Facebook Transparency

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Facebook has suffered a number of self-inflicted wounds over the past year.  So much so that my students joke that they must have a calendar full of bad decisions and we’re just waiting to see which one they decide to roll out each month.  Impressively, Facebook recently announced that as of the end of February, users will be able to see how their information is used for ad targeting.  They are referring to the update as Custom Audience Transparency.  Once launched, users will be able to click on the top right corner of a Facebook ad and see which business uploaded that user’s information and highlight audience sharing that might have taken place.  This article from Wired covers the new update in detail.  According to Facebook, this update should help improve transparency for themselves and their advertisers.

What do your students think?  In my experience, students are relatively unconcerned about privacy and marketing students understand it is being used to help target ads that might be more relevant to their audience.  However, targeting was also used to help influence voters in advance of multiple US elections.  Is that still okay?  What about business implications?  How will Facebook’s financials be affected by the change?

He Knows if You’ve Been Naughty or Nice

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Welcome back, I hope everyone had a restful and relaxing holiday with friends and family!  When I saw this Marketoonist cartoon I thought it was very topical for the start of a new semester.  Marketing should be all about informing and enabling consumers but there’s always the risk (and temptation) to push ethical boundaries.  As we welcome a new batch of students, talk with them about where those boundaries lie.  Is it intrusive if consumers give permission to track information?  What if they didn’t opt-in but instead you utilize an opt-out strategy?  Are we doing a disservice to customers if we don’t utilize available tools and technology to optimize our messages?

Survey Overload

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Tom Fishburn recently ran this Marketoonist comic which hits close to home, particularly during holiday season.  We teach students the importance of making market-based decisions and getting direct consumer feedback is an important part of that process.  However, companies now inundate consumers with surveys.  The volume of surveys increases which leads to surveys being ignored which only leads to reminder messages and more aggressive survey tactics.

Marketing week ran a recent article by Tom Goodwin talking about this issue.  In the article, he talks about this dynamic and suggests the issue is rooted in a desire to gather easy to measure KPIs rather than really digging in to understand customer needs.  Electronic addiction is making it easier for marketers to gather information on consumers but we don’t always know how to properly interpret that information.  Marketing data analytics is an emerging need for companies to learn what information is worth gathering, how to interpret that information, and how to use that knowledge to drive strategy.

Facebook Loses Face

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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?

Improved ad targeting at the expense of privacy

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Advertising continues to shift away from traditional media and more to digital media.  In particular, mobile advertising is the hot platform these days due to it’s ability to not just target customers with a specific profile but also take advantage of location information.  The customization and filtering enabled by digital advertising is helping marketers be more effective and more efficient with their promotional strategies.  A restaurant no longer needs to offer a generic promotion to all customers, they can push a coupon for the item most frequently ordered by each specific individual.

However, according to this article from Wired.com, researchers at the University of Washington have found that this deep degree of ad personalization may carry a price consumers aren’t aware of.  The researchers found that for just $1000 anyone can track a target’s location, learn what applications they have on their phone, routes they take to/from school or work, etc. with significant accuracy.  The article goes on to say that consumers are generally unconcerned about individual companies having location information and other limited data because they trust those institutions, their motivations, or the legal system to protect them from abuses.  However, this shows that any individual can exploit information shared across multiple apps and websites to spy on a specific individual.

The trend toward personalized, location-based advertising is likely to continue.  Do companies have any ethical issues to consider?  Should companies that conduct this level of advertising be required to educate consumers more on the consequences of opting-in to these services?