Facebook Finally Relents After Unabated Criticism Over Privacy Invading Beacon Ads
No doubt, Facebook never anticipated such an uproar.
Faced with its second mass protest by members in its short life span, Facebook, the enormously popular social networking Web site, is reining in some aspects of a controversial new advertising program.
Within the last 10 days, more than 50,000 Facebook members have signed a petition objecting to the new program, which sends messages to users’ friends about what they are buying on Web sites like Travelocity.com, TheKnot.com and Fandango. The members want to be able to opt out of the program completely with one click, but Facebook won’t let them.
Late yesterday the company made an important change, saying that it would not send messages about users’ Internet activities without getting explicit approval each time.
MoveOn.org Civic Action, the political group that set up the online petition, said the move was a positive one.
“Before, if you ignored their warning, they assumed they had your permission” to share information, said Adam Green, a spokesman for the group. “If Facebook were to implement a policy whereby no private purchases on other Web sites were displayed publicly on Facebook without a user’s explicit permission, that would be a step in the right direction.”
Facebook, which is run by Mark Zuckerberg, 23, who created it while an undergraduate at Harvard, has built a highly successful service that is free to its more than 50 million active members. But now the company is trying to figure out how to translate this popularity into profit. Like so many Internet ventures, it is counting heavily on advertising revenue.
The system Facebook introduced this month, called Beacon, is viewed as an important test of online tracking, a popular advertising tactic that usually takes place behind the scenes, where consumers do not notice it. Companies like Google, AOL and Microsoft routinely track where people are going online and send them ads based on the sites they have visited and the searches they have conducted.
But Facebook is taking a far more transparent and personal approach, sending news alerts to users’ friends about the goods and services they buy and view online.
Charlene Li, an analyst at Forrester Research, said she was surprised to find that her purchase of a table on Overstock.com was added to her News Feed, a Facebook feature that broadcasts users’ activities to their friends on the site. She says she did not see an opt-out box.
“Beacon crosses the line to being Big Brother,” she said, “It’s a very, very thin line.”
The article continues.
BusinessWeek’s Catherine Holahan reported earlier on the proposed changes and discussed Facebook’s dilemma:
Any move that weakens Beacon’s appeal to advertisers leaves Facebook under pressure to find other ways to lure marketers and justify the lofty $15 billion valuation bestowed by Microsoft (MSFT) in October, when it purchased a 1.6% stake for $240 million (BusinessWeek.com, 10/25/07). Users of social networks are typically less responsive to standard ad formats, such as the posterlike banner ads commonly seen on the Web, than to newer, more interactive or personalized advertisements. Some marketers say that when they place banner ads on Facebook, the so-called click-through rate, a measure of user responsiveness, is one-fifth the rate for the larger Web.
But many Facebook users insist that they, not marketers, should set the terms of how, and how much of, their information is shared for advertising purposes. Some threatened to move to other social networks or start their own blogs if Facebook takes that decision out of their hands. “I will set up my own blog,” says Flaschen. “It is a little less convenient, but if [Facebook] can’t understand the privacy implications of what they are doing then it’s not worth it.”
While the revamping is encouraging, as Vindu Goel points out, this is a scenario which should never have arisen.
But more troubling is what appears to be Facebook’s emerging business strategy: trample on people’s privacy in the name of enhancing the service, wait for people to scream, then apologize and back off. The company did this when it first launched the news feed feature, which initially had few controls over who could see it. And it’s done it again with Beacon.
Essentially, Facebook is trying to see how much bad behavior it can get away with. That’s not how any company should treat its “friends.”
It certainly belies the original purpose of Facebook which was an online gathering place for friends, with membership restrictions which set it apart from the more public MySpace . How willingly Facebook members themselves choose to surrender privacy — albeit, at times, with lack of foresight and good judgment – is one thing, but to have one’s online life involuntarily serving commercial aims is not acceptable.
Facebook Beacon Ads Continue to Provoke Uproar and Objections
Facebook may have overestimated how acceptable their new Beacon ads would be for members. But it is one thing for members to decide voluntarily to reveal private, personal information and yet something else for Facebook to enable the commercial exploitation of such information. David Utter reports on the backlash:
One-time online darlings in social networking have begun to feel the dizzying dehydration of the morning after a really great party. Pushback from several quarters may leave the typical past college age person questioning the sanity of being on such sites.
Facebook has been in a running battle recently with activist group MoveOn.org over use of the Facebook Beacon. That feature of Facebook posts a note to one’s online profile whenever the individual makes an online purchase at a merchant participating in Beacon.
MoveOn accused Facebook of originally planning to permit people to permanently opt-out of Beacon, but removed that function at the last minute.
