Industry analysis: Zuckerberg faces Congress

There are a number of points that need to be addressed in the testimony of Mark Zuckerberg, with potentially the most significant one being the statement that he does not “feel like” Facebook has a monopoly. The conversation at every event this year and last has often centred on the threats of the duopoly, bringing his claim into doubt.

Interestingly, just this week the House of Lords has concluded in their enquiry that the duopoly of Facebook and Google must come under greater scrutiny. They are also recommending an investigation into whether the current market is working for consumers and competitors. In the wake of the Cambridge Analytica scandal, it would seem safe to say that privacy controls, or lack of them are most definitely not working for consumer

As for the advertisers, they are needing to renew their confidence in the wake of countless transparency issues, so tighter controls will no doubt be welcomed, and Facebook needs to work hard to reinstate trust for both advertisers and consumers.

The secrets of all digital media are coming to light – not just Facebook. With GDPR just a few weeks away, many of the issues raised by the Cambridge Analytica scandal should remind us what good data usage looks like: contextual, consensual, and creative.

Good media practice will ultimately ensure GDPR is a positive opportunity, not something for brands or agencies to fear.

However, for the likes of Facebook, a deep, meaningful shift needs to take place if its future is to be a profitable one and remain a key channel for brands.

Zuckerberg needs to listen to his own rhetoric on connecting people – connecting to consumers is fundamentally what brands expect from his platform.

The future of Facebook is still secure. The vast number of daily active users is still strong. However, with heightened awareness of the issues, individual users, influential persons and companies have become wary.

If the trend of deleting accounts continues, advertisers could face difficulties with targeting relevant users on the same scale as they have done previously. Advertisers may see an increase in cost metrics and will become reliant on new techniques and strategies to maintain continued performance. There will be a learning curve.

Media agencies will continue to use Facebook and optimise for performance. Monitoring the wider implications, including other platforms, will be important to achieve continued results for brands. But it could be several months before we see if there is any significant change.

As the internet yesterday filled with memes criticising both the awkward appearance of Zuckerberg, and the inane questions some of the senators asked him – for instance, how can Facebook “sustain a business model in which users don’t pay for your service?” – there was a problem underlying the humour. It is impossible to police something that you do not understand, and Facebook is a clear example of how a lack of regulation makes it easy to turn a blind eye to bad practice.

With GDPR about to kick in, however, transparency will become a must for companies globally – as any business holding data on a European citizen must be compliant. As pressure mounts on all forms of advertising to be open about how data is used, it becomes clearer that many adults in the UK and US do not know how social media works, let alone social media advertising.

This is why we work to ensure the influencers we work with are transparent when they are posting ads; people otherwise often won’t know. With more typical social media advertising however, while users may know it’s an ad, they may not know that Facebook pools data on their behaviour across all the platforms it owns (such as Instagram), then sells advertising to the brands that want to target them because of those behaviours.

Harmless on its own, this only becomes a problem when how that data is used, and who it’s sold to, is hidden.

The real question, though, is whether a the actions of a giant like Facebook can ever really be controlled when many members of government, in the UK and US alike, don’t even understand the basics of how modern social media works.