Business Unusual

It's called the web. Is it any surprise we got caught in it?

Facebook will pay $5 billion to the Federal Trade Commission for privacy breaches since 2012. It is the largest fine issued by the century-old department created to protect consumers.

If the fine was a JSE listed company it would be in the top-30.

Yet the fine is less than a third of the revenue Facebook received in their latest quarter (Q2 2019).

Besides the fine, Facebook will need to comply with new rules about how privacy is managed in the company. It is a good step but critics argue it does not go far enough.

The fine was announced on the same day as the release of a documentary on the Cambridge Analytica scandal involving Facebook and the harvesting of user data that reportedly allowed political parties to manipulate elections. The Great Hack illustrates what might be possible when harvesting data about you, your behaviour and personality hidden as a game is combined with advertising that has been weaponised.

You should not be surprised. Propaganda works. Advertising is propaganda with rules. The more inclined you are to agree with a message the more it will affect you.

If you see enough information that contradicts or questions the truth, you may be inclined to doubt it too.

The allegations are that certain groups abused the system to affect the outcome of the Brexit referendum, the 2016 US elections and many other elections and polls around the world.

Some were done by parties, others by governments wanting to create distrust and some were simply done to earn a quick buck. All used the platforms of the world’s largest social media network - Facebook.

The documentary is good for understanding how the house of cards was built and who the players are. The investigations are ongoing so if you have forgotten what happened it is a good recap.

The issue is not only a mighty platform and bad actors although they are the ones that should be held liable.

We have some responsibility as consumers for falling behind in determining what is news, opinion and advertising.

Publishers and media houses need to take responsibility for enabling the business models that can undermine the news and advertisers need to accept that they were willing to pay to use a system they knew was not working the way it should.

If it is broken can it be fixed and who will fix it?

When the web was created it was intended to allow for the free sharing of information. It was built by scientists who wanted to make it easy to share, research and collaborate. It was fine in the beginning but as the number of users grew some were less concerned with the free distribution of information and keen to make some money.

In the end, the web is as messy and complicated as the real world but with a lot less of the regulations. Hopefully, this is the first step to getting a sheriff to sort the wild web.

Some of the cool start-up companies that had used quotes like “don’t be evil” are now very large companies that mine data as oil companies drill for oil. They did not start off bad and did not intend to become bad, but over time bad practices crept in and no-one made them stop. Facebook, Google, Amazon, Uber, Twitter, Alibaba and many more like the old guard of Apple and Microsoft which are now global companies need to check for bad apples and bad practices by agencies that can hold them to account. Consumers and advertisers need to play their part too and put pressure to call for the companies to operate transparently. If they don’t we should stop using their products. If they are the only ones available; it is too late, we allowed a monopoly to form. Advertisers should move their spending to companies and platforms that want to support responsible advertising.

A powerful advocate for change is the Chief Brand Officer of P&G Marc Pritchard who committed to moving their multi-million ad budgets away from non-transparent media suppliers and agencies.

The shift to online ads promised better ad effectiveness ending the need to use John Wanamaker’s famous quote about advertising when he said: “Half the money I spend on advertising is wasted; the trouble is, I don't know which half.”

Digital advertising promised measurable and targeted ads that would drive the economy of the web. What it did was create some giants like Google and Facebook and a bunch of companies that promised better ways to profile audiences and others that optimised how ads were displayed. Others would confirm the right people saw it and more still worked to counter those that blocked ads. Right now advertisers and publishers may spend more on services to deliver and measure their ads than they pay or get paid for the ad itself.

It is a personal view, but many of the claims are exaggerated and given the promises and the fact that online has overtaken TV for the bulk of ad spend, sales have not rocketed up so rather than knowing which half of your ads work, you are now spending half your budget just getting them to display.

Here is a crazy proposal to try to address the issues with bad ads, toxic content and the erosion of accurate reporting. All companies that accept ads need to be registered as media companies and accept responsibility for all the content on their sites subject to the same rules as the traditional media.

Platforms like social media that offer user-generated content may not accept ads but rather subscriptions or donations to operate.

Wikipedia is one of the top 10 websites in the world and has no ads and is free to use. It does not have multimillionaire CEOs nor a massive stock listing.

The model will not work for everyone, but if you accept that Netflix can charge a monthly fee for movies and Spotify can charge for your music, why not pay for your social media access or your access to forums where you can truly exercise your freedom of expression knowing your payment will take care of creating a great environment for debate rather than simply push from more users to serve ads to or mine for personal information?

It is unlikely to happen because the world is more complex than this, but unless we start pushing for improvements we will get the opposite.

The web is a wonderful place and easily ranks as one of humanity's greatest innovations. Our other smart ideas that transformed society, like agriculture and industrial revolutions, was not all plain sailing. New opportunities create new problems which need new solutions. It is time we started doing just that, hopefully, $5 billion is an investment in cleaning up some of the mess.

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