“Facebook should explain why they chose at the last minute to put the wish lists of corporate advertisers ahead of the privacy interests of their users,” said MoveOn’s Adam Green.
The article continues. Vindu Goel poses the question: is this business as usual or a disaster that Facebook has on its hands.
Is your life an open book if you use Facebook? It sure seems like it. It’s giving me the heebie-jeebies. I’m working on a column about the topic, and I’d love to know what you think, either via blog comment or email.
The current uproar is over Facebook’s new Beacon application, which gives online retailers the power to tell all you Facebook friends what you just bought through your News Feed. Some of the sites give buyers a short time window to opt out of the information sharing, but users have complained the opt-out feature is barely noticeable.
Liberal activist group MoveOn.org is leading a protest on Facebook against Beacon, and members of the protest group topped 20,000 as of Sunday. (For a good analysis of all the issues, check out Josh Catone’s excellent post at Read/WriteWeb.)
Facebook’s response so far is troubling. Basically, the company says sharing information with your “friends” isn’t broadcasting it to the world, so it’s not really an invasion of privacy.
The article continues. Clearly the exposure the Facebook Beacon ads are receiving is not what the company and its advertisers had hoped for.
MoveOn.org Starts Facebook Group to Protest the Privacy Invasion of Facebook Beacon Ads
Facebook’s Beacon ads have drawn objections and concerns from many circles, including privacy and consumer rights groups, legal experts and Facebook members. Now the grassroots political group, MoveOn.org is protesting.
MoveOn.org is turning its organizing prowess on one of the very tools it uses for its mobilizing efforts. The liberal group’s Civic Action division mounted an effort today against Facebook’s Beacon advertising feature, claiming it infringes user privacy and “sullies” social networking communities.
MoveOn is objecting to a new advertising technique that Facebook announced a few weeks ago that posts members’ purchases and activities on other websites in their Facebook profiles. Users can choose not to have the information posted from individual sites, or “opt out,” whereas with most Facebook applications associated with external sites, users must proactively choose to participate, or “opt in.” With the Beacon feature, if a user does not specifically decline participation, his or her Facebook friends will get a “news feed” notice about the purchase.
In an approach not that unusual on the social networking site, MoveOn has created a Facebook group to protest against Facebook, complete with link to MoveOn’s petition encouraging Facebook to “respect privacy.”
MoveOn is not anti-Facebook. Adam Green, a spokesman for MoveOn Civic Action, said his group is trying to “preserve the integrity” of the site.
“Facebook and similar sites have the potential to really revolutionize how we speak to each other in our society,” Mr. Green said. “When people see their privacy violated, it sullies the entire thing.”
He said MoveOn is worried people will abandon Facebook out of privacy concerns.
However, Chris Kelly, Facebook’s chief privacy officer, said MoveOn is “misstating the way this process works.”
He said the purchase appears only in the news feeds of confirmed friends and on the individual’s profile (users have control over who can see their profiles), not to the “world.” Mr. Kelly also pointed out that two ways to opt out, at the point of purchase on the external Web site, via a box that pops up, but fades away in under a minute and the next time they sign into their accounts. If users ignore the notification, the purchase information will be displayed, but nothing happens until the user signs in.
These issues are discussed in this brief CNN report.
As CNET News.com’s Caroline McCarthy points out, companies who use the new Facebook Beacon ads are not unaware of privacy concerns.
Some retailers participating in Beacon say they’re familiar with its potential pratfalls, but insist that it will ultimately be a positive development. “I think it’s a new technology, and until people get used to it, it might surprise some,” said Josh Mohrer, director of retail for BustedTees.com. “We have had a few instances where people were surprised, not necessarily angry, but surprised that their purchase showed up on their Facebook feed…I think when it becomes ubiquitous, which it most certainly will as Facebook things tend to be, that people will get used to it and see it as a good thing.”
Mohrer said that he saw where the complaints were coming from. “I think Facebook probably needs to do a better job of warning people about it,” he said. “What’s bad is that people are probably going to blame the merchant and not Facebook.”
Additionally, Mohrer admitted that he doesn’t entirely disagree with the concerns of activists who have pointed out potential privacy issues with Beacon. “You should have an option to turn it on,” Mohrer added, “not the other way around, especially around this time of year.”
Despite privacy concerns, some companies anticipate ultimate success with Facebook Beacon Ads. As Prabhala Ranga Sai of TMCnet points out, eBay and Travelocity have major plans.
It seems eBay is planning to use Beacon so that eBay.com sellers will be able to choose to include their eBay listings in their Facebook News Feeds. This opens up a huge market sans geographical boundaries for the businesses. When it happens, eBay.com sellers would be able to drive potential bidders and buyers to their listings. eBay expects to make the feature available to sellers on eBay.com in early 2008.
