4 Reasons Data Privacy Is Just Too Boring to Matter

Facebook was simply the poster boy for an uncomfortable data revolution well under way, but the hearings were very revealing. I am not sure how we will finally manage the complex issue of data privacy. However, it is clear what is not likely to happen in the near-term.

When I think about the current controversy around Facebook, personal data and the recently departed Cambridge Analytica, I am reminded of MAD Magazine. (Stay with me for a bit.) MAD was a rite of passage for Gen Xers such as myself. Irreverent and satirical of all things pop culture, the magazine was edgy (for that time) and a shock to polite sensibilities of the day. At a time when most people’s exposure to comedy was laugh-tracked sitcoms and Carson’s “Tonight Show,” MAD exposed the artificially flavored vanilla entertainment we were consuming for what it was, formulaic and fake.

It may seem that MAD magazine is tenuously relevant to today’s topic of data privacy, and I would agree except for one critical element. While parents and teachers could feel the sedition and revolution brewing in those pages they were comically inept at doing anything about it. Despite their frowns, despite all of their threats to censure, confiscate or ban the magazine, the magazine made its mark on my generation and contributed to a progression in brutally honest and sardonic comedy (“The Simpsons,” “Family Guy,” “Chappelle’s Show,” etc., etc.)

Fast forward to the congressional hearings where Mark Zuckerberg was grilled for hours on Facebook’s use of user data. Facebook was simply the poster boy for an uncomfortable data revolution well under way, but the hearings were very revealing. We saw Senators struggle, sometimes comically, to understand what really bothered them about this fiasco. Occasionally, they threw out threats to salvage their visibly worn-out veneer of authority. It was that familiar hapless authority figure trying to manage something ambiguously unnerving, while submitting to the inevitable change.

I am not sure how we will finally manage the complex issue of data privacy. However, it is clear what is not likely to happen in the near-term.

  1. There Will Not Be Any Effective Data Privacy Legislation. First, legislators don’t fully understand the intricacies, so they are rightfully hesitant to take strong action. Even more important, consumers are no longer naive about how their personal data could be accessed and used. There are even widely accepted conspiracies about murky information-gathering techniques, such as digital eavesdropping (“I swear XYZ is listening to my conversations because …”). Yet, every day and in very clear ways, consumers are giving permission by default when they post or view content and engage with apps. The lesson is that consumers care, but not enough to meaningfully change behavior. While a case can be made that data-driven services are designed for addiction and compel users to act in personally detrimental ways, like cigarettes, they are still a long way from becoming vilified products. For now, market demand will continue to drive lax data policies.
  2. Business Models Will Not Change Dramatically. When asked in the congressional hearing if there was a mass exodus of Facebook users since the Cambridge Analytica fiasco, Mark Zuckerberg said there was not. Furthermore, after the hearings concluded, Facebook stock rose 4.5% and has been on a major recovery trend since. If you believe in the wisdom of market forces, then this is a very strong vote for business as usual.
  3. Permission-Based Data Policies Will Provide Temporary Relief. These policies mean consumers decide where and how their data can be used. They will be ineffective, but will provide temporary cover until the next blow-up. These policies assume the consumer has time, ability and inclination to review the data policy of every platform they use. There will be companies who will enter into the personal data market, helping consumers monetize and manage their data, but their interest generally will not align with data privacy. The only one really interested in privacy is the consumer and most will not pay for it.
  4. No One Cares. Of all of my posts, the most informative was an article that discussed the wide landscape of consumer data. It is also the one that has had the fewest views, by a long shot. It is so dull, I rarely reference it and that should tell you all you need to know about the battle between sound data policy and data-driven consumerism.

Lessons From the Facebook Fiasco

The funniest and the most ironic part of this Facebook fiasco is that target marketing based on data actually worked. If it didn’t, no one would care about some data geeks hoarding data somewhere in the cloud. And any reader of a magazine called “Target Marketing” shouldn’t be surprised by any of this.

The funniest and the most ironic part of this Facebook fiasco is that target marketing based on data actually worked. If it didn’t, no one would care about some data geeks hoarding data somewhere in the cloud. And any reader of a magazine called “Target Marketing” shouldn’t be surprised by any of this.

Why should it be surprising that, with all of those behavioral and demographic data that Facebook collected, some analytics company could actually figure out who is more likely to vote for Trump? A mediocre-level analyst can do that with data far less immediate and complete than what were used in actuality.

