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Facebook is scrambling to add safeguards against abuse of user data as it reels from backlash over the Cambridge Analytica scandal. Now TechCrunch has learned Facebook will launch a certification tool that demands that marketers guarantee email addresses used for ad targeting were rightfully attained. This new Custom Audiences certification tool was described by Facebook representatives to their marketing clients, according to two sources. Facebook will also prevent the sharing of Custom Audience data across Business accounts.
This snippet of a message sent by a Facebook rep to a client notes that “for any Custom Audiences data imported into Facebook, Advertisers will be required to represent and warrant that proper user content has been obtained.”
Once shown the message, Facebook spokesperson Elisabeth Diana told TechCrunch “I can confirm there is a permissions tool that we’re building.” It will require that advertisers and the agencies representing them pledge that “I certify that I have permission to use this data”, she said.
Diana noted that “We’ve always had terms in place to ensure that advertisers have consent for data they use but we’re going to make that much more prominent and educate advertisers on the way they can use the data.” The change isn’t in response to a specific incident, but Facebook does plan to re-review the way it works with third-party data measurement firms to ensure everything is responsibly used. This is a way to safeguard data” Diana concluded.The company declined to specify whether it’s ever blocked usage of a Custom Audience because it suspected the owner didn’t have user consent. ”
The social network is hoping to prevent further misuse of ill-gotten data after Dr. Aleksandr Kogan’s app that pulled data on 50 million Facebook users was passed to Cambridge Analytica in violation of Facebook policy. That sordid data is suspected to have been used by Cambridge Analyica to support the Trump and Brexit campaigns, which employed Custom Audiences to reach voters.
Facebook launched Custom Audiences back in 2012 to let businesses upload hashed lists of their customers email addresses or phone numbers, allowing advertisers to target specific people instead of broad demographics. Custom Audiences quickly became one of Facebook’s most powerful advertising options because businesses could easily reach existing customers to drive repeat sales. The Custom Audiences terms of service require that businesses have “provided appropriate notice to and secured any necessary consent from the data subjects” to attain and use these people’s contact info.
But just like Facebook’s policy told app developers like Kogan not to sell, share, or misuse data they collected from Facebook users, the company didn’t go further to enforce this rule. It essentially trusted that the fear of legal repercussions or suspension on Facebook would deter violations of both its app data privacy and Custom Audiences consent policies. With clear financial incentives to bend or break those rules and limited effort spent investigating to ensure compliance, Facebook left itself and its users open to exploitation.
Last week Facebook banned the use of third-party data brokers like Experian and Acxiom for ad targeting, closing a marketing featured called Partner Categories. Facebook is believed to have been trying to prevent any ill-gotten data from being laundered through these data brokers and then directly imported to Facebook to target users. But that left open the option for businesses to compile illicit data sets or pull them from data brokers, then upload them to Facebook as Custom Audiences by themselves.
The Custom Audiences certification tool could close that loophole. It’s still being built, so Facebook wouldn’t say exactly how it will work. I asked if Facebook would scan uploaded user lists and try to match them against a database of suspicious data, but for now it sounds more like Facebook will merely require a written promise.
Meanwhile, barring the sharing of Custom Audiences between Business Accounts might prevent those with access to email lists from using them to promote companies unrelated to the one to which users gave their email address. Facebook declined to comment on how the new ban on Custom Audience sharing would work.
Now Facebook must find ways to thwart misuse of its targeting tools and audit anyone it suspects may have already violated its policies. Otherwise it may receive the ire of privacy-conscious users and critics, and strengthen the case for substantial regulation of its ads (though regulation could end up protecting Facebook from competitors who can’t afford compliance). Still the question remains why it took such a massive data privacy scandal for Facebook to take a tougher stance on requiring user consent for ad targeting. And given that written promises didn’t stop Kogan or Cambridge Analytica from misusing data, why would they stop advertisers bent on boosting profits?
For more on Facebook’s recent scandals, check out TechCrunch’s coverage:
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At a time when the models of traditional social networks are being questioned, it’s more important than ever to experiment with alternatives. Arbtr is a proposed social network that limits users to sharing a single thing at any given time, encouraging “ruthless self-editing” and avoiding “nasty things” like endless feeds filled with trivial garbage.
