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Archived in Facebook continues to be an untapped goldmine struggling to extract cash from its users. People love the service, but aren’t prepared to pay for it.
So advertising remains Facebook’s main source of income. But in its rush to deliver targeted, contextual ads using its members’ data, Facebook needs to be careful it doesn’t upset its users in the process.
And it’s not just its own advertising Facebook needs to be concerned about.
People consider personal data private
It’s no secret that whenever you take part in a quiz or download an app you’re handing over your personal information, and that of your friends, to Facebook’s third party developers.
What they then do with your info is anyone’s guess. But it’s unlikely they create quizzes and apps for your entertainment when there’s money to be made.
In fact, it’s predicted that Facebook’s developer community could soon be earning more than the site itself. It’s estimated this year they could pocket a combined $300-$500 million from sales of virtual goods (e.g. tommy guns in Mafia Wars and poker chips), branded sponsorship and, of course, advertising.
The problem is that some of these developers are misusing people’s personal information. And Facebook needs to step in before the abuse gets out of hand.
Misusing customer data will lose their trust
Facebook is already facing a spate of privacy lawsuits, cases of applications recording people’s login details and a man seeing his wife advertised as a ‘hot single’. And recently a number of applications had to be suspended for flouting Facebook’s user privacy policy.
So Facebook does, indeed, appear to be at a crossroads: it can either start doing more to protect how its members’ data is used or risk losing their trust and loyalty. You only have to look at the demise of Friends Reunited and falling popularity of MySpace to know how quickly fickle online crowds can move onto the next big thing.
Last week, Facebook announced it would be making some changes to give its users more control over their data. In the future, developers will have to specify what information their applications need to use and users will also be able to block applications from scraping their friends’ profiles.
But it will take at least a year before these changes come into effect. So Facebook will be hoping that, in the meantime, there aren’t more cases of people’s private data being misused. Or there might be a rush of its members logging out for good.
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BDA (Buckingham Design Associates) blog – real people giving real opinions, and a complete lack of agency waffle. BDA deliver an exciting blend of design and creative marketing for the Oxford, Milton Keynes, Northampton and London region.
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