In fact, the whole basis of the Facebook business model is that:

  • It is the largest billboard in the world; and
  • It can effectively deliver customized messages to each individual.

Facebook has been doing this kind of targeting with or without any third-party analytics vendor such as Cambridge Analytica. The fact that Facebook is expert in grabbing people’s attention (or their eyeballs) for elongated time makes it ever more powerful and effective than third parties; hence, all of the hoopla in the media.

The scarier part (to me, at least) is that a senator actually had to ask Mr. Zuckerberg about his company’s business model, to which he simply answered it shows targeted ads to its users. Seriously, how these fine gentlemen on Capital Hill will regulate any information business is beyond me. Maybe these senators should delegate that work to their grandchildren.

Because I — like readers of this fine publication — do target marketing for living, I wouldn’t blame Facebook for doing things that I would have done myself. And yet, this recent revelation of Facebook’s business with Cambridge Analytica doesn’t sit right with even the most avid practitioners of target marketing. It is not just the fact that it actually affected the presidential election, which is a personal matter for many. Even without any political ramification — which certainly is acting as a magnifying glass in this instance — something certainly went wrong here. Basically, sensitive data were mishandled, and there is no sign of data governance when it comes to sharing data with third-party companies. Considering the influential power of Facebook, no wonder everyone is talking about it as a scandal.

But here, let’s dig into this from a data player’s point of view.

PII – Handle With Care

Facebook is sitting on an amazing amount of personal data, as the users voluntarily share them. Just the profile page alone is a goldmine. Added to that, Facebook has data regarding what the users clicked, liked, shared, reviewed and bought. We are talking about all three major elements of data in target marketing — demographic, behavioral and attitudinal data (refer to “Big Data Must Get Smaller”) all in one place, with an amazing depth in each area. In the business of analytics, that is like having some kind of superpower.

In the early days of Facebook, I voluntarily shared the details of personal information, just to see how good the targeting would be. For the record, to this date, I’m not totally blown away by its targeting accuracy.

Sure, I put down my hobby as guitar playing, and Facebook would show me more guitar stuff. Anyone should be able to do that with such explicit data. But when I go to my Facebook wall, it still feels like I’m looking at a billboard, not a series of targeted messages. Especially the sponsored ads on the right side of the screen. Facebook has been showing me some SUVs (I’m not an SUV guy) and men’s apparel commercials (sure, I’m a man) for days. Meh. That looks like Facebook is just selling regular banner ads, targeted with some rudimentary selection logic using basic data.

Even during the last election cycle, with all of those hyper-political memes and reactions to them floating around, I’ve seen some “totally off the mark” political ads on my wall. What a shame, with all of that rich data in its hands.

So this Cambridge Analytica comes along, and promises the kinds of things that Facebook is supposed to be able to do with all its data for a bunch of politicians. And some bit the bait and paid a good amount of money for the vendor’s services.

Now, this third-party company got to have access to the Facebook user data or a pathway to collect more data on Facebook users. For that matter, any app that runs on Facebook — such as innocuous-looking personality tests — is specifically designed to harvest data. We all do it because it is fun to play, and the cost seems low. Not to offend anyone, all the apps normally require is signing on using Facebook ID. But that is all they really need.

Things get a little tricky there, though; so, who owns the data? The user, Facebook or the third-party vendor? It really depends on that user agreement that 99.99% of users didn’t bother to read. If I must provide an answer as a professional data player, I’d say “all three,” because data collection and refinement warrants some value. Saying a user has the sole ownership of data is like saying that a rice farmer has a right to every piece of sushi sold in restaurants indefinitely.

People who do target marketing for living, in this case or in general, are less scared of such data sharing. What would be the worst thing that could happen? That I get to see an ad of a political candidate who I can’t stand on my Facebook wall? That is, however, if the data are used for general targeting purposes only. Data breaches are indeed scary, because pretty much everything that you put in and you did are linked to your personally identifiable information (PII).

We know that no reputable data player would look up one person at a time by name and see what she is up to. In this case, the operative word is “reputable.” Even the folks who gave permission to Facebook to collect and use data wouldn’t agree that that third-party vendor was indeed reputable. Figuring that out is assumed to be the duty of Facebook, and it is sad that even it didn’t seem to know.

