In Facebook advertisers trust? not likely after this fiasco

The events of the past week concerning Facebook are more than a fundamental breach of trust; they mark a watershed moment.

The events of the past week concerning Facebook are more than a fundamental breach of trust; they mark a watershed moment for all in the media that should force, once and for all, a reappraisal of the worth of such digital platforms.

The leak of personal data from Facebook to data firm Cambridge Analytica in Britain and how the information was used will result in embarrassing inquiries — at least for governments — into the way political parties harness data and will ricochet through businesses, ending in a string of legal cases that will test the boundaries of contemporary law.

This is not the first time Facebook — and other digital platforms — has been found lacking. There has been a plethora of inquiries across the world into the social media platform’s activities.

These have shown there is a world of difference between Facebook’s public undertakings and reality, ranging from its policies to stem the flow of “fake news” and claims over its audience reach through to data protection, as evidenced by the Cambridge Analytica debacle.

In this case Facebook has form, with earlier incidences of lax controls over confidential user data. These resulted in undertakings to the US Federal Trade Commission in 2011 that the platform would honour the privacy settings it had set up to restrict access to personal data. Well, we can see how that ended up. New data protection policies have been put forward, but it is still to be seen how they will be enforced.

For consumers, it must force a reappraisal of the large lumps of personal data they share on the site, from a simple “like” to more in-depth observations. For advertisers, it must reinforce the need for a recalibration of the value of appearing on a platform that cannot be trusted in its content and data activities.

The growing doubts over digital platforms have initiated a shift from the appeal of vast audience numbers (sadly, also greatly inflated) on social and search platforms to trusted news brands.

This has been supported by international and Australian studies. The concept is simple: there is a direct correlation between trusted content and trust in ads that appear with it. It is good news for trusted news media brands and is reinforced each time platforms such as Facebook implode.

The data breach story was broken last week through an investigation by established news media brands in Britain, in this case The Guardian and The Observer, with the support of Channel 4.

As a story, it takes some beating. The investigation uncovered a leak of supposedly sacrosanct personal user data of 50 million to 60 million Facebook users to Cambridge which, despite denials, used the data in political campaigning for Donald Trump and Brexit. Facebook founder Mark Zuckerberg and others have on record as saying “protecting people’s infor­mation is at the heart of everything we do”. If that is the case, it is clear something is not working at the heart of Facebook.

And what does Facebook do? It is a megalith of a company, turning over more than $US40 billion ($51.8bn) a year. It makes money selling data to advertisers.

Advertisers have flocked to it in droves, no doubt secure in the knowledge that Facebook users trust Facebook and advertisers can leverage that trust to sell goods and services. How wrong they have been.

Last year, NewsMediaWorks commissioned a study by Australian research company Galaxy Research into trust in media content and advertising.

Ten media channels were tested including newspapers; digital news media; television; radio; cinema; magazines; outdoor; social; search; and other websites.

More than 2800 Australians aged 18 and older were surveyed and asked to determine to what extent they agreed the ads in the given media adhered to 20 characteristics (honest, credible, useful, likeable, and so on) grouped into four key dimensions: reliability; usefulness; effect; and willingness to rely on.

The study found there was direct correlation between content and advertising, and ultimately demonstrated that ads in news media were most trusted. At the polar opposite end of the scale, and stone motherless last, came social media, dominated by Facebook. Consumers trusted neither the content nor the advertising on the site.

Advertising is about investing in brand development and increasing sales. The key measure is return on investment. Advertisers would extract an excellent ROI from an hour reviewing this study — it is titled The Company You Keep — and another hour reviewing their media plan.

Trust and truth are powerful human motivators. Each year Edelman, the world’s largest public relations firm, publishes the Edelman Trust Barometer, this year named The Battle for Truth. The findings make sober reading, with Australians’ trust in institutions improving minimally.

Globally the study found that “seven in 10 respondents worry about fake news, and 59 per cent say it is getting harder to tell if a piece of news was produced by a respected news organisation”. In this environment media has become less trusted while credibility in journalists rose substantially.

Explaining this paradox, the Edelman study counsels that “most likely, the fall-off of trust in social and search, and of the credibility of peer communication, are contributing to the overall decline of trust in media”.

Last Tuesday, I attended a presentation titled “Targeting Fake News: Data and Democracy in a Post Truth Era”, chaired by Guardian columnist Jonathan Freedland, at Advertising Week Europe. One of the participants in the discussion was Hossein Derakhshan, an author and Harvard researcher, who started by saying that the old word for fake news was lies.

Facebook’s algorithms work to amplify fake news exponentially. They also work to elevate content that users have demonstrated they like to the exclusion of diversity. This gives rise to the “filter bubble” existence that Facebook users come to experience. These same algorithms are being tweaked all the time to the disadvantage of respected news media publishers and of marketers, the same marketers who invest the vast proportion of their advertising resources in Facebook.

Facebook may well be at a pivotal point in its history. By its own estimates user numbers are down, and the time users spend on Facebook is down. These are two more issues advertisers may what to reflect on the next time a recommendation to go long on Facebook slides across their desk.

In stark contrast, readership of news media is strong and trust is high, both issues worthy of consideration by advertisers.

Peter Miller is chief executive of NewsMediaWorks.