The lesson of Facebook: the online business model must adapt

The lesson of Facebook: the online business model must adapt

Industry issues
4 minute read

This whole episode is going to precipitate more consumer calls for data transparency.

Article details

  • Will Gilroy

    Director of Policy and Communications
Opinions
29 March 2018

I changed my internet service provider this month. I unplugged the router, set box and cables and made my way down to the shop. Sitting in that drab customer service outlet with its pink bubble letters on a grey rainy Brussels morning, I suddenly thought of Mark Zuckerberg.

My immediate customer experience couldn't have been further removed from the bright shiny bustle of the Facebook offices I had visited just four days earlier to listen to senior Facebook executives explain the Cambridge Analytica debacle.

Perhaps my thoughts were prompted by watching the Facebook CEO on CNN, his first public appearance since the story broke. Perhaps my one hour wait had subconsciously prompted the same discomfort I had perceived on his face during that “breach of trust” interview.

But as I looked around at six customer service reps twiddling their thumbs, it demonstrated how quickly reputations can fall and business models become defunct if we do not constantly challenge ourselves to consistently make the consumer experience better.

As I stepped out into the drizzle, freed finally from a deeply unsatisfactory and significantly overpriced TV/internet bundle, I reminded myself of MySpace and thanked my lucky stars that I didn’t have to live with the constant pressures that Mr Zuckerberg has to on a daily basis.

WFA has seen no compelling evidence to suggest that people or brands will leave Facebook in significant numbers any time soon. The platform will continue to be a critical partner to brands and play a key role in the online marketing mix for the foreseeable future.

But it must have now dawned on the decision makers in Menlo Park, Silicon Valley (if perhaps not on the top brass at VOO HQ on Brussels’ Rue Champs Elysées) that customer expectations are changing very fast, especially when it comes to data.

This whole episode is going to precipitate more consumer calls for data transparency.

What happened back in 2013 was perfectly legal. Yes, Facebook have quite clearly stated publicly and in private that they could have and should have done more to prevent and then remedy the “leaks” and that mistakes were made.

But those 50 million users whose data was harvested – perhaps for political reasons, perhaps to sway election or referendum results and to such public outrage – gave their consent. No existing laws were broken even if Facebook’s policies were breached.

In an excellent article by Adam & Eve /DBB’s Alex Hesz, he points out that “Facebook’s interaction with the broader web and the wider world is the transfer of personal data out in exchange for revenue in. It’s not a bug, it’s not even just a feature, it’s the whole model.”

It’s just most people still don’t fully understand the concept of the free web: if you’re not paying for a product then you’re the product.

Thankfully, GDPR gives people in Europe at least some control back over their data. And that’s something we at WFA have welcomed as a big step forward.

But there’s inevitably a gap between what’s “by-the-letter compliant” and what’s going to be acceptable to society longer term. And this is the crux of the whole problem. On reflection, this is the source of both my discomfort and Mr Zuckerberg’s greatest pressure.

Alex Hesz continues: “For brands and marketers, our role is critical. We are at the coal face of the still-murky transaction on which the free web is built, the ones asking users for their data, as well as the ones relying on that data to serve precision-targeted ads.

“Our role as marketers can’t be ignored here, our responsibility can’t be shirked. GDPR will help, and the measures that Zuckerburg announced (chiefly adding a more visible dashboard to allow users to monitor where and to whom their data is available) are a step in the right direction.

“But, if we as advertisers are to continue using personal data as a way to inform precision marketing, whether pre-rolls, search, social or display, then it’s our responsibility to make sure we’re not wading into the ‘shady stuff happens here’ quagmire with our eyes shut.”


Brands, as ultimate funders of the online ecosystem, need to take the lead in delivering and demanding greater data transparency. That means making big demands on ourselves and on our digital supply chains and, critically, going the extra mile to explain the value exchange to consumers in a way that they truly understand what’s going on and willingly participate.

It’s the only sustainable way to avoid this kind of public outrage occurring on a regular basis.

WFA is talking to some of the world’s biggest brands about how we can make this vision a reality. Together, we must move the industry on from a ‘data-first to a ‘people-first’ mind-set.

Listening to Facebook describe how they are getting ready for GDPR, I couldn’t help but think that some lessons at least had been learned. Was this a timely reminder that from those wind swept, drizzled Brussels streets that a shiny new vision for data transparency and control is likely to reverberate the world over?

I’d like to think so.

Article details

  • Will Gilroy

    Director of Policy and Communications
Opinions
29 March 2018

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