It’s seeking funds on Kickstarter and could use a buck or two. I plan to.
Now, I know what you’re thinking. “Why would I give money to maybe join a social network eventually that might not have any of my friends on it on it? That is, if it ever even exists?” Great question.
The answer is: how else do you think we’re going to replace Facebook? Someone with a smart, different idea has to come along and we have to support them. If we won’t spare the cost of a cup of coffee for a purpose like that, then we deserve the social networks we’ve got. (And if I’m honest, I’ve had very similar ideas over the last few years and I’m eager to see how they might play out in reality.)
The fundamental feature is, of course, the single-sharing thing. You can only show off one item at a time, and when you post a new one, the old one (and any discussion, likes, etc) will be deleted. There will be options to keep logs of these things, and maybe premium features to access them (or perhaps metrics), but the basic proposal is, I think, quite sound — at the very least, worth trying.
Some design ideas for the app. I like the text one but it does need thumbnails.
If you’re sharing less, as Arbtr insists you will, then presumably you’ll put more love behind those things you do share. Wouldn’t that be nice?
We’re in this mess because we bought wholesale the idea that the more you share, the more connected you are. Now that we’ve found that isn’t the case – and in fact we were in effect being fattened for a perpetual slaughter — I don’t see why we shouldn’t try something else.
Will it be Arbtr? I don’t know. Probably not, but we’ve got a lot to gain by giving ideas like this a shot.
When Facebook loses, who wins?
That’s a question for startups that may be worth contemplating following Facebook’s recent stock price haircut. The company’s valuation has fallen by around $60 billion since the Cambridge Analytica scandal surfaced earlier this month and the #DeleteFacebook campaign gained momentum.
That’s a steep drop, equal to about 12 percent of the company’s market valuation, and it’s a decline Facebook appears to be suffering alone. As its shares fell over the past couple of weeks, stocks of other large-cap tech and online media companies have been much flatter.
So where did the money go? It’s probably a matter of perspective. For a Facebook shareholder, that valuation is simply gone. And until executives’ apologies resonate and users’ desire to click and scroll overcomes their privacy fears, that’s how it is.
An alternate view is that the valuation didn’t exactly disappear. Investors may still believe the broad social media space is just as valuable as it was a couple of weeks ago. It’s just that less of that pie should be the exclusive domain of Facebook.
If one takes that second notion, then the possibilities for who could benefit from Facebook’s travails start to get interesting. Of course, there are public market companies, like Snap or Twitter, that might pick up traffic if the #DeleteFacebook movement gains momentum without spreading to other big brands. But it’s in the private markets where we see the highest number of potential beneficiaries of Facebook’s problems.
In an effort to come up with some names, we searched through Crunchbase for companies in social media and related areas. The resulting list includes companies that have raised good-sized rounds in the past couple of years and could conceivably see gains if people cut back on using Facebook or owning its stock.
Of course, people use Facebook for different things (posting photos, getting news, chatting with friends and so on), so we lay out a few categories of potential beneficiaries of a Facebook backlash.
Facebook has a significant messaging presence, but it hasn’t been declared the winner. Alternatives like Snap, LINE, WeChat and plain old text messages are also massively popular.
That said, what’s bad for Messenger and Facebook-owned WhatsApp is probably good for competitors. And if more people want to do less of their messaging on Facebook, it helps that there are a number of private companies ready to take its place.
Crunchbase identified six well-funded messaging apps that could fit the bill (see list). Collectively, they’ve raised well over $2 billion — if one includes the $850 million initial coin offering by Telegram.
Increasingly, these private messaging startups are focused on privacy and security, including Wickr, the encrypted messaging tool that has raised more than $70 million, and Silent Circle, another encrypted communications provider that has raised $130 million.
People who cut back on Facebook may still want to spend hours a day staring at posts on a screen. So it’s likely they’ll start staring at something else that’s content-rich, easy-to-navigate and somewhat addictive.
Luckily, there are plenty of venture-backed companies that fit that description. Many of these are quite mature at this point, including Pinterest for image collections, Reddit for post and comment threads and Quora for Q&A (see list).
Granted, these will not replace the posts keeping you up to date on the life events of family and friends. But they could be a substitute for news feeds, meme shares and other non-personal posts.
