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Facebook Loses Face

March 28, 2018 by Jon Firooz Leave a Comment

It was recently discovered that back in 2015 Facebook allowed 3rd party Cambridge Analytica to access private data from over 50 million Facebook users without consent from those users.  Cambridge Analytica used that data to build psychographic profiles and use those profiles for targeted political campaigns.  Facebook actually discovered the issue in 2015 and told the offending parties they needed to certify that they deleted the data but they didn’t verify that deletion and they never notified users.  Now it looks like that data was not deleted and has continued to be used for political purposes by Cambridge Analytica.  You can read more about the incident in this article.

Facebook has received a fair amount of negative publicity recently that continues to erode their brand and the trust their customers have in them.  Ask your students how Facebook should respond.  Ask if they think the negative publicity will actually have a material impact on the number of facebook users or ad sponsors.  If students say it won’t have a material impact, ask whether Facebook should do anything about it or not if that’s the case.  This can lead to a rich discussion that covers business ethics, opportunities for competitors to differentiate, opportunities for startups, and more.  What role should the government play, if any, when it comes to regulating use of consumer information for marketing or other purposes?

Filed Under: Chapter 08, Chapter 19 Tagged With: brand rejection, ethics, Facebook, Privacy, social media

Negative Brand Association

February 28, 2018 by Jon Firooz Leave a Comment

Brands partner with other brands all the time for various reasons.  One motivator is to help improve your brand preference.  By associating with another brand that your customers view positively, you hope customers will, over time, associate the two brands together and thereby provide a halo benefit.  One example would be the NFL’s partnership with the Susan G Komen foundation.  Another motivator for partnership can be customer acquisition.  An example here would be AARP’s partnership with Consumer Cellular.  This partnership provides AARP with a selling point to prospective customers (join and gain access to these discounts) and it provides Consumer Cellular with a customer acquisition channel.

However, in all partnerships you need to be cognizant of the risk to your brand if your partner’s brand becomes tarnished in any way.  Recently that became an issue for a number of businesses that had a partnership/association with the National Rifle Association.  Companies like Bass Pro Shops, United Airlines, Delta, Cabelas, Hertz, and others have/had some form of partnership with the NRA that weren’t heavily marketed but the brand association was there.  Following the school shooting that took place at the Marjory Stoneman Douglas High School in Florida, students and other activists brought visibility to those relationships.  Facing public scrutiny, some of those partners have chosen to end their association with the NRA while others have reaffirmed their support.  This article from Inc. talks about some of the companies that have severed ties and this article from Newsweek talks about those that have chosen to stand by the partnership.

While this particular topic may be politically charged, you can hold a discussion on the concept of partnerships and the risks and rewards of brand association.  How should companies make decisions about choosing the appropriate partner and how should they evaluate that relationship when the brand status of one partner changes?  How do corporate values factor into that decision?

 

Filed Under: Chapter 02, Chapter 08 Tagged With: brand rejection, partnership, sponsorship

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