Facebook did not have a good handle on “who gets to use what data.” That is the most unsettling part for people who deal with data for living. Facebook is not exactly dealing with credit card or medical data there, but the sheer volume of data makes the matter as serious. Would it be harsh if I say that Facebook, in pursuit of increasing its revenue and shareholder value, just went for things that it shouldn’t have gone for? Where is the governance? All this mess, for what? Some “semi-accurate” targeting? (I’d love to see some reports on the backend.)

Data-Mining Friends, Too?

It is one thing that Facebook or its partners used data that I shared on Facebook in the form of profile and interests. It is quite another if some shady vendor downloaded the entire list of my friends and call it “its” data source.

That is just a sleazy practice. I’m pretty sure that I did not give permission to share the entire list of my friends with a company that conducts some goofy political spectrum test. No one would put that in an agreement in case just “1” person reads it. Because they themselves would know that that is a sleazy thing to do.

Data players must follow a very simple rule; if you don’t want someone to do certain things with your data, don’t do it yourself (refer to “Don’t Do It Just Because You Can”).

Don’t Be a Data Hoarder

In the business of targeting (or analytics for such targeting), more data don’t always guarantee accuracy. There are all kinds of data out there, and not all data are useful or effective in prediction (refer to “Not All Databases Are Created Equal”). That is why I have been writing repeatedly that one must set the project goal first, not just before some elaborate analytical exercise, but even before data collection.

Mindless hoarding often gets the collector in trouble like we are seeing here. Sometimes “more” data increase only trouble, not the targeting accuracy. Yes, the databases must be broad, accurate, recent and consistent to be useful. But too many data players became too greedy, and there are consequences of being greedy.

Maybe the notion of Big Data gave a wrong impression that big is always good. There are costs involved in dealing with really large data, and another lesson that we must learn here is that a collector can make people mad if “they” think that he is going after too much data.

If the goal is to obtain a “reasonable” level of accuracy in targeting, no, you don’t have to have every piece of data about the target. No analyst likes missing values, but there will be no complete database now or in the future, anyway. A job of analysts is to make the most of what they get, not asking for the entire universe. So, always consider the cost of hoarding too much information, including the social cost.

If all Cambridge Analytica wanted was to predict who was more likely to vote for Trump last year, there were many safer and simpler ways to go about doing that.

Facebook Is Too Powerful?

The ironic part of it all is that Facebook, thanks to its vast coverage, doesn’t require pinpoint targeting precision, anyway. It’s not like it’s going to spend over $1 per piece in direct mailing. Targeted messages are cheap on that platform, and the risk of being wrong is not that high (relatively speaking).

And it seems like Facebook knows it, too. Based on numerous articles that I read about this incident, its analytics is more about maintaining a captive audience by creating a very addictive platform. If the number of eyeballs and time spent on the page are what they are really pursuing, they seem to be doing a fine job there.

If the goal is about increasing targeting accuracy — while not pissing off a great number of people — then it is obvious that Facebook must tighten up its grip on data governance. Like most other data players like us have been doing all along.

Facebook will remain as a powerful force in the market. With or without precision targeting, it’s the biggest billboard in the world. Let’s just say that I didn’t sell off Facebook stocks because of all of this. But if Facebook really wants to benefit human collectives like it used to say in the beginning, lots of significant changes are warranted. And I think that subject is for other forums, not here.

Marketing Data Is Hanging Out There ‘Like’ Ripe Fruit

The storm raging around Facebook and the supposedly unauthorized use of data from 87 million members of its digital community by the British firm, Cambridge Analytica, is hardly surprising. That this data, scraped from Facebook’s files, was used to support Donald Trump’s election campaign just adds thunder and lightning and moves us one step closer to Big Brother not only watching us, but influencing our lives.

The storm raging around Facebook and the supposedly unauthorized use of data from 87 million members of its digital community by the British firm, Cambridge Analytica, is hardly surprising. That this data, scraped from Facebook’s files, was used to support Donald Trump’s election campaign just adds thunder and lightning and moves us one step closer to Big Brother not only watching us, but influencing our lives.

That Mark Zuckerberg, Facebook’s co-founder and CEO, in two days of difficult testimony before the U.S. Congress this week had no reservation to say, ”We have made a lot of mistakes in running the company,” is no surprise either. The data genie has for some time now been out of the bottle and it is not going back in, no matter what Congress or Facebook manage to do to tame the beast.

