made to ongoing advertising efforts (if any)?
  • What changes is Facebook making to the ads manager and business manager?
  • What measures can advertisers put in place to ensure they are keeping the trust of their audiences?

Changes to how Facebook handles their platform as a whole aren’t anything new to those who have been using the platform for any length of time, whether that is on the advertiser side, business page side or even within individual user accounts. Facebook has been a constantly evolving entity since its inception; these concerns are likely to expedite an additional round of changes but ultimately shouldn’t change how the platform looks or feels to the end user.
The media team here at DaviesMoore is approaching this topic very conservatively at this time (but keeping a close eye on how the situation evolves), as there simply isn’t enough information yet to go out and make any widespread changes to how Facebook as a platform is used within the greater advertising mix. Here are some things to consider as you are evaluating your presence on Facebook, as well as some recommendations from our media team on how to approach the situation:

  1. Don’t make any rash decisions: Now is not the time to pull advertising dollars from Facebook. Over the past few years, we’ve seen prices increase as more advertisers flock to the platform. And while Facebook’s lack of transparency with the distribution of this data to 3rd party sources cannot be ignored (and should not be ignored), Facebook will remain one of the most effective ways to reach audiences on a widespread scale. The targeting may not be as granular (unless you’re utilizing 1st party data sources), but the audiences will still be there and are still active on the platform. Spoiler alert: even with this breach of trust, don’t expect Facebook to be going anywhere anytime soon.
  2. Monitor the situation closely: Ongoing monitoring of the situation is vital to fully understand this complicated narrative that is unfolding. Every day new information is coming out, and following Mark Zuckerberg’s testimony in front of Congress this past week, expect more to come as the story continues to break and evolve. Don’t expect any new federal regulations to be put in place that effects social media in the short term. While Facebook may be eventually hit with some form of penalty, their stock price saw a 4.5% increase after Zuckerberg’s testimony began on Tuesday morning, showing that investors still believe strongly in the platforms ability to reach audiences and turn a profit. (Source: CNN Money)*
  3. What to expect: Facebook will be making some big changes to the way that they use data for targeting of advertising, rolling out a number of changes as soon as July of this year. What does that mean to advertisers? The ability to segment audiences using the slew of 3rd party data that Facebook curated through multiple sources, integrations and 1st party data will be changing.
  4. Who will this affect most?: Those most likely to see the biggest changes on the platform will be small businesses and those running campaigns in-house. As regulations and the ways targeting is currently leveraged on the platform change, Facebook will require (in some form) new features that validate advertisers are using 1st party lists, which have been lawfully obtained through the proper opted-in avenues.
  5. What about Instagram?: Do these changes run across Instagram as well? Not as much one may think. There is still much to be uncovered in the wake of these events, however, that platform is likely to see less of an impact due to the inherent nature of the photo-sharing platform.

Some of the key ways that Facebook is addressing this problem include**:

  1. Turning off access for unused apps (those not used within the past 3 months).
  2. Restriction of login data that is used via Facebook login through 3rd party apps. This will now only include name, profile photo and e-mail address by default, and additional information will require approval from Facebook.
  3. Bringing light to the situation and encouraging individuals to familiarize themselves with the apps that they use, their settings that are in place and informing people about how data has been misused in the past.
  4. Rewarding those who find vulnerabilities through an expansion of their existing bug bounty program.
  5. Deactivation of third-party data segments in audience targeting. This includes data partners such as Oracle, Epsilon, and Acxion, and this information includes segments such as, “auto intenders”, and “homeowners”.

These are just some of the changes that Facebook will be making, and many other changes to the way that data is handled is likely to roll out over the next year. The conversation surrounding how data is used in digital marketing and advertising to target audiences is likely to only continue to evolve over the coming months. It is important to understand that while these changes will be having an impact on how advertising is targeted on Facebook, that the overall demographics of the users on the platform aren’t likely to change in any significant way.
While it is expected that the platform will continue to evolve further, a mass migration from Facebook isn’t something that is likely to happen in the foreseeable future. This means that Facebook (and other social platforms) are still a vital component of the digital advertising mix, even if targeting parameters aren’t as refined through 3rd party data sources. As with all marketing efforts, 1st party data continues to grow in importance and will be a differentiator for those businesses who are committed to cultivating this data and utilizing it to reach their customers in meaningful ways.
Stay tuned for further updates about this topic from our integrated media team as they arise.
 
* http://money.cnn.com/2018/04/12/investing/facebook-stock-mark-zuckerberg-congress/index.html
**Source: Centro POV