Analytics

Cambridge Analytica: What it means for Facebook advertisers

by Karen Amundson | April 3, 2018

Cambridge Analytica: What it means for Facebook advertisers

 
 
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The press has been covering the developing story of consulting firm, Cambridge Analytica using the Facebook data of 50 million users to build psychographic profiles and target potential voters with content aimed at influencing elections. In this episode, we speak with Apiary Founder and CEO Karen Amundson, and Apiary lead analytics consultant Rachel Factor to discuss how this news relates to, and impacts brand advertising on platforms. We discuss how Cambridge Analytica gained access to data, and how users are responding. Looking at the long-term effects of this flashpoint in digital advertising, we discuss the reactions of users and the call for data transparency. Listen in to learn how marketers can work with brands and platforms to emphasize data transparency and user privacy while still driving business goals.

Full transcript (from transcription service)

Tess Barry
00:00:01 – 00:00:42
Welcome to the hive is a life from a very digital I’m. Your host test very on this episode will be discussing the recent news about Cambridge, analytica and Facebook. Advertisers need to know. As people have seen, a company called Cambridge analytica accessed information of over fifty million Americans from Facebook. This data is then utilized by Cambridge analytica to build psychographic profiles of users and then target users with messaging with the goal of influencing elections. We discuss how this data was collected and utilized, how consumers are reacting to this news and most relevant to this podcast. What this means for advertisers? How can we, as digital marketers, think about data and privacy moving forward.

Karen Amundson
00:00:44 – 00:01:02
Hello today we are joined by a berry, founder Karen Emmons in hello, Karen, hi Hey. And we are also joined by a theory, lead analytics, consultant, Rachel factor, hello. Welcome so to get started, could you each tell us a bit more about what exactly.

Tess Barry
00:01:02 – 00:02:33
It happened and how this happened. I can start with that. So the story goes that a man named Alexander Kogan, wrote an act for Facebook, and this app was in the form of a quiz and when users start this quiz think something like that. You know which sex and the city character are you on things that are really seemingly innocuous? They they go and they start the quiz and then they’re asked to consent to some permissions and then the app goes in and can scrape data from your profile scrape data from your friend’s profile and it turns out it can actually scraped call data call metadata as well, and then this guy Alexander Kogan and he ended up selling the data to Cambridge analytica, which was in violation of Facebook’s policies So that’s really the big issue that is broadcast. However, Facebook has come out to say that this was not a data breach. It’s something that the news is kind of falling over themselves. Talking about how you know, Facebook was hacked they weren’t hacks. This was using Facebook’s tools, developer tools, as they were intended, and so that’s kind of what is so scary about this. Is that pretty much anybody at the time could go write an app scraped data from Facebook, sell it off without much interruption from Facebook’s policies or anyone really and Facebook has since updated their their policies around. You know what apps can collect from profiles, but.

Karen Amundson
00:02:34 – 00:02:40
The damage has been done. A lot of apps have been doing this supposedly, and this is just one case where, where they got caught.

Tess Barry
00:02:41 – 00:03:32
And then I think you know kind of where I think we’re starting to think about. This is, of course I as individuals and consumers. We want to know how our our our data is being used. It’s you know, certainly a hot topic but then we also as a client focused organization, running digital media, and you know helping clients to spend money on Facebook. We also want to be looking out for the interests of our clients, which both is How do we drive revenue for them improve performance and then also? How do we help them to look out for their customers and help to steer them in a direction to where you know? We don’t want to be helping them to spend money on things that maybe aren’t in line with the values of their company, what they wanna do with their customers, and so I think you know one of the one of interesting questions that we’re trying to work out is does this change anything from an advertiser’s standpoint.

Tess Barry
00:03:33 – 00:05:32
In the context of you know what, where is kind Facebook going from here and I I? Don’t think it’s going anywhere by the way I, don’t know about inventory or how that’s gonna work, but I do know that, like they still have the strongest, it is set in the world and you do hear about people I’m saying what you know: delete Facebook I’m gonna get off Facebook and then go to work. You know Instagram, not even realizing that it’s owned by the same parent company and so the the breadth of information that Facebook has, because it has so many properties as well as something that is quite powerful. They can re brand themselves, even if this is kind of you know an embarrassing moment for them through one of their other very popular social media sites. I just saw a graph recently. That said, you know, whats app is probably one of the most used social media platforms. I. Guess it’s more of a messaging app, but still so Facebook is capturing all those techs interactions and collecting that data collecting your call data when you when you have what’s app on your phone so you know I, don’t think they’re going anywhere! I! Think they’re going to have more opportunities for for advertising. Did the analogy I’m seeing here with Facebook It reminds me of McDonald’s and McDonald’s obey and like does McDonalds make people fat or did people’s choices make them fat, and from here I am seeing it like. Well, is Facebook preying on people is it? Is this set up so that Facebook and to take your data, they’re, making you in secure or are people making choices that makes their data and security should give their data when I actually think that it’s probably a combination of both where Facebook does allow this to happen. They have very lax policies on how data is collected, and who gets to see it. But at the same time everyone I’ve ever met had no problem. You know just putting their name their place of birth and where they live and where they work, and all of their interests and all their friends.