A decline in Facebook usage could translate into a rise in traffic for a host of niche content and discussion platforms focused on sports, celebrities, social issues and other subjects.
Crunchbase News identified at least a half-dozen that have raised funding in recent quarters, which is just a sampling of the total universe. Selected startups run the gamut from The Players’ Tribune, which features first-hand accounts for top athletes, to Medium, which seeks out articles that resonate with a wide audience.
Niche sites also provide a more customized forum for celebrities, pundits and subject-matter experts to engage directly with fans and followers.
People with common interests don’t have to share them on Facebook. There are other places that can offer more tailored content and social engagement.
In recent years, we’ve seen an increase in community and activity-focused social apps gain traction. Perhaps the most prominent is Nextdoor, which connects neighbors for everything from garage sales to crime reports. We’re also seeing some upstarts focused on creating social networks for interest groups. These include Mighty Networks and Amino Apps.
Though some might call it a stretch, we also added to the list WeWork, recent acquirer of Meetup, and The Guild, two companies building social networks in the physical world. These companies are encouraging people to come out and socially network with other people (even if just means sitting in a room with other people staring at a screen).
Facebook’s latest imbroglio is still too recent to expect a visible impact in the startup funding arena. But it will be interesting to watch in the coming months whether potential rivals in the above categories raise a lot more cash and attract more users.
If there’s demand, there’s certainly no shortage of supply on the investor front. The IPO window is wide open, and venture investors are sitting on record piles of dry powder. It hasn’t escaped notice, either, that social media offerings, like Facebook, LinkedIn and Snap, have generated the biggest exit total of any VC-funded sector.
Moreover, those who’ve argued that it’s too late for newcomers have a history of being proven wrong. After all, that’s what people were saying about would-be competitors to MySpace in 2005, not long before Facebook made it big.
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These kinds of leaks didn’t happen when I started reporting on Facebook eight years ago. It was a tight-knit cult convinced of its mission to connect everyone, but with the discipline of a military unit where everyone knew loose lips sink ships. Motivational posters with bold corporate slogans dotted its offices, rallying the troops. Employees were happy to be evangelists.
But then came the fake news, News Feed addiction, violence on Facebook Live, cyberbullying, abusive ad targeting, election interference, and most recently the Cambridge Analytica app data privacy scandals. All the while, Facebook either willfully believed the worst case scenarios could never come true, was naive to their existence, or calculated the benefits and growth outweighed the risks. And when finally confronted, Facebook often dragged its feet before admitting the extent of the problems.
Inside the social network’s offices, the bonds began to fray. Slogans took on sinister second meanings. The kool-aid tasted different.
Some hoped they could right the ship but couldn’t. Some craved the influence and intellectual thrill of running one of humanity’s most popular inventions, but now question if that influence and their work is positive. Others surely just wanted to collect salaries, stock, and resume highlights but lost the stomach for it.
Now the convergence of scandals has come to a head in the form of constant leaks.
The more benign leaks merely cost Facebook a bit of competitive advantage. We’ve learned it’s building a smart speaker, a standalone VR headset, and a Houseparty split-screen video chat clone.
Yet policy-focused leaks have exacerbated the backlash against Facebook, putting more pressure on the conscience of employees. As blame fell to Facebook for Trump’s election, word of Facebook prototyping a censorship tool for operating in China escaped, triggering questions about its respect for human rights and free speech. Facebook’s content rulebook got out alongside disturbing tales of the filth the company’s contracted moderators have to sift through. Its ad targeting was revealed to be able to pinpoint emotionally vulnerable teens.
In recent weeks, the leaks have accelerated to a maddening pace in the wake of Facebook’s soggy apologies regarding the Cambridge Analytica debacle. Its weak policy enforcement left the door open to exploitation of data users gave third-party apps, deepening the perception that Facebook doesn’t care about privacy.
And it all culminated with BuzzFeed publishing a leaked “growth at all costs” internal post from Facebook VP Andrew “Boz” Bosworth that substantiated people’s worst fears about the company’s disregard for user safety in pursuit of world domination. Even the ensuing internal discussion about the damage caused by leaks and how to prevent them…leaked.
