Political consulting firm Cambridge Analytica - formerly SCL Elections - is no stranger to controversy. And in the latest surprise twist in the story, the company announced its closure on Wednesday, citing “loss of business”. However, investigators have stated that the firm’s closure will not halt the probe into the way Cambridge Analytica handled the data of millions of Facebook users. Damian Collins, chair of the Commons select committee for Digital, Culture, Media and Sport (DCMS) told the BBC, “We've got to make sure this isn't an attempt to run and hide, that these companies are not closing down to try to avoid them being rigorously investigated over the allegations that are being made against them”. Mary Creagh, Labour MP for Wakefield, tweeted: "Outrageous. Insolvency used to cover up illegality".
Data analytics specialist Cambridge Analytica - owned by US billionaire Robert Mercer - stands accused of illegally ‘mining’ the data of millions of Facebook users, in what Mark Zuckerberg has described as a “breach of trust” but is seen by many as a rather more sinister mass violation of their personal data. Either way, the scandal has knocked north of $8bn off Facebook stock in the immediate aftermath, whilst companies including Mozilla and Commerzbank have pulled out of all Facebook advertising, with several more big brands including Unilever and P&G threatening to withdraw if investigations conclude that user data was indeed misused.
It seems likely that Cambridge Analytica employed dubious methods to influence the outcome of both the US election and the EU referendum, using psychological insights provided by Facebook which enabled them to target individual voters..
But were the techniques used by Cambridge Analytica really so different to those used by the digital marketing industry as a whole? Perhaps not. Data harvesting, precision marketing, microtargeting; all these terms describe a similar phenomenon which is used on a daily basis by many digital marketing companies. But what is unsettling about the Cambridge Analytica scandal is both the scope of their reach (their actions have been described as the “weaponizing” of Facebook) and the lack of transparency (they harvested user date for alleged academic research but went on to use it for other means). Put simply, Cambridge Analytica shouldn’t have used the data they acquired in the way that they did.
The Cambridge Analytica scandal has brought to light the need for transparency and trust in the digital marketing industry, and presented an opportunity for forging relationships with users which they understand and which marketers respect. This will certainly be aided by the introduction of GDPR. Added to which, consumers and social media users are now more vigilant than ever of their own privacy and data sharing settings.
What are the take-away points? The digital marketing world need not panic, but we could be in the dawn of a new era; one which embraces transparency, honesty and mutual respect between brands and consumers. And one in which social media users need not simply accept the use of their data as part of a value exchange for using free platforms.
Marketers can benefit from these recent learnings. It’s a new mindset which the most progressive brands can benefit from and limit the risk of damaging their brand. Brands can build better, stronger more trusted relationships with their customers and if they use their data appropriately, in return will also get better results from campaigns.
Founding Director - Digital Marketing Division