Tess Barry
00:05:32 – 00:05:37
And just in a normal set of information about them personally for free.

Tess Barry
00:05:38 – 00:07:27
I’m not knowing that you know they were very much the product being sold rather than being given something for free, so I see a real issue with You know Facebook as a fixing this, but there’s some personal responsibility around how to protect your data, not that anybody is teaching anyone. This is not something learned: schools most of our parents. You know they don’t grow up in the digital age. They’re not savvy. In this regard, and so there’s no one to teach anyone this unless you’re going out to get information yourself and I, really think that we should be putting more pressure on companies like Facebook to teach people. This I mean you know, I feel a little bit better about if the next time I log someone logged on to Facebook they weren’t allowed to continue with their experience until they completed a video about data security and the kind of information that they should be. Sharing on the web and what Facebook actually does with the information that they give them you know to me that’s kind of the ethically right thing to do, but I don’t think that’s going to happen anytime soon, I think another thing: what like the textbooks will tell you about the McDonald’s business model is they’re not really in the business of hamburgers are actually in the business of real estate and hamburgers are just kind of a means to an end in the real estate business I. Don’t know if that’s still true today, but I think you know. Certainly that’s like what what you would see in a textbook and I. Think Facebook is the same like the business model as a means to You know it’s quite it’s like it’s an act. Business and and the underlying back on about is data and and I think, as we have more emerging technologies like AI, driven firms and the data to fuel, those is going to become increasingly valuable and I. Think if you like reading some of that, you know headlines. I’ve seen quotes like I’m data is the new oil. You know it’s and and what that means is.

Tess Barry
00:07:27 – 00:08:12
I’m the people who control the pipelines are going to be the ones that get wealthy. I’m, not necessarily the people with the the oil so to speak for themselves, but you know the ones controlling the flow back, so Facebook business model overall she’s well placed for that interesting. You both touched on it a bit. How there’s the hashtag delete Facebook and there’s a lot of public attention and a bit of outrage over the data collection what’s been happening, so you both mentioned that you don’t see Facebook going away anytime soon. But how do you see people changing their behavior In relation to technology, brands and privacy, I think we talked a bit about what we would like to see, but.

Karen Amundson
00:08:12 – 00:08:29
Is there something that’s happening now are like? What’s the next year, gonna look like I think this is gonna blow over in a matter of months, and it’s going to be very rarely mentioned in mainstream news yeah. Even currently, already it went from being the number one has time to like the number five headline.

Karen Amundson
00:08:30 – 00:09:40
So I don’t think that it’s going to have like a huge impact right now and I think like in terms of advertisers. You know you have and if course you have groups like ISPA, which represents the top several thousand digital advertisers in the world and they are calling for changes at center. But if you look back on what happened with, are you to brand protection last year where advertisers found out their ads were being put on? You know people don’t like ISIS videos and at center and there was a huge outcry. You took took some action. You know Google took some action to block that and then you know there were a few advertisers that sort of took their money off of YouTube for a short time and then there’s been some changes, but otherwise the spend is still there. So I also think from advertisers I. Don’t really think this is going to have a big impact. I do think what one change, though, that bridge okay, already touched on, is more of a move to Instagram and again, like I think this is actually really great friends. Facebook business in a way because it is kind of give up in inflection points to grow that Instagram business because the average user isn’t even aware that it’s the exact same.

Karen Amundson
00:09:41 – 00:10:11
Opening and it’s the exact same ad platform, it’s the same kind of data policies and user protection but already we’re seeing you know like fewer millennials using or you know any of this, like maybe even older I would say. Maybe the iPhone generation sort of I’m, not on Facebook as much or if they’re, on it they’re they’re out. It’s not really used as their primary platform. So you know that’s a really lucrative audience for a lot of advertisers they’re moving over to Instagram, more and more. Opens up opportunity for growth there.

Tess Barry
00:10:13 – 00:10:17
Interesting, so what I’m hearing from you guys is that.

