Article: 20080301079


HMH Publishing Co., Inc.
Andrew Hultkrans


This past November Facebook founder Mark Zuckerberg (pictured above) regaled an audience of New York City advertis­ing execs with bold visions of a mar­keting revolution. He called it Social Ads, and its battle standard was dis­played on a screen behind him: tar­get EXACTLY THE AUDIENCE YOU WANT.

Barely out of the Clearasil demo­graphic at the age of 23, Zuckerberg made the type of paradigm-smashing

claims familiar to any­one who has attended a Silicon Valley launch. Before Facebook Social Ads, he implied, mar­keters were hapless Cro-Magnons, blindly rooting around in dark­ened caves for a stray piece of flint. Now they

would be advanced anthropologists, surfing Facebook's "social graph," as he put it, receiving "trusted refer­rals" from Facebook users and gain­ing "valuable metrics"—"the exact mind share" their brand is getting, no less—in the form of "data on activity, fan demographics, ad per­formance and trends."

"This is some really powerful stuff," Zuckerberg said, "and nothing

like this has ever been seen before." What a difference a month makes on the Internet. By December Zuck-erberg and Facebook were reeling after a barrage of editorials, blog rants, a 70,000-strong petition and the cybersleuthing of Stefan Berteau, a Computer Asso­ciates antispyware researcher—all objecting to the deceptive privacy violations of Beacon, a crucial sub­set of the Social Ads platform.

Beacon was designed to track and report to Facebook the activi­ties of its members on 44 third-party partner websites, including those of Sony, Block­buster, eBay and The New York Times. If users did not notice or prop-

erly click a briefly Hashed opt-out window on the third-party site or on Facebook, their activities—from making a purchase to writing a review—were automatically broad­cast to their entire Facebook friends network through the already con­troversial News Feed feature, which had previously transmitted only internal Facebook information. The ostensible "trusted referral"

of products between users that Zuck-erberg touted in November actually led to the outing of surprise holiday gifts to their intended recipients, one annoyance that sparked the anti-Beacon insurgency.

On November 29, just days after Facebook sought to quell the rebel­lion by making it easier for users to block third-party-site activities from being trumpeted on their News Feeds, Berteau, whose coding exper­tise allowed him to get under Bea-

con's hood, posted his expose on the Computer Associates Security Advisor blog. Among his findings: All activity data on Beacon partner sites were secretly sent back to Facebook. It didn't matter if the user had blocked the News Feed broadcast option, was logged in to Facebook or had logged off. It didn't even matter if the user had never heard of, seen or used Facebook. In all cases but those of logged-in Face­book members (whose activities were linked to their Facebook ID), the user's IP address was attached to the activity log and sent to Facebook's serv­ers. Valuable metrics, indeed. So valuable—and potentially explosive—that Facebook's vice president of market­ing and operations, Chamath Palihapitiya, was caught deny­ing they existed in a New York Times interview posted on the paper's website the same day: "Q: If I buy tickets on Fan­dango and decline to publish the purchase to my friends on Facebook, does Facebook still receive the information about my purchase? A: Absolutely not. One of the things we are still trying to do is dispel a lot of misinformation that is being propagated unnecessarily."

In these dark days of Dana Perino, such lies are to be expected. What is surprising is

the wounded response of many loyal Facebook members who—having spent months posting their most per­sonal thoughts, pictures and details on their profile—naively believed Facebook was private and the Mark Zuckerbergs of this world have altru­istic motives when creating social-networking sites.

One of the sadder quotes appeared in a December 6 New York Times piece by Louise Story: "I feel like my trust

in Facebook has been violated. Face-book created this space that was a private space, where we share our experiences, and to share this data behind our backs is upsetting." That was from Christopher Lynn, a 30-year-old Facebook user who, as a social-media blogger, should know better. This statement (and many sim­ilar ones throughout the blogosphere) gives the lie to the widespread notion that Generation Y doesn't care about privacy and hence neither should

oldsters. The Beacon debacle points out the more disturbing truth that many users may not understand pri­vacy until it's too late.

Kids who have grown up with the web, establishing and maintaining identities on virtual (usually com­mercial) communities, grasp privacy violations only in their most extreme, subjectively offensive forms. They never think to question the underly­ing architecture of a system designed

to seduce them into revealing more about themselves in the service of microtargeted advertising of the sort Beacon promised its partners.

While navigating the new cyber-utopia of user-generated content, Me Media and Web 2.0, it's useful to look over one's shoulder. It doesn't take a rocket scientist to figure out this stuff or determine where it's going. The web is many wonderful things, but more than anything it is a demographer's paradise, an adver-

User s matrix.

The resurgence of the Inter­net economy, so deflated after the late-1990s bubble burst, has been due primarily to the huge growth potential of behaviorally targeted advertising. It's a para-economy that generates money out of nothing, really, just the gathering of personal informa­tion for marketing purposes and the increasingly accurate verifi­cation of page views and click-throughs. Facebook, for all its seductive utility, has this, and only this, as its business model.

If you don't believe me, ask the experts: "The future of online advertising will be about enabling an extreme targeting that incorporates identity, top­ics and stated interests from consumers to serve ads," writes Rohit Bhargava, vice president of interactive marketing at Ogilvy Public Relations World­wide. "Brands will no longer buy millions of impressions; they will buy 100 messages targeted to exactly the right people. Customers, in turn, will stop seeing these ads as a nuisance and appreciate the value they offer because they are tailored correctly and are relevant. Of course, this vision of online advertising and social networks happily coexisting will take time. The good news is there are signs all around us that we are well on our way."

Yes, it will take time. Zuckerberg went first and led with his chin. On December 5, because of the outcry over Beacon, Facebook apologized and said it would allow users to opt out of elements of Beacon or turn it off entirely. This is mildly encourag­ing. But similar programs will be back, most likely from sites you trust and find indispensable. In the meantime, watch what you share online. You're giving away more than you know.



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