I’ve just come back from being interviewed by journalist Adam Shaw for ITV’s current affairs programme Tonight. It airs on 3rd May.
Getting the ‘Zuckerberg-before-Congress’ treatment from a significantly better informed interviewer than a cavern of crumbling Senators was only slightly less terrifying while I defended Facebook’s use of data in enabling small companies to efficiently target people that may genuinely be interested in their services. In true journo fashion Adam continually repeated questions on the theme of “Isn’t this all a bit sinister?” whilst I reinforced the benefits and also repeated that targeted advertising has been going on for decades, many many businesses sell customer data (Facebook actually doesn’t) and whilst we have had a wake-up call due to the scapegoat that is Facebook right now, legislation such as GDPR has been needed for many years and if it is properly enforced will significantly help in protecting customer privacy and online security.
I thought you might enjoy reading through the prep I did in response to the questions I was given before hand. It will be interesting to see what comes out in the edit. Remember that Tonight’s audience is very broad so I attempted to keep things as simple as possible.
What is Facebook?
Facebook is a free social networking website and service where users can post comments, share photographs and links to news or other interesting content on the internet. User can also play games, chat live, and stream video.
It’s official mission is that it exists in order to give people the power to build community and bring the world closer together.
In reality people use Facebook to stay in touch with family and friends online as well as receive news, updates and entertainment from publishers and other organisations.
How does Facebook make money?
Facebook is entirely free for people like you and me to use. It makes money by selling advertising space.
Businesses can also create Pages completely free-of-charge and post updates to that page which their fans and followers may see. However, a complex algorithm controls what you as a user are shown in your News Feed. Priority is given to updates from friends and family with only a very small percentage of the content a commercial Page puts out being seen organically (that is free-of-charge) by its fans.
The way to get visibility for a Page’s content is to pay Facebook to show it to more people. This can be in the form of a “boost” for the content on your Page or in the form of an ad which users will see both in their news feed and also on the right hand side of the screen if looking from a desktop computer.
You’ll find that maybe one in 5 or 10 updates in your News Feed are “sponsored” content – namely content that a Page has paid Facebook to show to you. So whilst in some ways a free platform for businesses, in reality Facebook is now “Pay to Play” if you as a business want your content to be seen by anything more than a very small number of people.
It is this advertising that funds Facebook. Last year it made nearly 40 Billion Dollars in advertising revenue.
Unlike its rival Google, which enables advertisers to serve up ads based on keyword searches, Facebook’s value proposition is targeted advertising. And it is due to the data it uses for this that it has found itself in hot water with Congress and the Senate recently.
As with many digital and social media entities, if you aren’t paying for the product you are the product. Facebook is serving up access to you in return for you continuing to use the platform free-of-charge.
And to be honest, in many ways that’s the way media has always worked. Even before the internet, newspapers subsidised their cover price by charging for advertising space. That’s moved into an online environment now with all the major publishers selling ad space on their websites in return for your free or subsidised access.
What’s the targeting model behind the ads?
Facebook offers businesses some very detailed options on how they target ads.
Firstly there are simple demographics such as country, town, age, gender and language.
So I can target women that live in Norwich who are aged 25 to 35.
There are then some advanced demographics such as relationship status.
So I can target people who are single, or about to get married.
Businesses can also choose to target existing fans of their Page or even friends of their fans.
You can target people by education level – for instance graduates of those with masters degrees
Similar to LinkedIn ads people can be targeted by the industry they work in (although targeting by job title has recently been discontinued)
Targeting by income band and house value is common – although in keeping with some other targeting on Facebook these options tend to be more US centric or only available to American Pages.
Of particular relevance to the recent Congress testimony by Mark Zuckerberg, organisations have been able to target someone via their political persuasion and even even find people who have donated to political causes
Some very detailed information about your lifestage is used so organisations can target parents by the age of their children, grandparents, empty nesters, retired people and even corporate mums vs stay-at-home mums
Then there is an extremely long list of targeting by interests. This could be anything from an interest in engineering, theatre, the style of music you like, the genre of films that you watch, what you like to read, your approach to fitness and wellness, what you like to eat and drink, hobbies, travel and brands you like.
There are quite literally hundreds of targeting options and you can layer these up to define a very detailed picture of your target market
Now I maintain that this is a good thing. Surely it is better to be seeing ads that are relevant to you rather than ads from random brands that are of no interest?
In his recent Congress questioning Mark Zuckerberg said that Facebook’s targeting ability for ads meant that smaller businesses are better able to afford to advertise alongside big brands – targeting makes advertising more affordable for them as they are only hitting people likely to be interested.
