Between “fake news” concerns, ongoing privacy issues, and Russian meddling, Facebook has been taking heat the last few years, and now Facebook is in the midst of its largest crisis to date: The Facebook-Cambridge Analytica Privacy Scandal. The latest privacy breach has left people feeling violated and unsure on whether to continue supporting Facebook. As for advertisers, their current relationship with Facebook is thorny.
The fiasco in brief:
In mid-March, it was revealed that a third-party app had improperly harvested data from Facebook and sold a vast amount of users’ data to Cambridge Analytica, a London-based data-mining company that uses data to change audience behavior. Users gave permission to the app to use their data, but the app also accessed data from these users’ Facebook friends, allowing for as many as 87 million people to be impacted by the security breach.
This scandal has sparked privacy debates around the world, bringing them to Washington D.C. as Facebook CEO Mark Zuckerberg faced congress last week. As of now, Facebook has responded by beginning an investigation into third-party apps and adjusting its privacy settings to make them more transparent for users.
How Facebook advertising is being affected:
Advertising is the lifeline of all social media platforms. By providing brands with precise targeting strategies, Facebook has become the second biggest seller of digital advertising, behind Google, resulting in $40 billion annual revenue. However, in the wake of the security breach, those who advertise on Facebook are raising concerns while also receiving backlash.
Facebook has cancelled the use of third-party data for targeting ads, which gave companies the ability to specifically target their consumers. Some companies are concerned that as Facebook continues to modify data-collecting regulations, spending their advertising dollars on Facebook may not be as effective as it was before. Many brands may look toward using Google ads, but with the crackdown on privacy issues, Google may start to revise its policies as well.
Companies are also questioning Facebook about what data they share during advertising campaigns and the legal and reputation risks they may face if they continue to advertise on Facebook. Many companies have already received backlash from Facebook users who are demanding to know why their data is being saved. Some companies such as Commerzbank, Mozilla, and Sono have even suspended their advertisements on Facebook until there is more clarification on these issues.
Although this scandal has sparked major debate throughout the globe, there are no clear signs that advertising agencies will completely sever their ties with Facebook, or that, because of this, Facebook will demise. It is expected that once Facebook creates a more transparent data-collection strategy, both users and advertisers will continue to prosper on Facebook.