Analytics, Big Data, Digital Strategy, Leadership

Facebook: Mind Your P’s!

25 Nov , 2018  

Facebook has never felt the heat it is feeling now. How did this happen? They are a darling promising marketers the reach to nearly every person through customized media. Success was rolling in as more and more advertisers saw the light and loaded up on ads. And, why have Amazon, Apple, Microsoft with its LinkedIn and Google stayed out of the fray? It boils down to the volatile mix of the realms of personal, political, and professional media (the 3 P’s) at Facebook that has created a super storm. Facebook has simply missed the expectation of constituents in these realms, especially by mismanaging its platform for politics.

Let’s look at these major realms and automated algorithms got things wrong.

Personal: Facebook overtook MySpace (does anyone remember them?) because they gave control to users on their data and properly reacted when MySpace said member data was corporate data. Facebook had solutions for companies, advertisers, and naturally that grew the base. It was innovative and helped people met long lost friends. Facebook seemingly could not miss. Earth to Zuck…people think everything about them is their property, including their data on Facebook. When Facebook let Cambridge Analytica and others use and access user data in the name of profits, users concluded that Facebook did not respect or protect user data. Users felt cheated, used, and abused. Sellout! We expect better from our favorite cereal brands and Facebook did not even hit that mark. After Facebook realized they were had by smart(er) data people, they were clearly embarrassed and wanted to show it was evil work by others, and not really Facebook misdeeds that created the maelstrom. Really, it was lack of attention and poor protection of user data that allowed others to access user data. Data hacks and data scandals did not help restore trust after the 2016 misdeeds. This means allowing political parties, Russians, Cambridge Analytica, and post cover-up work by the FBers when the FBIers showed up pissed off everyone. That all equals No Bueno. People expect to own, control, and have the ability to influence data about themselves.

 

Political: At some level, all firms have a political leaning, either because it helps the firm or because it reflects the politics of the people of the firm. Expressing the political view is a challenge and a decision that must be taken carefully. The challenge for Facebook is that its community is the US, the World, and about anyone that signs up. Expressing any political slant will result in many very unhappy employees, users, advertisers, and governmental officials (that might want to retaliate). Microsoft seems to have kept politics down in LinkedIn. Amazon, Google (maybe, but there are claims of Googlers censoring conservative ads), and Apple seem to have stayed out of expressing politics in their digital platforms. Once you express politics on a platform, you will offend some people. And given our split country, you are likely to offend millions of number of people. Politics and business are not a good combination. Facebook seems torn. It wants to be a community that can discuss politics and strive for good and maybe be a replacement for government or even democracy (at some level), but that causes problems for business. Americans like their business and politics separate. Advice for Facebook: Good business stays out of politics and good politics should not look like a business, unless you run a foundation 😉 .

Professional: Companies, advertisers, media agencies, and every cupcake store and lemonade stand wants to advertise on Facebook. But when the advertisement platform does not work on Black Friday and Facebook does things like trying to cover-up the Russian campaigns or smear Soros after his attack, you have to wonder what God-view control Facebook has over its platform and who might be in the bullseye next. Business is business. Keep it clean and do what is good for business. Lying, covering-up, and trying to convince members and governments that you are not political is a problem, especially after the fact. Get back to helping cupcake bakers and lemonade stands reach neighbors. It was wonderful when it worked. It was also nice to catch-up with old schoolmates. Thanks for that.

The best thing for Facebook would be to get out of politics. Stop trying to be a form of government, remove political advertisements, do not extend support to political parties, and get out of the business of selling, picking, predicting, or even being in politics. But the money and power were too much to turn down in 2016 and being part of the election felt great. The fallout is showing that cost was much greater than imagined.

Personalized media became the problem, even thought it was a holy grail to marketers. We learned that FB did not even know how to protect, manage, or even optimally connect to its users. Others did it better, especially with political messages. The promise of Facebook to advertisers, media creators, and even to members was that its algorithms would identify, recommend, and feed content that users would most want. It all sounded great when it was focused on the benign: sports, general news, company advertisements, classmates of the past, and fun stories. When the algorithms began to spread politics and then censor politics, and FBers picked some politics over others it became a huge problem. Does FB play favorites in the business advertisements, too? Can it? Sure. Will it ever do it? Who knows? It played in politics. Now, we know that the people with God-view can make changes that impact what millions of people see. Policies, censorship, and content approval are the name of the game. What is fair is harder for Facebook to define. The use of algorithms was gamed. Now, Facebook is in a battle to show it is concerned about the user experience, when it was previously concerned about profits from its platform. Facebook recently missed investor expectations and has also missed user expectations. Mind your P’s, Facebook.

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About Russell Walker, Ph.D.

Professor Russell Walker helps companies develop strategies to manage risk and harness value through analytics and Big Data. He is Clinical Professor of Managerial Economics and Decision Sciences at the Kellogg School of Management of Northwestern University. He has advised the World Bank, the Department of State, SEC, IFC, multiple US Senators, the Bank of England, and leading corporations.

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His most recent book, From Big Data to Big Profits: Success with Data and Analytics is published by Oxford University Press (2015), which explores how firms can best monetize Big Data. He is the author of the text Winning with Risk Management (World Scientific Publishing, 2013), which examines the principles and practice of risk management through business case studies.

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Russell Walker helps companies develop strategies to manage Risk and harness value through Analytics and Big Data. As Clinical Professor at the Kellogg School of Management of Northwestern University, Russell Walker has developed and taught leading executive programs on Big Data and Analytics, Strategic Data-Driven Marketing, Enterprise Risk, Operational Risk, and Global Leadership. He founded and teaches the popular Analytical Consulting Lab and Risk Lab, experiential classes, which bring Kellogg MBAs together with real-world projects in Analytics and risk evaluation. His is the author of the book From Big Data to Big Profits: Success with Data and Analytics (Oxford University Press, 2015) which examines data monetization strategies and the development of data-centric business models in the new digital economy. He is also the author of the award-winning text Winning with Risk Management (World Scientific Publishing, 2013), which examines the principles and practice of risk management as a competitive advantage. Dr. Walker consults with firms on the topics of Big Data and Analytics, Risk Management, and International Business Strategy. Russell Walker can be reached at: russell-walker@kellogg.northwestern.edu @RussWalker1492 russellwalkerphd.com



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