“If data is a weapon, Facebook is the biggest arms dealer in the world”. When I heard this analogy from Molly Wood, the host of Marketplace Tech, I stopped the campaign strategy I was formulating for clients.

Some years ago, oil was the driving force behind the global economy. Today, digital data is the new black gold – the most valuable commodity on the planet. That’s why global mega-corporations like Facebook, Google, Microsoft, Apple and Amazon have now secured their places among the top ten most valuable brands in the world. They all have one thing in common – we are their flagship product.

We live in a surveillance economy in which brands of all types and sizes rely on our personal data for the purposes of targeted, personalized advertising. That’s not to say there’s necessarily anything wrong with that either. After all, marketing can either be ethical or unethical, and it’s your job as a brand to build strong relationships with your customers that are based on transparency and respect for privacy. However, as the Facebook-Cambridge Analytica scandal so perfectly illustrated, is that personal data can and will end up being misused.

For seasoned marketers, last month’s scandalous revelations probably didn’t come as much of a surprise. In many respects, the aforementioned companies share many of  the same business models, and that’s all about using data for targeted advertising. The Cambridge Analytica scandal revealed in March is a bit different, however. It all started back in 2014, when the political consulting firm started collecting data from a few hundred thousand Facebook users who had given their consent. However, the app used to collect the data found a way around this limitation by taking advantage of Facebook’s design (which as most of us know, is sorely lacking with regards to privacy). It collected personally identifiable information from almost 90-million accounts. As if that wasn’t enough, the data was then used to manipulate the public with potentially profound political consequences.

What Is Facebook Doing About It?

Following several days of silence, which only aggravated people more, Facebook director Mark Zuckerberg came out with a monumental understatement describing the scandal as an ‘issue’, ‘mistake’ and a ‘breach of trust’. However, as share values dropped and the public demanded answers, Facebook quickly started taking action by limiting the data available from various features including the Pages, Groups and Events APIs. They also closed down part of their Instagram API and have prevented people from searching for users by email or username. Facebook has stated that it will continue to improve its security and privacy features by developing a new API for accessing its various features. Furthermore, the company will have to become fully compliant with the GDPR legislation, which will come into force on May 25.

What Are the Consequences for Brands?

As any business leader knows, modern marketing is all about data. Ever since online marketing became a big thing, an entire technology industry has grown up around it, in which every online activity provides data-driven insights for targeted advertising. There are now countless platforms for collecting, interpreting and visualizing data to help companies provide more personalized and targeted experiences. One of the most immediate consequences of the Cambridge Analytica scandal is that there will be a lot less data available to marketers directly targeting Facebook and Instagram users. This is largely because Facebook will be limiting the information available to advertisers coming from third-parties. Given that there are 2.2 billion Facebook users and 800 million Instagram users, this shouldn’t greatly reduce the effectiveness of your social media campaigns, although some targeted ads on Facebook will become less targeted.

Per Facebook’s announcement back in March, the scandal has had a knock-on effect on paid advertising campaigns, as third-party data providers can no longer offer their targeting directly, thus significantly reducing your targeting opportunities. Although things are likely to recover once Facebook has had enough time to develop more effective and transparent security and privacy controls, you will need to rethink your marketing strategies and partnerships in the meantime.

In addition to its more immediate consequences, the scandal presents a disturbing trend that isn’t likely to abate any time soon. While people are still busy pointing the finger, what it really boils down to is that it’s just the latest in a line of events that are damaging consumer trust and reinforcing the need for greater social responsibility. As consumers become evermore tech-savvy, there is also increasing discontent around the way our personal information is being used. Back in February, for example, Unilever’s CMO threatened to boycott Facebook and Google over consumer trust issues by withdrawing their advertising dollars.

The Facebook-Cambridge Analytica scandal isn’t the first of its type, and nor will it be the last. It’s simply yet another nail in the coffin of personal privacy and freedom of public opinion. Consumer trust continues to dwindle as people are becoming more and more careful about who they do business with and how much information they provide. While some companies strive to manipulate public opinion using the vast wealth of data collected from social media giants like Facebook, more ethical brands are finding themselves under increasing pressure to be transparent and make sure that their customers know how their personal data is being used. At the same time, legislators around the world are constantly refining data privacy laws and introducing new ones, such as the EU’s GDPR.

