Media Forum: Has 'spy' row hit Facebook?

Will privacy issues drive users and advertisers away, Alasdair Reid asks.

The age of privacy is over (Mark Zuckerberg, Facebook founder, January 2010). Oh no it isn't, Mark (a surprising number of Facebook users and other interested observers, the very next day).

Since the industrial revolution, it has been temptingly easy, during periods of great structural upheaval, for people, and they're usually either unscrupulous or dangerously naive, to suggest that new technologies can somehow change human nature.

It's possible, of course; but not very probable. At its best, technology allows us to do more of what we like to do. Facebook, for instance, allows us to show off in a highly sociable way. There's a price to be paid for that, of course - but it absolutely has to be a reasonable and fair price. And that's not all. This has to be a transparent interaction too.

Zuckerberg's odd remarks - because, let's face it, he is, when it comes down to it, rather sensitive about possible public abuses of his own person - have re-energised a simmering debate. Some Facebook users have always been unhappy about the way that non-friends have been able to snoop on them. And they've also been uncomfortable with the notion that their personal details are being used as the raw material of behaviourally targeted advertising.

It all came to a head last week. A "Quit Facebook" campaign was timed to climax on 31 May. And it did, with slightly more of a whimper than a bang. Reports suggested that only 33,000 of Facebook's 450 million worldwide users cancelled their accounts.

And yet, rather surprisingly, the campaign succeeded in focusing Zuckerberg's mind. On 2 June, he announced that Facebook's privacy settings were being redesigned and simplified, allowing users significantly (and easily) to reduce the amount of information openly available to all.

He added, however, that he was "not changing anything about our advertising programmes" because, contrary to rumour, Facebook has never actually shared personal information with advertisers - only anonymous data reports that can allow the targeting of certain demographics.

That's as maybe. The issue may yet be subject to an ongoing regulatory investigation in the US. Arguably, though, the whole business has been hugely damaging - and not just from a user point of view. Additionally, it has surely hampered Facebook's ability to develop advertising products. And that's something it has been rather good at of late.

Yes, it's something of a worry, Pete Robins, a founder of the digital media agency agenda21, says - but he believes that most consumers will realise they have few genuine fears. "It's true that advertisers want targeting - and targeting needs shared information. But we don't want people to be upset. We don't want people thinking: 'How the hell did they know that about me?' With these things, there's always a vocal minority - and I believe their concerns are unwarranted," Robins says.

Norm Johnston, Mindshare's global digital leader, tends to agree: "My sense is that, long term, this hasn't damaged Facebook. This whole episode hasn't been brilliant - and Facebook's approach in the recent past has been thoroughly confusing. But this latest move shows it realises it has to bring clarity to this issue or risk offending some users. What Facebook has in its favour is the scale it has and the amount of time and effort people have put into it. It would take something really catastrophic for people to feel they had to remove all their content and start again."

Absolutely, Will Phipps, the head of planning at the7stars, agrees.

He says: "Users have undoubtedly become more suspicious about the amount of information that they've unwittingly shared with the world. However, I'm not sure, at this stage, that they are prepared to give up the free ability to connect, organise and share their lives."

But Adam Field, the head of social media at MPG Media Contacts, isn't quite so sure. He believes the episode could have serious unforeseen repercussions. He comments: "It will become concerning for users who just don't understand what the privacy settings mean."

And, he adds, Facebook, thanks to its inconsistent policies, has been largely to blame for creating this confusion. He concludes: "Overall, the new settings are clear, simple and give complete control to the user, but as these privacy issues continue, there could be a knock-on effect that results in brands missing out on vital opportunities to engage with their customers."

NO - Pete Robins, founder, agenda21

"Privacy and behavioural targeting might become more of an issue. But it's not particularly a Facebook issue. It's an issue for MSN and Yahoo! and the advertising networks too. So, my feeling is that Facebook in particular won't be that affected."

NO - Norm Johnston, global digital leader, Mindshare

"It's good that Facebook has been upfront about the data issue - and has been able to reassure people that it's serious about maintaining their anonymity. The problems come when you're not upfront about what you're doing."

NO - Will Phipps, head of planning, the7stars

"Users have undoubtedly become more suspicious. For advertisers, it's one more loophole closed in their ability to micro-target. But in the world of digital, where one door closes, another will always open up to those smart enough to find it."

YES - Adam Field, head of social media, MPG Media Contacts

"Users worry about what they don't know. Although the Facebook change of policy is being done for the right reasons, it could result in them engaging less with brands on the site."

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