The Impact that Increased Regulation in the Tech Sector can have on Facebook and its Competitors
Finance professionals in the UK and across the globe will have been keeping their eyes on the ongoing developments at Facebook and assessing the business implications emerging from the aftermath of the Cambridge Analytica furore. Earlier this month, Facebook Founder and Chief Mark Zuckerburg appeared before Congress in the US to discuss his company’s activities […]
Finance professionals in the UK and across the globe will have been keeping their eyes on the ongoing developments at Facebook and assessing the business implications emerging from the aftermath of the Cambridge Analytica furore. Earlier this month, Facebook Founder and Chief Mark Zuckerburg appeared before Congress in the US to discuss his company’s activities and the alleged misuse of personal data. It proved a fascinating glimpse into the inner workings of Facebook and shone a light onto how we, as individuals, are ‘willingly’ sharing our data with platforms. The truth of the matter is, not everyone understands the process and benefits such as data sharing can bring – not just to the technology industry, but a variety of sectors and stakeholders from retail to finance, and to both advertisers and consumers.
Despite the guidelines on sharing third party data that are already in place, the issue has called into question whether the practice requires further regulation so that lawmakers, industry regulators, advertisers, publishers, financiers, brands and consumers alike are clear on how and when it is acceptable to share personal information.
Facebook is in an unusual position where increased regulation in its platform would likely benefit its business. In fact, it has even welcomed closer regulation on social media, and has offered to develop further thoughts on self-regulation. The social media behemoth has the infrastructure to absorb any impact increased regulation would have on its business, but is this true of its competitors?
Publishers such as Facebook have a choice of how they use their own data, but everyone involved in the industry, including financiers, should be striving for transparency, choice and true customer centricity. Increased regulation is there to protect the consumer in the event of malpractice, bad actors or misuse of personal data. This is a unanimously positive move, and those who put their customers first will continue to survive and thrive.
Our world is becoming more and more data-driven. The opportunities to leverage this data are plenty and benefit all parties, but they need to be done in an ethical, privacy-compliant way that assists the customer rather than exploits them. Greater clarity and regulation that focuses on eliminating the latter – and not inhibiting the former – should be welcomed with open arms by all stakeholders.
Facebook has a wealth of personal data that is volunteered by its members – in effect creating the largest identity graph in the world today. Regulation has to ensure that Facebook – as well as any others in the publisher community – is transparent with how that data is collected and used. To this extent, the impact of regulation should be to create a level playing field and promote the democratisation of data.
The challenge comes when advertisers decide where to spend their budgets. Marketers have more choices than ever and can reach consumers in thousands of places online. The use of third-party data both inside and beyond Facebook’s walls is the means to providing that choice. The alternative is for Facebook to monopolise targeted advertising, which would be bad for the industry as a whole.
If advertisers want to allocate their spend across multiple publishers and platforms, it makes sense to be able to leverage standardised data models and apply them everywhere, rather than building custom models across every touch point. LiveRamp enables this neutrality and agnosticism, and provides a secure and privacy compliant connection to any destination platforms an advertiser wishes to use.
Advertisers’ data is one of their most valuable assets, and they need to be comfortable when sharing it with platforms and publishers like Facebook. More stringent regulations concerning personal data can serve to give advertisers the peace of mind that their data is secure, and allow them to confidently demonstrate its ethical use whenever called upon to do so.
This can only work if data providers source and govern their data in ethical, privacy-compliant ways. The best models and experiences draw from multiple ethical data sources working together, all with the best interests of the customer at heart.
Advertisers need to look out for themselves, their customers and their own data. They should seek to adhere to ethical practices and work only exclusively with experienced and ethical partners.
I believe increased regulation has the potential to benefit not only Facebook but also its competitors. Increased transparency in any industry, be it the financial or tech sector, should make it easier for businesses and consumers to connect and interact, unlocking additional value for both. Regulation, if designed and imposed correctly, can help consumers hold greater control of how their data is used while allowing businesses to use it more responsibly and efficiently.