Tess Barry
00:10:17 – 00:11:38
Facebook isn’t going away anytime soon, advertisers don’t need to start. You know pulling their money out of Facebook right now, but there is a bit of a greater public awareness of and concern of data privacy. So in this changing climate of users and how they think about technology platforms, how can we as marketers balance the responsibility of user privacy and consent while continuing to commit to client success in reach users through these technology platforms? You know I guess I I, I I want to have like a more solid answer. I think that the industry as a whole isn’t mature enough to really have some of the answers to these questions. but I think the point and like part of why I am excited to reduce cost, is to be opening up the questions in the first place because I think for a very long time, advertising on the internet. It gives people these things that they want and I’m gonna be able to monetize the internet, which is really an unofficial park for everybody, and so it’s like yeah, because there’s this benefit it I think it has like shut down conversation and questioning and thinking on. Well, maybe what if there is any way that we can help businesses to drive to nominal return on their investment.

Tess Barry
00:11:39 – 00:12:09
And to give users more visibility and control over what their data is being shared in how it’s being used and I I feel really good that we’re opening up conversations about these things I feel nervous about the implications of like how will be perceived by clients listening, but I hope that the interpretation of the that were really trying to. A. for their interests in a way that helps to position them in favorable light to their customers.

Karen Amundson
00:12:10 – 00:13:05
Well, we’re in a unique position as the spenders of the money to be demanding some of these things, as well as making these recommendations to clients, I, don’t think I, don’t know the single client that I work with that wants to invade anyone’s privacy or wants to violate you know, anybody’s trust, so you know I think if we kind of lay out possibilities of how they can still earn money but allow people to give them data. Can you know in a consenting manner and dizzy absolutely consenting matter? Here’s another analogy for you: that’s a very like sex, positive. Then the sex, positive community- that’s a thing where you say: I, don’t want you just consenting I want you to do the optically consenting, because it’s going to be better for you, you’re going to get better search results. You can get better products that you’re more interested, we’re not going to waste your time with things that you’re not interested in and so we have to convince the user that that that is something that they want. and it’s it’s on us as marketers. Should be doing that.

Tess Barry
00:13:06 – 00:14:06
So I got one like one thing coming out of this whole thing, which actually is really positive for Facebook’s business. Is that in the long running thing thanks, the C. P. C. U. th for access gonna go up because you have a few things happening like you’re. Gonna, have some users may not a lot and there’s like a hashtag, delete, Facebook movement and then maybe you’ll? Have you know, people who are fed up could just use that for a little bit less and they need to get rid of all these sort of bank accounts and then you have your users and what that means is less inventory for ads. And if you were, if the demand for advertising remains relatively study, that means the cost is going to actually go out, so the cost per click is going to go on, which is good for Facebook at their main revenue stream and so I. Think that, and you know like we already have all those factors coming and then you add in not having the fake accounts and maybe some users leaving the platform. You’re I. Think overall, we’re gonna see a reduction in inventory, which is kind of right. It increased the cost.

Tess Barry
00:14:07 – 00:14:57
I, don’t know I think to like We are very much and I I’ve heard a few people use that word attention, economy and I. Think that really resonates with me. That was not as much about time getting people’s time or their idols or their ears. It’s about getting our attention, and so, if there is, you were ad placements, the ones remaining are going to get more attention and be and be higher value. So I mean I’m still reluctant to talk about things like that on a podcast from a digital marketing company. But I still like the idea of what it’s like, what’s wrong, with asking questions that we know what’s wrong with imagining another world and then whatever that paradigm is at the end of the day, it’s about. How do we then strategize and help our clients get to the customers that really want and need their services? And it’s like a scary question to pose, but and.

Tess Barry
00:14:58 – 00:15:06
It is interesting to think about, and you know we shouldn’t just assume that it’s negative for brands and advertisers. If that were to happen.

Tess Barry
00:15:09 – 00:15:45
Okay, so just taking a step back to look for what we talked about over this episode, what I’m hearing is that. Platforms, favored seamlessness in use for customers, that’s what they prioritized and now with this news, people are starting to speak up that they are concerned about transparency with data, and, although this isn’t hasn’t been happening before, we as marketers are in a unique position of leverage to push these platforms for a balance of seamlessness and transparency for customers.

Rachel Factor
00:15:47 – 00:16:07
Yeah I think that’s said that that’s about right, I think we do have a duty to protect the privacy of users to. To be sure that we’re not taking too much but it we are often dis, incentivized, to be doing that. It’s really easy to take a step too far, so we have to keep ourselves in check.

Karen Amundson
00:16:09 – 00:16:32
Thank you for joining us. Please feel free to follow up with thoughts or questions by emailing us at podcast, if you’re a digital dot com following today’s digital and subscribe to our show. The hives allies produced by a very digital media, collective editing, help from Holly hill to. Reduced by Miguel Bravo test in can am, and. And we will see you around the water cooler.