Those of us in the business of tailoring promotional messages to tightly defined targeted prospects are likely to have a certain “and then what” attitude to all this (possibly even with just a smidgen of admiration for Cambridge Analytica, if its magic algorithms really work as advertised: no, certainly).

Like many of you, my day job, for more years than I like to mention, has been to find imaginative ways to sell things direct to consumers using all kinds of data to identify and communicate with the most likely prospects. It is no bad thing that the issue of just how private or public the data we have shared with Facebook and other digital friends has belatedly leaped into the headlines. The $42 billion plunge in Facebook’s share value over the first few days of the discovery certainly signals that the data issue is a serious one, crying out for resolution, and investors are getting nervous.

Writing on his daily blog for the New York Times, David Leonhardt says that Mark Zuckerberg sees himself as “a kind of enlightened despot.” He points out that while Zuckerberg says his only interest is in what’s best for Facebook users, this can conflict with his obligation to deliver the biggest bang for the investors’ bucks.

“So what happens when Facebook’s business interests and society’s broader interests aren’t aligned?” he asks. “I think the solution to these problems is clear in broad strokes — if still very uncertain in the details. Facebook, along with other huge technology companies, need stronger government oversight. Zuckerberg, to his credit, comes close to acknowledging as much.”

Before everything had grown to mega-scale, the problem was always who had the data and could it be used for marketing? When I started in this business, it wasn’t even called “data:” We had a bunch of mailing lists that had been collected, mostly from people who ordered a product for delivery, rented a television or joined an organization. I remember how proud I was when I got hold of the list of alumni from my university.

What I was certain would be a winning mailing to them returned not a single order, but one letter demanding that no further mail be sent to that person.

We know (although the public is becoming more aware) that what was then an unsophisticated industry of people ordering through the post has, along with the use of computers and advanced data technologies, grown into a huge, highly sophisticated (some might say too sophisticated) component part of the communications industry. The seller wants to know as much as he can about each person; not only the obvious demographics, but increasingly the more important psychographics, the emotional triggers that influence buying decisions often without the individual even knowing it. The seller wants to vacuum the web for the latest data. Total digital media spend increased from $16.9 billion and 6 percent of total media investment in 2007 to $83 billion and 36.7 percent in total media investment in 2016, according to eMarketer.

The now-removed CEO of Cambridge Analytica bragged “of being able to parse and influence the electorate through ‘psychographic’ algorithms derived from that data,” wrote The New Yorker. After Trump won, Alexander Nix, the head of Cambridge Analytica, crowed that the company’s psychographic algorithms had carried the day. His chief technical expert said: “We would know what kind of messaging you’d be susceptible to and where you are going to consume it and how many times we are going to have to touch you with it to change how you think about something,”

“What’s the currency of the world now?” quoted The New Yorker of a leading consultant. “It’s not gold, it’s data. It’s the information.” Collecting and using data has become an essential part of the marketing business. Orwellian or not, that has become a reality.

Netflix knows what movies you like just as Amazon knows every purchase you have made and every item you have looked at. Your travel, your choice of clothes, the type of restaurants you like, the frequency of visits, the friends with whom you exchange chat and pictures are all now out there on the web. While many companies promise you privacy, few can guarantee it. If Equifax or even the security services of the U.S. government can be hacked and the data stolen, confidence that your data is safe may be more optimism than realism.

You and the availability of your data are something of a simple trade-off.

If you don’t want Netflix to stream movies to you when you want them (and even to suggest others you may like based on those you have seen) nothing obligates you to subscribe. If you don’t want to have your groceries or that 50-pound package of dog food delivered, no problem.

The choice belongs to each one of us.

The price for the convenience of the digital benefits is that you will always be giving up data about yourself. Some database out there will know you have a dog, the kinds of groceries you like (and can guess with accuracy the size of the family), how many and which types of films you choose and on and on and on. And there is no way you can ever get it back.

We tend not to think about any of this when we fill in the coupon or complete an order form. And until we get used to it, we can’t understand how the merchant from whom we recently purchased something knows to put ads for similar items next to the emails flooding our inboxes.

Remember that data is the fuel that powers today’s marketing engine and your data is the low-hanging fruit for marketers. Don’t expect them not to harvest it, to their benefit and yours.