IT'S NO SURPRISE FACEBOOK IS SELLING YOUR SECRETS
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 MoveOn.org 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.
IT'S A PARA-ECONOMY THAT GENERATES MONEY BY GATHERING