Should Retailers Steer Clear Of Facebook After The Cambridge Analytica Scandal?
Although retailers are becoming savvier about using social media, they may be wary about Facebook after the revelation that Cambridge Analytica may have collected personal information from as many as 87 million Facebook users without permission.
The scandal has brought a lot of negative attention to Facebook, arming those who were already critical of the platform and forcing Founder and CEO Mark Zuckerberg to be grilled by Congress.
The RTP team weighs in on whether Facebook marketing is still a good choice for retailers, and how retailers can protect themselves (and consumers) while taking advantage of Facebook’s potential.
Debbie Hauss, Editor-in-Chief: I agree with Scott Galloway that Mark Zuckerberg has not stepped up when it has come to protecting Facebook users’ personal data, allowing enterprises with political agendas to infiltrate the platform and take advantage of unknowing consumers. I do think, though, that if the Facebook situation had not elevated to the point where Russia was involved in influencing an American Presidential election, we might not be having this conversation today. We’ve seen a lot of bad behavior on social channels, including the Logan Paul Suicide Video that aired on YouTube. And businesses have just started reaping the benefits of retargeting consumers on Facebook and other channels based on their previous behaviors and predicted preferences. Even if Facebook suffers a deadly fate after this latest scandal, other social networks will pick up where it left off. As with many other situations in our retail world these days, consumers must be on the defensive; and businesses must be careful about crossing the “creepy” line.
Adam Blair, Executive Editor: I’m all in favor of Facebook and other social networks being held to account for irresponsible data usage and lax protections against trolls spreading fake news. (Although it seems just a tad hypocritical to criticize a social network on which people spill the most intimate details of their lives, complete with photos and videos.) Retailers and brands that want to use Facebook — and given its reach, many will certainly continue to do so — will need to ask these networks the tough questions about exactly where the data they’re using to target customers has come from. Also, they will need to observe the Golden Rule about personalization, as articulated by Forrester’s Brendan Witcher: Be overt about the reasons why you are collecting data: We would love to know your dress size because if you tell us, we’ll make sure to show you products that fit you perfectly. But be covert when you show the customer the best dress for them.
Marie Griffin, Managing Editor: Although the way Facebook collects, uses and shares its user data is currently in the crosshairs, the underlying issue of consumer data usage is critical to all online advertisers and retailers. U.S. consumers are conflicted about how their personal data should be used, which means more debacles like Cambridge Analytica could tip them toward demanding limitations on its use, as we are seeing with Europe’s General Data Protection Regulation (GDPR). In one survey, less than half of respondents were willing to exchange personal data for a benefit — 43% for discounts and/or deals, 39% for faster resolution to a problem and 20% for personalized recommendations — but 28% agreed that “I don’t like it when companies have my information when I don’t explicitly provide it.” Those last five words are the key. When a retailer develops trust with customers by respectfully using their personal data, and by not overusing it or selling it to third parties, the door is kept open for commerce. But you must make sure you develop a reputation for respectful data use now, so that you have customers to access if data rules ever change.
Glenn Taylor, Senior Editor: Despite the recent outcry against Facebook, its reach extends too far for retailers not to continue to use the platform to bolster sales and spread brand awareness. Building out a presence on the platform comes at such a low cost (at least upon entry) compared to other marketing initiatives that it can’t really be ignored. Retailers simply have a better chance to connect on a personal level by understanding the specifics of the customers that either land on their Facebook pages or click on their ads. Like anything else in this data-heavy world we live in now, retailers are going to have to explain what exactly they’re going to use data for in any situation, not just on Facebook. Of the top 100 retail brands, only 18% have easily understandable and navigable privacy statements, according to L2. Going ahead, retailers will have to improve communication on the benefits the consumer will receive in exchange for the data, as well as build in safeguards to make sure no one else has access to it.
Klaudia Tirico, Features Editor: I must agree with Adam in the sense that it is quite hypocritical for people to question and criticize Facebook for their irresponsible data usage when it is the channel where everyone and their mother shares every single thing about themselves. As unfortunate as the Cambridge Analytica situation is, it’s a mere hiccup for Facebook and the value it brings for brands and retailers. The use cases speak for themselves: JCPenney used Facebook dynamic ads to boost sales, which resulted in a 12.2% lift in online purchases and 10.4% lift in online revenue. GameStop leveraged Facebook’s collection ad format during the holidays and saw a 7.5X increase in incremental return on ad spend. After all is said and done, the Facebook privacy issue is definitely a learning opportunity for all and a chance for people to be smarter about how they collect, leverage and use user/consumer data…and share it!
Bryan Wassel, Associate Editor: Even if consumers lose trust in Facebook, the growing importance of social media in retail means companies can’t afford to ignore the platform, which had over 2.1 billion monthly active users as of Q4 2017. A survey by Bazaarvoice found that 47% of brands and retailers say being able to discover and buy products from social media channels will be more important to shoppers in the next year, and 81% say that integrating social channels with e-Commerce will be a priority. At the same time, brands must reassure shoppers that their data is not being misused. A survey by SAP found that 72% of shoppers expect retailers to protect their interests, while 66% expect retailers to be transparent in how they use personal data. Even if Facebook fails to retain the trust of its users, retailers can show their own trustworthiness when they reach out to the massive social media audience.