What Do Brands Need to Do?

As the online community reacts angrily to the recent revelations, people are getting more apprehensive about how they engage with online content. For legitimate brands trying to reach the right audiences by sharing relevant content and targeting specific personas, this presents a major problem. That’s because virtually all modern marketing tactics depend on carefully curated data-driven insights. Without data, you won’t be able to send the right message to the right people. That’s why transparency and directness have become so important in any sustainable marketing strategy. Here’s a look at what brands need to do to improve their marketing ethics and maintain social responsibility in light of the recent revelations:

        The Importance of Data Transparency

Consumers are becoming increasingly aware of the fact that they do indeed ‘pay’ for using free platforms like Facebook and Google by sharing personal information with advertising firms, as well as with third-party data-analytics companies, such as the now infamous Cambridge Analytica. While many social media companies are slowly getting a handle on things by banning morally questionable data-collecting firms, it’s ultimately up to you as a marketer to know where your data insights are coming from and be able to explain this to your target audience.

Building trust among your target audience is one of the biggest and most important challenges of all for any marketer. That’s why you need to be completely transparent about how you collect and use personal data. Furthermore, Europe’s GDPR, which also applies to any company anywhere in the world that collects data from citizens of the EU, requires complete transparency. That means, for example, not repurposing data taken from an online personality quiz for marketing. It also means that, just because someone provides you with their personal information while making a booking or a purchase, that doesn’t mean they’re also giving you permission to spam them with advertising material.

        Everything Starts with Consent

The Cambridge Analytica saga can indisputably be described as a scandal, because those 87-million Facebook users did not all give their consent to use their personal data for driving political campaigns. In fact, only 300,000 Facebook users installed the personality quiz app that Cambridge Analytica used to collect data from not only them, but also from everyone else connected to their networks (hence Facebook’s claim that data from 87-million accounts was used).

Every good relationship starts with consent and no, acting like a highwayman and demanding everyone to surrender the entirety of their personal lives in return for your product or service doesn’t count. Instead, marketers should strive to build valuable and lasting relationships that are built from the ground up on trust and consent. That means giving your customers control over how their data is used. Providing multiple consent options is a solid approach and, as per compliance regulations, you’ll also need to verify the consent. Finally, don’t even think of using pre-ticked boxes or any other method of default consent.

        Choosing Your Partnerships Carefully

Marketers typically collect data from a multitude of different platforms, using various apps to curate, interpret and visualize it. However, to be transparent and to ensure that your consent processes mean anything, you’ll need to know precisely where the data is coming from and how it’s getting into your hands in the first place. In other words, if you don’t know what your sources are, then you’ll have no control over the protection of your customers’ privacy. It’s also important to stress that, while the Cambridge Analytica incident involved collecting information for a forbidden purpose, companies like Facebook have themselves come under much criticism for the way they collect and share information in the first place. That’s why you need to verify your informational sources and partnerships and regularly conduct self-assessments to ensure that your company’s data-protection standards are always up-to-scratch.

Final Words

We live in a world where digital data has become the driving force behind the global economy as well as a lot of things we take for granted every day. However, just like any commodity, our personal information can be used for good or bad. Facebook is simply a byproduct of this new data-driven economy. It’s ultimately up to what people want to share about themselves and how brands are prepared to honor those wishes that’s important. As a marketer, you owe it to your potential and existing customers to ensure that their privacy and security are in good hands. That’s why social responsibility should always be a primary goal throughout your marketing efforts. Those are the sort of relationships you should be striving hard to build if you want to survive the rocky ride into an increasingly data-driven future.

Ysquared helps brands grow effectively through ethical marketing strategies and a value-adding approach. If you’re looking for a growth team you can depend on, send us a message, and we’ll be happy to help.