“Beacon offers an interesting new way for us to deliver on our goal of bringing more bidders and buyers to our sellers’ listings,” said Gary Briggs, senior vice president and chief marketing officer, eBay North America. “In a marketplace where trust and reputation are crucial to success, giving sellers the ability to easily alert their network of friends – the people who already know and trust them – to an item for sale has the potential to be a powerful tool.”
Travelocity implementing Facebook Beacon on its website is an example of one the many success stories of Beacon. When Facebook users book travel on Travelocity, they can choose to share that information with their friends on Facebook.
“Travel is naturally a social activity that travelers enjoy discussing with the people they know,” said Jeff Glueck, chief marketing officer at Travelocity. “Using Beacon, Travelocity users can now easily choose to spread the news of their latest vacation plans on Facebook as a complement to their activities on the Travelocity website.”
It remains to be seen if Facebook members will “cooperate” and “comply.”
Privacy Groups to FTC: MySpace and Facebook Ads Violate Privacy
Privacy groups are voicing concerns.
Two consumer advocacy groups have asked the Federal Trade Commission to investigate whether new advertising initiatives announced last week by social networking sites MySpace and Facebook adequately protect consumer privacy.
In a Nov. 12 letter to FTC Chairman Deborah Platt Majoras, the Center for Digital Democracy and the U.S. Public Interest Research Group claimed that the “ambitious new targeted advertising schemes” launched by MySpace.com and Facebook Inc. “make clear the advertising industry’s intentions to move full-speed ahead without regard to ensuring consumers are protected.”
Jeffrey Chester, founder and executive director of the Center for Digital Democracy, said that by launching the advertising plans, MySpace and Facebook are “thumbing their noses at the FTC and consumer privacy rights” by allowing marketers to customize advertisements based on data provided by users in their profiles on the social networking sites.
“MySpace and Facebook are like the digital data equivalent of Fort Knox for Madison Avenue marketers,” he said. “It is a kind of one-stop data shop for marketers. They know your interests, your politics and what movies you like. It is a much more rich array of content that marketers simply should not have automatic access to.”
Chester said that consumers must be offered a complete opt-out option, and that the social networks must fully disclose how they intend to use their personal information.
New Facebook Ad Network Might Violate Privacy Laws
The ad network Facebook recently announced may not just be invasive and objectionable. It might also be illegal.
Just days after Facebook unveiled plans for a new advertising network that relies on user-provided details about themselves for marketers to target their ads, some legal experts said the system may violate privacy laws.
William McGeveran, association professor of law at the University of Minnesota Law School in Minneapolis, noted in a blog post that the new ad initiative only asks users in general whether they want to share information — not whether they want their name and picture used in an ad for a product. The new Facebook system will serve up so-called Social Ads, which combines actions taken by a users’ friends — like a purchase, review or a service — with an advertiser’s message. These ads will appear in a user’s news feeds as sponsored content or in the ad space on the site, according to Facebook.
Common-law privacy torts, McGeveran said, forbid someone from appropriating the name or likeness of another, and several states — including New York and California — have such laws. New York, for example, forbids the use of a person’s “name, portrait, picture or voice” from being used for advertising purposes without the prior written approval from the person.
“I don’t see how broad general consent to share one’s information translates into the specific written consent necessary for advertisers to use one’s name (and often picture) under this law,” he wrote. “And the introduction of Facebook’s sales pitch about the program to advertisers leaves little doubt that individual users’ identities will be appropriated for the benefit of Facebook and advertisers alike.”
The article continues. On The New York Times’ Bits, Saul Hansell also addresses these issues and quotes the response he received from Facebook’s chief privacy officer:
Another issue that could come up is what sort of consent is required under the law. Facebook, he said, has not explicitly asked users to approve their use in these ads. And the New York State law requires “written consent.”
Mr. McGevran said that while Facebook may have various ways to defend an action, it should follow the practice used by Madison Avenue.
“Standard advertising agencies have routines in place to avoid this problem,” he said. “They always, and I mean always, use stock photos” which are taken of models who consent to be used in ads.
Update: Chris Kelly, the chief privacy officer of Facebook, called to present a number of reasons why he thinks this law doesn’t apply to the new Social Ads. He said Mr. McGeveran’s interpretation of the law was too broad.
Mr. Kelly said the advertisements are simply a “representation” of the action users have taken: choosing to link themselves to a product. He added that in many states, consenting to something online is now seen as the equivalent of written consent.
And he argued that it would be difficult for someone used in one of these ads to object because that person had already chosen to publicly identify themselves with the brand doing the advertising.
“We are fairly confident that our operation is well presented to users and that they can make their own choices about whether they want to affiliate with brands that put up Facebook pages,” Mr. Kelly said.
