How Rising Public Concern Around Facebook Privacy Impacts Everyone’s Bottom Line
Well, the internet’s honeymoon period is definitely over. The rise of the term “surveillance capitalism” encapsulates how much of the public has come to view their online lives; what was once lauded as “connectivity” is now perceived as sinister, exploitative, and intrusive.
How did we get here? And what are the ramifications for people and businesses whose livelihoods depend on reaching customers online?
How Did Our Online Utopia Become a Dystopia?
First, a little recent history. Most internet tech giants don’t charge for their services (e.g. Google, YouTube, Facebook, etc.). Instead, they create advertising platforms and sell ad space on their platforms to marketers. For most marketers, there are really only two games in (the virtual) town: Google and Facebook. And for most people on the planet, Facebook is the primary gateway to online community. So when we talk about people having lost trust in the internet, a lot of that is their having lost trust in Facebook.
In 2018, it seemed like Facebook was embroiled in a new scandal every week. Early in the year, courts in Germany and Belgium ruled that Facebook’s data collection policies and user tracking broke privacy laws.
A month after that, it was revealed that the political firm Cambridge Analytica was able to improperly “scrape” data from almost 90 million Facebook users, thanks to people giving shady apps access to their profiles. (Yes, those quizzes.) By midsummer, Facebook had announced it was under investigation by the FBI, SEC, FTC, and Department of Justice over the Cambridge Analytica affair.
In late summer, HUD filed a complaint against Facebook for allowing housing discrimination through its targeted ads, and in September, a security flaw allowed hackers to hijack 50 million accounts. Other security flaws allowed hackers to view personal info and hidden photos of millions of other Facebook users, and to finish the year strong, it was revealed that Facebook had hired a company to smear and retaliate against Facebook critics, including government officials.
All in all, it was a disastrous year for the most popular site on the internet.
Fallout and Aftermath
So how do Facebook’s problems affect the rest of us? Good question. At Clever Real Estate, our effectiveness as a real estate technology company depends on our ability to connect with customers online, so we surveyed 1,139 Americans about their feelings regarding online advertising and the internet at large. Some of our findings might surprise you.
First off, a whopping 95% of surveyed users were concerned about maintaining their privacy on social media in general. For a platform that purports to bring people together, this is a striking reversal.
Nearly as many people have similar feelings about Facebook. Of our survey respondents, 80% expressed concerns about their privacy on Facebook. Anyone with a working knowledge about online marketing understands why: Facebook’s very business model is the commodification of user data.
Marketers who use Facebook are able to target consumers by demographics, interests, behaviors, connections, location, and more. To say they’ll better secure your data has no bearing at all on how they’ve used and will continue to use your data.
Speaking of those social media ads, though: 76% of Americans find them annoying, and 83% find it creepy or annoying when a brand’s ad follows them around online (i.e., remarketing). Obviously, “creepy” is not how you want your ad campaign to be described by your target market, and this perceived creepiness is already impacting the bottom line.
According to our survey, only 37% of Americans bought a product or service in 2019 because of a social media ad; this is a striking drop from 2017, when another survey found that 76% of consumers had bought a product based on a brand’s social media post. This suggests that online ads that were once seen as intimate and authentic have suddenly come to seem invasive and, yes, “creepy.”
All this has made it harder for new businesses to get their foot in the door: According to our survey, only 30% of Americans are comfortable submitting their personal information online to a brand with which they’re unfamiliar. The internet, which was supposed to be the great democratizer and leveler, has become a platform for the established big players.
How should you act on these findings? Well, super-specific targeted ads are now seen as creepy, and the effectiveness of social media-based advertising in general may be waning; it may be time to reevaluate both.
Trust is more important than ever, and building up your brand is a vital step for establishing authenticity and trustworthiness. Oh, and something as simple as presentation can go a long way: 86% of Americans and 92% of millennials say website/app appearance was important when deciding whether or not they’d offer up their personal information to a brand.
Ben Mizes is the Co-Founder and CEO of Clever Real Estate, a referral network that connects home buyers and sellers with top-rated agents at a discount rate. Ben is also an active real estate investor with 22 units in St. Louis, and a licensed Real Estate Agent in the State of Missouri.