How Facebook privacy is being eroded for advertising

Facebook signup continues to grow at exponential rates across the globe. In three months since April 2009, they’ve added another 50 million users If you’re looking for stats on Facebook’s infiltration into individual countries, the CheckFacebook site provides these revealing stats about Australia:

• More than 6 million users
• 36.65% of Australian internet users are on Facebook
• Slightly more females to males
• 18-24 year olds still the largest demographic
• 25-34 year olds second largest demographic

Australian Facebook statistics

With advertisers hungry to target internet users by demographic, Facebook is now busy cashing in on its rich rivers of private data. At the same time as growing the user base exponentially, Facebook globally is heading to make $500 million dollars on advertising in 2009, and are fast tracking their ad APIs.

Allfacebook.com reports:

the API is expected to allow advertisers to calculate expected CPMs and CPCs on advertisements as well as make changes to ads on the fly. Facebook hadn’t let advertisers modify ads until recently but it’s a highly demanded feature especially from those advertisers that are running large ad campaigns.

It’s the 3rd Party APIs that have caused Facebook to serve up a photo of a married woman in a singles ad. A few weeks ago Facebooks privacy policy stated:

Facebook occasionally pairs advertisements with relevant social actions from a user’s friends to create Facebook Ads. Facebook Ads make advertisements more interesting and more tailored to you and your friends. These respect all privacy rules.

Most Facebook users would not know where to change the settings so they don’t turn up in ads. I changed my own privacy settings a couple of weeks ago, but when I went back tonight, this is what greeted me

Privacy pop-up trying to address Facebook photo ad serving issues

The Facebook blog covers the “rumors” of the issue with the 3rd party ad serving, and the Facebook ads privacy policy has been re-written to cover the changes.

Probably not enough transparency about what’s really going on. So what does this mean for users and advertisers?

• Everyone prefers targeted ads that are more relevant to them, but using people’s faces in cheap ads is a big no-no.
• Facebook should admit to misuses of the 3rd party advertising API rather than deny them as “misleading rumours”.
• Facebook is likely to be fast-tracking the advertising API, but at the same time should ensure the advertisers don’t abuse the platform, as they’ve admitted had been done previously.
• Facebook should look after their users. Because their revenue is dependent on the incredibly private and powerful demographic data which enables precise ad targeting, probably not seen since the early days of the web. If users abandon the platform, there goes the revenue.
• Facebook Users need to stay aware of the constant changes to the platform, and read the fine print carefully to make sure they are comfortable with what they are sharing, particularly with their own photos.

The question is whether the sheer size of Facebook’s user base will protect it from any issue. The tell will be whether the rate of signup of new users will slow down, or whether Facebook will continue to take over the world.

Either way, here’s hoping the ad targeting gets better in the long run. There are just so many home liposuction ads I can give the “thumbs down” to.

Update:

• Facebook has addressed the 3rd party ad serving issue with developers on the Facebook developer blog
• The Facebook advertising guidelines page has been updated. The 3rd party loophole that caused the married woman’s photo appearing in the singles ad has been stopped, at least until Facebook approves it:

“Unless authorized by us, your ads may not display user data — such as users’ names or profile photos — whether that data was obtained from Facebook or otherwise.“

Hopefully, the self-policing policy will stop these issues. It’s worth monitoring to see how effective it is.