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

April 10, 2018 | By Jason Kint, CEO – DCN @jason_kint
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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.

Facebook Data Collection Chart
Facebook Instagram WhatsApp Data Collection and Merging Chart

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.

Facebook tracking on apps it doesn't own expectations chart
Facebook purchase of personal information from data companies chart

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

Facebook location data collection expectations chart
Facebook Like Button click tracking on outside pages expectations chart
Facebook Like Button non-click tracking on outside pages expectations chart

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?

Notes:

  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.

Reprinted with permission from Nieman Lab.

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