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April 10, 2018, 11:02 a.m.
Business Models

Jason Kint: Here are 5 ways Facebook violates consumer expectations to maximize its profits

The head of a digital publishers’ trade association argues that Facebook can’t rebuild trust while continuing data practices that track its users all across the Internet — and beyond.

As the Facebook scandal continues to snowball, COO Sheryl Sandberg and CEO Mark Zuckerberg have finally admitted publicly they have a lot of work to do to restore trust in, and combat abuse of, their platform. Those are facts supported by independent research from Edelman.

Trust is a result of delivering on expectations, whether the customer is another business or the public. Facebook and Google, more than any other two companies, have controlled and influenced the trust issues now being surfaced across our industry which impact the publishers and advertisers who choose to associate with their platforms.

In 2014, I wrote about Facebook’s questionable practices in The Wall Street Journal, focusing on Facebook’s mining of user’s browsing history. We argued that people do not expect Facebook to track them across the web and within apps in order to target advertising to them. Unfortunately, the backlash was slow to build (except for those most intimately involved in consumer privacy and regulation) and Facebook continued its practices. The 2016 election and the Cambridge Analytica scandal dramatically changed that.

Although Facebook recently added the ability for users to opt out (via a deeply buried setting) and announced new “controls” and “settings” are coming, the fact that it takes an avalanche of bad press and a #DeleteFacebook movement to motivate them to act in their consumers’ best interests clearly shows their products are designed to maximize profit rather than behave according to consumer expectations.

At Digital Content Next, we wanted to get a clearer picture of how consumer expectation does (or does not) align with Facebook’s data practices. So last week — at a time when consumer expectations of Facebook are likely at an all-time low — DCN surveyed a nationally representative sample to find out just exactly what people expect from Facebook.1 Here’s how they responded.

There were only two ways in which a majority of respondents felt that Facebook was acting according to their expectations.

Q: Do you expect Facebook to collect data about a person’s activities on Facebook?

Q: Again, thinking about Facebook and other applications it owns like Instagram and WhatsApp, do you expect Facebook to collect and merge data about a person’s Facebook activities with activities on its other applications?

There were five areas where respondents answered that Facebook was acting outside of their expectations. Importantly, these are the issues which drive down consumer trust, and they mostly involve activities where Facebook is taking data from publishers. These activities clearly show how Facebook’s financial gain comes at the expense of trust and profit for news and entertainment companies.

Q: Do you expect Facebook to track a person’s usage of apps that Facebook does not own in order to make ads more targeted?

Q: Do you expect Facebook to buy personal information from data companies and merge with a person’s online usage in order to make ads more targeted?

(Note: Facebook announced last week it would abandon this practice).

Q: Do you expect Facebook to collect data about a person’s location when a person is not using Facebook?

Q: Do you expect Facebook to collect data about a person’s online activities on a non-Facebook webpage if a person clicks the ‘Like’ button?

Q: Do you expect Facebook to collect data about a person’s online activities on a non-Facebook webpage if a person does NOT click the ‘Like’ button?

In summary, most users expect Facebook to be collecting some data about them in exchange for use of its “free service.” For example, most users probably assume that data is collected about things that they choose to “like,” or from information they enter directly into the Facebook app as part of using it.

However, when asked about some common Facebook tracking activities across the web on other properties, the survey results show that most people do not approve. These activities — and your data — have generated extraordinary wealth for Facebook and the limited number of executives who control the company. Your data is delivering more than $20 billion per year in profits at 50 percent margins.

Bottom line: Does Facebook have the ability and the desire to adjust its business model to better align with consumer expectations and attempt to rebuild trust?

Jason Kint is CEO of Digital Content Next, a trade organization representing major digital publishers.

Photo of Mark Zuckerberg at F8 2017 by Anthony Quintano used under a Creative Commons license.

  1. ORC International Online CARAVAN®, 1,000 Adults 18+, March 29–April 1, 2018. 85 percent of sample replied yes to having a Facebook account. []
POSTED     April 10, 2018, 11:02 a.m.
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