But the leaks are not the disease, just the symptom. Sunken morale is the cause, and it’s dragging down the company. Former Facebook employee and Wired writer Antonio Garcia Martinez sums it up, saying this kind of vindictive, intentionally destructive leak fills Facebook’s leadership with “horror”:
And that sentiment was confirmed by Facebook’s VP of News Feed Adam Mosseri, who tweeted that leaks “create strong incentives to be less transparent internally and they certainly slow us down”, and will make it tougher to deal with the big problems.
Those thoughts weigh heavy on Facebook’s team. A source close to several Facebook executives tells us they feel “embarrassed to work there” and are increasingly open to other job opportunities. One current employee told us to assume anything certain execs tell the media is “100% false”.
If Facebook can’t internally discuss the problems it faces without being exposed, how can it solve them?
The consequences of Facebook’s failures are typically pegged as external hazards.
You might assume the government will finally step in and regulate Facebook. But the Honest Ads Act and other rules about ads transparency and data privacy could end up protecting Facebook by being simply a paperwork speed bump for it while making it tough for competitors to build a rival database of personal info. In our corporation-loving society, it seems unlikely that the administration would go so far as to split up Facebook, Instagram, and WhatsApp — one of the few feasible ways to limit the company’s power.
Users have watched Facebook go make misstep after misstep over the years, but can’t help but stay glued to its feed. Even those who don’t scroll rely on it as fundamental utility for messaging and login on other sites. Privacy and transparency are too abstract for most people to care about. Hence, first-time Facebook downloads held steady and its App Store rank actually rose in the week after the Cambridge Analytica fiasco broke. In regards to the #DeleteFacebook movement, Mark Zuckerberg himself said “I don’t think we’ve seen a meaningful number of people act on that.” And as long as they’re browsing, advertisers will keep paying Facebook to reach them.
That’s why the greatest threat of the scandal convergence comes from inside. The leaks are the canary in the noxious blue coal mine.
If employees wake up each day unsure whether Facebook’s mission is actually harming the world, they won’t stay. Facebook doesn’t have the same internal work culture problems as some giants like Uber. But there are plenty of other tech companies with less questionable impacts. Some are still private and offer the chance to win big on an IPO or acquisition. At the very least, those in the Bay could find somewhere to work without a spending hours a day on the traffic-snarled 101 freeway.
If they do stay, they won’t work as hard. It’s tough to build if you think you’re building a weapon. Especially if you thought you were going to be making helpful tools. The melancholy and malaise set in. People go into rest-and-vest mode, living out their days at Facebook as a sentence not an opportunity. The next killer product Facebook needs a year or two from now might never coalesce.
And if they do work hard, a culture of anxiety and paralysis will work against them. No one wants to code with their hands tied, and some would prefer a less scrutinized environment. Every decision will require endless philosophizing and risk-reduction. Product changes will be reduced to the lowest common denominator, designed not to offend or appear too tyrannical.
Source: Volkan Furuncu/Anadolu Agency + David Ramos/Getty Images
In fact, that’s partly how Facebook got into this whole mess. A leak by an anonymous former contractor led Gizmodo to report Facebook was suppressing conservative news in its Trending section. Terrified of appearing liberally biased, Facebook reportedly hesitated to take decisive action against fake news. That hands-off approach led to the post-election criticism that degraded morale and pushed the growing snowball of leaks down the mountain.
It’s still rolling.
How to stop morale’s downward momentum will be one of Facebook’s greatest tests of leadership. This isn’t a bug to be squashed. It can’t just roll back a feature update. And an apology won’t suffice. It will have to expel or reeducate the leakers and disloyal without instilling a witchunt’s sense of dread. Compensation may have to jump upwards to keep talent aboard like Twitter did when it was floundering. Its top brass will need to show candor and accountability without fueling more indiscretion. And it may need to make a shocking, landmark act of humility to convince employees its capable of change.
This isn’t about whether Facebook will disappear tomorrow, but whether it will remain unconquerable for the forseeable future.
Growth has been the driving mantra for Facebook since its inception. No matter how employees are evaluated, it’s still the underlying ethos. Facebook has poised itself as a mission-driven company. The implication was always that connecting people is good so connecting more people is better. The only question was how to grow faster.
Now Zuckerberg will have to figure out how to get Facebook to cautiously foresee the consequences of what it says and does while remaining an appealing place to work. “Move slow and think things through” just doesn’t have the same ring to it.
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