Facebook Ads to Lose Even More Data as FTC Mulls Fines?

Facebook ads are notorious for their data-backed ability to target consumers one-on-one. But in the wake of its Cambridge Analytica scandal, the social media giant that’s been cutting back on its use of third-party data is about to get slammed for its privacy practices. Possibly again and again. Will this mean Facebook pulls back even more on data use for ad targeting?

For advertisers who’ve been investing more and more in social media ads, Facebook is the king of the hill. But it’s an unethical king that may get hefty fines from the FTC for its data practices, The Washington Post reported on Friday. The fine for Facebook allowing Cambridge Analytica to mine data of millions of the social media network’s users without their consent appears to be on hold during the furlough of government workers, including the FTC, but will likely beat Google’s $22.5 million fine in 2012, reports the Post.

The Post reports that the FTC could levy the fine regarding Cambridge Analytica if Facebook violated an agreement with the agency:

“The agreement requires Facebook to notify users, and seek their permission, before data is shared with third parties in a way that differs from existing privacy settings. The legally binding order also mandates that Facebook obtain users' affirmative permission before sharing their data with third parties, and requires the tech giant to tell the FTC in cases where others misuse that information. It prohibits Facebook from making deceptive statements about its privacy practices and institute outside checkups on the way it uses data.”

But Facebook may be continuing to violate user trust, reports the Post. The violations may be in the form of Facebook’s data-sharing practices with “smartphone and TV device-makers, banks and other major businesses and a full roster of third-party apps.”

Compounding that issue are companies like Netflix and Amazon, which The New York Times reported on Friday may be providing marketers with Facebook user data without the users’ consent.

So even if the FTC doesn’t issue Facebook a mammoth fine from the meeting it held last month about Cambridge Analytica, it could do so if it finds other violations.

This is perhaps why Facebook cut off third-party data for Facebook ads on Oct. 1 and was instituting enough safeguards to lower its earnings below expectations in July. But that may not be enough to avoid fines for past actions, if the Post and the Times are correct.

However, the Times did note that the FTC commissioners are mainly Trump appointees. And it’s also worth noting that the Trump campaign heavily benefited from Facebook ads and audience targeting. Campaigners targeted voters in areas where the Electoral College would provide a victory.

Meanwhile, for marketers trying to find a way to target ads to consumers in an ethical way, this foreshadowing from the Times means Amazon may not provide them with that experience, either. Also, the Times reported on Sunday that marketers are using Amazon to target consumers based on their interests in more oblique ways than “you bought this chainsaw, here’s a lawnmower.”

The Sunday article in the Times explains:

Last year, Amazon released a tool similar to those used by some other ad networks. That tool embeds a piece of computer code known as a pixel in ads shown on other sites, and tracks how that particular ad placement leads to customers viewing a product on Amazon or buying it outright.

“They want more branding dollars, those TV dollars; that is really part of the reason they launched that advertising attribution data,” said Melissa Burdick, who worked on Amazon’s ad teams before leaving to found Pacvue, which provides tools for brands to optimize Amazon ads.

Is content marketing going to gain even more prominence after this? And will there be more California-like data privacy laws emulating GDPR?

What do you think, marketers?

Please respond in the comments section below.