Cambridge Analytica Scandal’s Impact on Online Business

Revelations have came to pass these last few days about how Facebook has been subject to multiple data breaches by companies looking to exploit the power of data for political gains. In this article we will be speaking about the implications this has on digital marketing.

The Guardian offers the best summary of the allegations against both Facebook and Cambridge Analytica, read their summary here.

How does this affect digital marketing?

“Big Data” is a buzzword that has been bounced around the online marketing industry for a few years. It correlates with the trend towards online personalisation that companies like Amazon and ASOS are championing. Big data allows marketers to spot patterns in consumer behaviour, build predictive consumer behaviour models and fit marketing messages into these predictive models.

Video credit: World Economic Forum

Powerful marketing techniques like this have been gaining traction in recent years because they work.

We are in the data driven era where online customers can be properly identified and served personalised ads at mass scale. This is essentially what Cambridge Analytica achieved with voters – personalised political adverts designed to sway a voter’s perception of a candidate within a data proven model.

Data driven campaigns are used in businesses every day. They help companies maximise ad spend by delivering more relevant messages. But now the sheer power of data driven campaigns has been exposed as it has actively interfered with democracy. What everyone in the online marketing world is waiting for is the regulations that will surely come.

Governments cannot allow their citizen’s information to be taken illegally. This put pressure on governments to introduce stricter data protection acts that will almost surely restrict what data can be gathered and used.

(It is important to note that the overwhelming majority of online campaigns do actually gain their information legally.)

Let’s have a look at what areas could be affected.

Facebook Advertising

It is impossible to predict how regulations will effect Facebook advertising. On the one hand, the social media giant is generally good at keeping information secure (we’re not having a laugh here, they seriously are). However, it makes us question ‘does the social media giant capture too much data?’. And if so, then ‘how much data is too much data?’.

Governments could put a limit on what data companies can collect. This could be devastating for Facebook who stand out in the market place as having one of the largest amounts of data of any advertiser on the planet.

Germany is now seeking to restrict Facebook.

And Facebook are now under federal investigation is the US.

Restrictions could limit the data collected and in-turn the relevancy of ads served. This will increase add spend as relevancy decreases.

Google and PPC Advertising

Google knows a lot about you. It tracks your searches, the websites you visit, the places you go to via Google Maps and much more. If you are in the UK have a quick look here at all of the information Google has on you.

PPC advertising could suffer in the same way as Facebook advertising could.

However, Google doesn’t hold too much data on your interests, other than what is gathered by putting two and two together based on your activity whilst using their apps. As Google doesn’t hold too much information this medium probably won’t change too much.

It is worth noting that regulations could limit what information Google can store, thus reducing relevancy the same way Facebook may or may not see it’s ad relevancy limited.

Search Engine Optimisation

Search engine optimisation is technically not advertising. It is all about being in the right place at the right time. With SEO you are not pushing an advert out to people, you are simply placing your products and services in places where people look to buy can see them.

As it is not really advertising, people trust websites in Google’s search pages a lot more than in adverts. In-fact Smarter Insight’s report suggests that search is the 2nd highest converting medium, only after email!

Source: Smarter Insights

The Dangers of Data-Abuse

As online marketers we sometimes get annoyed at things like this. For us, online marketing is all about connecting people, ideas, services and products together over different geographic locations. It’s an amazing time we live in and data allows us to get closer to our customers and offer an ever more personalised service. Personalisation help us create relationships with our customers and constantly up our game.

Companies that abuse the openness of the internet should face harsh penalties. It spoils it for the rest of us who are simply trying to use data to offer a better service.

The result of stricter regulations will be higher ad spends for businesses of all sizes and more irrelevant adverts for customers. No-one wants that!

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