Cambridge Analytica scandal helps legacy media rediscover its teeth

The tardiness in responding to the Cambridge Analytica scandal speaks volumes about how serious this is for Facebook.

The world of advertising and media is always changing. That process of change usually takes place gradually, almost imperceptibly. But there are occasional alterations in which major changes occur in one sudden shift. Moments when you realise a corner has been turned or a paradigm has shifted.

We’ve just lived through one of those shifts with the scandal surrounding Cambridge Analytica, Facebook and the role of user data to profile and probably influence millions with targeted communication. It’s a story that has it all: salacious interviews on secret cameras, illegal access to millions of people’s personal data and stunning links to the two biggest global events of recent times: Brexit and Trump.

The tale itself has been extraordinarily well covered by this newspaper and others. So rather than rehash it, let’s explore its implications for the world of media because they are surely significant.

For Facebook, there is now clear and present danger. The long, five-day gap between the Cambridge Analytica scandal breaking and any response from Facebook chief executive Mark Zuckerberg or his usually loquacious chief operating officer, Sheryl Sandberg, speaks volumes about the seriousness of the scandal now engulfing the social media giant. When Zuckerberg finally surfaced late last week he was contrite.

But the truth of the matter is that, with the exception of some of its data access transgressions, Facebook’s role in the whole Cambridge Analytica scandal was very much business as usual. It granted access to the data of its enormous billion-strong user base to a company that mined the data and used it to analyse people’s personalities and desires, and then allowed that same company to use Facebook to target its users with messaging aimed specifically at them. Not much about that process is illegal, that’s Facebook’s standard business model.

Facebook is not simply a free service in which you connect with friends and your community. Yes, you get to do that, but in exchange the information you share, the likes you profess and the friends you make are all collected and marketed to companies. It’s all there in the detailed terms and conditions that every user signed, without reading, when they started using Facebook. People aren’t the users of Facebook, they are the product.

The existential threat for Zuckerberg, and the reason he was so “really sorry” last week, does not stem from the risk of government sanction or advertised reticence. His big concern is his consumers. If his billion-strong users start to realise that every time they interact on Facebook they are being recorded, analysed and sold to the highest bidder, it could change the popularity and longevity of his platform forever.

Most analysts believe that consumers will scratch their heads at the headlines swirling around Facebook but then return to the service and continue their patronage as before. But no one is quite sure. And with a social network where the customer base is, by definition, connected there is a genuine risk that a sudden drop in users could start a domino effect and wipe out the whole platform.

The implications of last week’s events are just as huge for Google. It is no coincidence that just as Facebook was enduring its biggest crisis, Google was rolling out a new media-friendly deal in which the company will pass on up to 95 per cent of the commission from news media subscriptions purchased through Google back to the publishers. Gone is the arrogant attempt to displace the “legacy media”. This is a nicer, more conciliatory Google, and the contrast to Facebook is stark.

Suddenly it has become harder to speak of the “digital duopoly” because the idea of two giant, arrogant and isolated digital companies no longer holds true. Facebook certainly continues to struggle with this characterisation. But Google is moving fast to improve its image and standing with media firms. There is a nascent split emerging with Google presenting itself as the more transparent, co-operative alternative to the dark arts of Facebook. If Google is clever, and it surely is, it is the start of a new direction for its company.

Despite essentially operating the same kind of consumer data business as Facebook, Google is attempting to play nice. And then there are the implications for the traditional or “legacy media”. There was a significant period, between 2010 and 2016, when it appeared that most news and television media companies were facing imminent extinction from Google and Facebook and a host of other smaller digital businesses.

That threat was exacerbated by executives from the traditional media industries who had grown fat and lazy and unable to properly strategise or compete. Forty years of dominance will do that to even the best of us. Initially, they tried to compete with Facebook and Google by evolving their own digital alternatives. While updating their platforms of delivery was an essential move, the idea that these companies could somehow match Facebook or Google for digital prowess was, frankly, ridiculous.

Gradually the world’s media companies have realised that rather than fight a rival with the weapons mastered by its foe, the key to strategic success is to fight with its own, very effective, tools — namely journalism.

For the past two years, newspaper and TV stations have mercilessly attacked Google and Facebook on audience overstatement, on brand safety, on tax avoidance and now on Cambridge Analytica. The great strategic advantage of news media is that it sets the public agenda. Television’s most important strength is its unassailable reach to a giant swath of the population. Combining those two advantages and applying them to a concerted attack on Facebook and Google had already borne fruit. Brand safety drew blood from the digital duopoly but it was a superficial wound.

The Cambridge Analytica scandal and the significant coverage it has been given is a different league of hurt for Facebook. And there is no reason such a strategy cannot continue with other scandals and global exposes to follow.

The legacy media has suddenly rediscovered its teeth and the bite marks are all over Facebook.