It doesn’t just stop with demographics and interests though, Facebook can also target based on behaviours. Behavioural targeting can cover your propensity for online spending, your rate of technology adoption, whether you partake in online games, the type of things you buy online even down to the food you like. Facebook has about 30 different options in the travel section alone – are you a frequent business traveller, someone who likes cruises or even intending to travel to a particular country.
How does it work from an advertiser perspective?
Because of Facebook’s News Feed algorithm most commercial brands combine ‘organic’ content with paid advertising. Like this they are more certain of reaching their existing followers as well as finding others that might be interested in them.
The real opportunity for advertisers is the ability to reach the right people with the right message at the right time. Facebook enables businesses to achieve this owing to the highly sophisticated and complex array of data points it collects, meaning it understands which people will respond best to which ads.
Advertisers must have a Facebook Page in order to runs ads.
Facebook provides Advertisers with a self-serve platform for creating and running ad campaigns. This allows advertisers to choose the objective of their campaign, for example driving people to a website or making a purchase, and provides all the options for choosing targeting, setting a budget and what the ad creative looks like.
As well as the targeting options I have already explained, advertisers have other ways in which to target Facebook users:
- By installing the Facebook pixel on their website they can target ads to people who have visited their website – you may well be familiar with these retargeting ads from when you have visited a site such as the John Lewis website only to then find ads from John Lewis the next time you are on Facebook
- Advertisers can upload their customer database to Facebook and from that create what Facebook calls a ‘Custom Audience’. Facebook matches customer emails with it’s users to enable you to targets ads at them as well as the email marketing you would previously have been doing
- One final option is ‘Lookalike’ audiences. Facebook can target people that are similar to and behave in a similar way to a Page’s followers, or to it’s email list.
What information does Facebook collect and how?
When you sign up for an account you provide a fair amount of demographic information yourself.
Whenever you do something on Facebook, for instance post a photo, like a post or comment on something, Facebook records this and over time builds up a digital profile of your likes, dislikes, interests and so on. It also knows all of your connections – your Facebook Friends – and which people you communicate with on Facebook most often.
Facebook collects information on the computer and mobile devices you use to access its services. This includes information such as the device location, signal strength and even your mobile phone number.
Many organisations have installed Facebook-supplied code to provide tools such as Like buttons on their websites or in the apps, allowing you to Like and Share products, news articles, music and more. When you visit a page containing this code, or click on one of these buttons, Facebook records details of the website, the web page and the Like interaction in your digital profile. So for instance when you press Like on a product page on ASOS Facebook records the URL of the webpage, the details of the product, the corresponding ASOS Facebook Page and so on.
Additionally many organisation install an additional piece of code known as the Facebook pixel. This is provided to advertisers to help them understand the effectiveness of their ads, for example whether a purchase was made as a direct result of seeing an ad on Facebook.
What information does Facebook collect from third parties and how?
There are various ways of interpreting this question:
Firstly, as explained earlier, Facebook records things you do on third-party websites or apps that have installed one of the various bits of Facebook code.
Secondly, Facebook helps advertisers reach certain audiences by licensing data from a few well-established third party data providers such as Axciom and Experian. However, Facebook recently announced they are discontinuing this facility.
According to Facebook’s data policy it does collect information from third-party partners. It says:
“We receive information about you and your activities on and off Facebook from third-party partners, such as information from a partner when we jointly offer services or from an advertiser about your experiences or interactions with them.”
Remember too that Facebook owns a lot of other companies too and according to their data policy they do receive information about you from those companies. These might include Messenger Instagram and WhatsApp.
Facebook maintains that the information it collects us all about creating engaging and customised experiences for its users. It uses the information to create shortcuts and suggestions for you. Such as finding local events that you might be interested in, or connecting you with people that you know.
Does Facebook share our data with third parties?
The first thing to make really clear is that Facebook doesn’t actually sell anyone’s data, ever. This is widely misunderstood, and frankly Facebook have done a very poor job of explaining it.
However, when you participate in one of those viral quizzes, for example, you are using what’s known as a Facebook Platform App and by clicking to agree to the terms of the app (which you must do in order to get access to it at all) Facebook provides, with your consent, specific bits of your personal data such as your email address, your name and your profile photo, to the registered third-party FB app developer who created the app.
Up until 2015 Facebook allowed these app developers access to a lot more detailed information, including that of your facebook friends, in order to supposedly help developers build compelling apps and experiences. All app developers on facebook must agree to stringent Terms of Service which prohibits, for example, the sharing or selling of this personal data with any third party.
However, what facebook didn’t bank on was that app developers might break their agreement to the terms, and in the case of Aleksandr Kogan, would misuse this data by selling it to another company. So in 2015 Facebook significantly tightened the rules and restricted the level of data FB app developers could access. This is the area that has caused the recent controversy with Cambridge Analytica.
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