According to a recent Wall Street Journal article, Facebook does not expect its latest controversy to negatively impact company revenues.
Over the last month, Facebook representatives have struggled to restore the brand's public image after reports surfaced of egregious data mismanagement that allegedly influenced the U.S. presidential election and threatened millions of users' privacy online.
HoustonPublicMedia.org
According to the social media giant, the incriminating reports have not resulted in most users making changes to their privacy settings. Facebook has taken steps in the last months which allow its users to limit what information advertisers can see, but few users have changed the way they consume social media.
Another hurdle for the Facebook will take the form of new legislation. The Cambridge Analytica debacle has moved legislators to begin working on a new series of privacy laws that aim at protecting consumers and limiting the ability of foreign nationals to influence the United States' democratic process.
Despite possible legislation limiting Facebook's use of data, Carolyn Everson, Facebook's VP of global marketing solutions, does not expect any "major changes to [Facebook's] overall revenue and business model," (Everson). It is likely that Facebook's seemingly cavalier attitude about data abuse is part of a carefully planned PR strategy, but Facebook would be unwise to be blind to the potential effect of their trustworthiness on user behavior.
nbcnews.com
To better understand the possible effects of Facebook's latest controversy, it is useful to perform a situation analysis and explore context from a marketing perspective. External environment, or context, can be viewed from a variety of perspectives: namely, social-cultural, political-legal, technological, and economic. The economic lens is least useful here, as the overall performance of the market is unlikely to change the way individuals consume social media; however, the remaining three perspectives offer a great deal of insight into how continued controversy over data might affect public opinion and in turn, Facebook's ability to sell advertisements.
Social-Cultural
Social-Cultural environment refers to the values, beliefs, and lifestyles of a community. The infamous "court of public opinion" falls under the parameter of the social-cultural environment. While it is true that users are not changing their behavior in the short term, if Facebook continues to generate negative publicity, it is likely that it will become increasingly unpopular in the upcoming years. Users will likely rely more on other social media applications, like Instagram or Snapchat, and use Facebook to a lesser degree. This will affect Facebook's ability to sell ads, putting the company at a comparative disadvantage.
Political-Legal
The threat of strict legislation falls under the umbrella of the political-legal aspect of the macro environment. As lawmakers act in the interest of the public and enact privacy-protecting legislation, it is possible that Facebook will have to adjust its business practices.
Technology
This entire controversy is the result of the technological context of the environment. As technology evolves, businesses face previously unseen threats, and if a business lacks the foresight to prevent these threats, it will be viewed unfavorably by the public.
wired.com
Facebook would be wise to consider the macro-environment in which it operates. Facebook is now one of many successful social media brands. In the past, social media consumers had few options, meaning that Facebook could enact unfavorable data and privacy policies with little change in user behavior. Now, with the success of Instagram, Twitter, and Snapchat, users are less likely to tolerate Facebooks poor behavior.
Consumer behavior patterns do not change overnight, but Facebook should be worried. I predict a gradual shift away from Facebook toward other platforms. While revenues are unlikely to be greatly affected this year or even next, Facebook's light is fading and the company's bottom line will likely suffer in years to come.
Consumer behavior patterns do not change overnight, but Facebook should be worried. I predict a gradual shift away from Facebook toward other platforms. While revenues are unlikely to be greatly affected this year or even next, Facebook's light is fading and the company's bottom line will likely suffer in years to come.
WSJ Article:
Facebook Doesn’t Expect Revenue Impact Over Privacy Concerns
Published: April 12, 2018
By Stu Woo and Sam Schechner
No comments:
Post a Comment