March 29, 2018

What the Facebook Data Breach Means for Brands

Likeable Team

The news that Cambridge Analytica illegally gained access to the private information of 50 million Facebook users, and used that data to support Trump’s election campaign, is still reverberating through the media and tech worlds. To combat all the negative press and consumer anger, Facebook is making some big changes to its platform. Below, we summarize what has happened so far along with initial thoughts about implications.

What actually happened with Cambridge Analytica?

The alleged violation is that Cambridge Analytica illegally purchased and then failed to delete data that was originally and legally obtained by a third party that mined friends of friends’ names, email addresses, and perhaps likes and other information through a quiz app that utilized the Facebook Login. This “friends of friends’ data” type is one that Facebook no longer allows apps to request or users to share. The policies that allowed this data to become accessible to a third party are now long corrected, but the fact that Facebook kept quiet about this discovery for two years is one of the key reasons for concern.

For brands, the data breach has no impact whatsoever on the safety of custom audiences that have been built off CRM list data, since all that data is hashed on a local computer prior to being uploaded to Facebook.

What have been the immediate impacts on Facebook?

  • An FTC investigation has been launched.
  • The stock price dropped 14% in the first week under expectations of potential fines due to Facebook’s handling of user data.
  • Consumers, some celebrities, and a few brands have joined a #DeleteFacebook movement. However, a recent survey by investment firm Raymond James revealed:

• 48% of those surveyed indicated they would not cut back on usage

• Only 8% said they would stop using the service

What is Facebook doing to respond to the breach?

  • Mark Zuckerberg issued an apology.
  • Facebook has updated its privacy controls to make it easier to delete data.
  • The new Access Your Information section will be “a secure way for people to access and manage their information, such as posts, reactions, comments, and things you’ve searched for. You can go here to delete anything from your timeline or profile that you no longer want on Facebook,” Erin Egan, VP and chief privacy officer for policy and deputy general counsel Ashlie Beringer wrote in a blog post Wednesday.
  • Additional changes that will be rolled out in the next few weeks including centralized controls for the settings menu on mobile devices, a new privacy shortcuts menu that makes it easier for users to review (and delete) data they’ve shared, and easier access to download all the information and data shared on Facebook.
  • In terms of ads, targeting has been affected by these two recent changes:

• Custom Audience Reach Estimates have been temporarily removed to allow Facebook to fix a technical issue that “could potentially allow misuse of the functionality.”

• The bigger change is that over the next six months, Facebook will remove the ability to use Partner Categories, a targeting solution that enables third-party data providers to offer their targeting directly on Facebook.

What are the biggest concerns for brands at the moment?

The most immediate concern is the pending removal of Partner Categories. The companies that provided this data, such as DataLogix, Acxiom, and Experian, enabled marketers to connect real-world behavior and information (e.g. income, purchase behavior, number of homes owned) to the data Facebook gathers natively. While generally more expensive and therefore a targeting capability Likeable has usually de-prioritized, Partner Categories are powerful targeting tools and essential to granular targeting and audience finding.

This new change will make Facebook targeting somewhat less powerful. However, the increased use of CRM lists to create custom audiences and the creation of Lookalikes off those lists as well as site traffic could easily combat deficiency.

Longer term, we may see a drop in media performance on the platform, whether from a reduced set of tools, a not-as-rich trove of consumer data, or both. However, Facebook is usually so much more efficient than the other social networks that it probably will still drive the best results.

In the meantime, however, it does make sense to expand a brand’s social portfolio if it is heavily focused on Facebook. Doing more on Instagram, which is the second biggest social network and has been almost immune to any backlash despite being owned by Facebook, is a good alternative. Then there is YouTube, which is the only platform that currently rivals Facebook in size and scope for video. The other major players (LinkedIn, Twitter, Pinterest, and Snapchat) are also potential opportunities, if more niche.

Overall, we recommend a cautious approach that keeps in mind that Facebook hasn’t lost its considerable edge in the world of social media—practically everyone you know is still on the platform and it’s really hard to get hundreds of friends to move together to another platform. Just ask Google Plus.

To learn more about how this change will impact your brand, please get in touch.

Tags: Facebook, Facebook Ads, Paid Media, Strategy

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