Facebook and Business Ethics: Five Questions to Ponder

By Todd Bacile, Ph.D. | January 21, 2014

Five Ethics Questions about the Social Giant

Ethical business practices are imperative for today’s business leaders. So, how does our social media giant, Facebook, fare in the ethics department? Let’s examine these five questions to find out.

#1: What am I agreeing to in Facebook’s user agreement?

Facebook

For the users of Facebook’s mobile app you should know the following. First, Facebook can monitor you by microphone at any time. Second, Facebook has the right to take videos and pictures using the phone’s camera at any time without permission. Third, Facebook has the right to read your phone’s call log and capture data about your contacts, such as the frequency you have called, emailed or communicated with each.

Mobile aside, the Facebook user agreement at one time or another has stated things such as Facebook does not guarantee that its site is safe or secure; Facebook owns a worldwide licensing right to any content you share; and Facebook may use your name or images in ads.

#2: Will Facebook use my likeness in advertisements without my explicit permission?

Starbucks Sponsored Story ExampleBuilding on that last point, Sponsored Stories was one of several types of Facebook’s advertising models. The engagement rate with these types of ads outperformed competing models. Why? Because your friends and family members were depicted in an ad-like format as if they were promoting certain products.

By the way: your friends and family members often had no idea Facebook was using their name and / or image in association with product promotion. Of course this led to lawsuits against Facebook. Legal pressure “persuaded” Facebook to discontinue Sponsored Stories. Yet, one must wonder if these types of ads will resurface at a later date.

#3: Have we seen the last of our deceased friends and relatives used in Facebook’s advertisements?

Facebook and Deceased UsersI’ve written before about Facebook “accidentally” using deceased persons in ads such as Sponsored Stories. How could this happen you may ask? Well, a friend/family member with a Facebook profile dies. It is not uncommon for people to post positive messages and tag the deceased in posts/pictures for peace of mind and a type of memorial. Facebook’s algorithms would notice increased engagement surrounding the deceased’s user account.

And like any advertiser, if someone is influential, popular, or being talked about then an effort must be made to promote products associated with that person. Sure enough, Facebook would serve up Sponsored Stories featuring the deceased to friends and families. Facebook claims it did not serve up these ads on purpose; and it has since tweaked its algorithms to prevent this from recurring.

#4: How private are my “private” messages sent to other Facebook users?

Facebook’s algorithms read your private messages that you send to other Facebook users. Facebook claims it does so to detect criminal behavior. Oddly enough, though, if you send a private message which includes a hyperlink, Facebook may automatically assign a “Like” for the hyperlinked page! It makes you wonder what else is happening to your so-called “private” messages.

#5: Will Facebook crack down on fake “Likes”?

Facebook LikesItem #4 points to another problem: “Like” Fraud. There are two distinct fraud activities happening on Facebook. The first is “Like” scams. This occurs when a page posts provocative images or offers prizes in an effort to gain a lot of likes. The owner of the page then attempts to sell the page to a third-party.

Why? It takes time and effort to build a social following. Some unscrupulous companies want to avoid the work and simply buy a page with a “following”. In fact, there are online markets to facilitate such sales. At the time of this writing, it appears the asking price of a Facebook page with 42,000 likes is $50!

The second type of like fraud is when a page decides to purchase likes in bulk. The practice of buying a large following has been popular on Twitter for years. Well, it is also happening on Facebook. One reason is that a like count is a vanity metric. It looks nice to have a larger following, but there is a debate as to what likes actually mean.

To its credit, Facebook has claimed it is cracking down on all fraudulent “Like” activities.

Ethical Social Media?

These five questions and answers raise serious concerns about ethical business practices used at Facebook. Many consumers are skeptical that their information and privacy are safe within Facebook’s servers. Facebook is the king of social media at the moment, but this may change as social technologies progress and consumers are presented with other social networking options.

Dr. Todd Bacile (@toddbacile) is a Marketing Professor at Loyola University New Orleans and holds a Ph.D. in Marketing from Florida State University. Social Media Marketing Magazine ranks him as one of the Top 100 Marketing Professors on Twitter. Have a question or comment? Post it here and you will receive a response.

Has Facebook Heard of ‘Corporate Social Responsibility’?

By Dr. Todd Bacile | September 30, 2013

Facebook & Corporate Social Responsibility

Todd Bacile's Marketing Blog - Facebook and Corporate Social ResponsibilityFor such a young company, Facebook already has created numerous debates about its ethical / legal use of consumers’ information and questionable business decisions. Today’s businesses are expected to maintain a certain level of corporate social responsibility (CSR), defined as a company being responsible for its actions – socially, ethically, and environmentally. CSR often captures headlines in the environmental context. But, it is the ethical context where Facebook skates on the proverbial thin ice.

It seems there is a fine line between a firm being innovative versus unethical. On the one hand, Facebook has continued to push the envelope to develop technologies and a marketing platform never before possible. On the other hand, the push toward new and innovative technologies at times borders on invasive or illegal behavior. The following is a brief list of some of Facebook’s marketing / managerial debacles and legal challenges.

Beacon

The first ad platform Facebook created was called Beacon, which was quickly shut down due to the illegal use of users’ private information. Beacon transmitted data from external websites to Facebook in an effort to create targeted ads. Beacon also made updates in users’ news feeds to announce certain purchase activities. The unethical angle was that Beacon was publishing users’ private information without explicit consent. Ultimately, the courts forced the termination of Beacon and made Facebook cough up a $9.5 million settlement.

The class action lawsuit (Lane v. Facebook) was born from the following sympathetic tale: Sean Lane purchased an engagement ring on Overstock.com. Unbeknownst to Lane, Overstock was one of 44 firms participating in the Beacon system. As soon as Lane bought the ring, Beacon sent purchase data to Facebook, where the social giant then posted a status update of the purchase details in Lane’s profile! Lane began receiving congratulatory wall posts from friends. The only problem was that he had yet to pop the question. Awkward! And illegal according to the courts.

Sponsored Stories

Facebook Sponsored Stories ExampleThis is how Sponsored Stories worked: a user ‘Liked’ a brand, which then enabled the brand to create an ad-like proposition to that user’s Facebook friends. The ad-like template featured the user’s name and image; and looked as if the user was recommending the brand to friends. This design was an attempt to feature an ad that appeared to be organic consumer support (because consumers hate, distrust, and ignore most ads). There was the problem: users claimed Facebook used their likeness to “trick” friends with an ad – without explicitly telling the user.

Taking this a step further, Facebook allows minors to create a profile and use the social network. Facebook’s Sponsored Stories came under attack when some parents began seeing their minor children ‘Liking’ various companies or products, then seeing their child’s name and image used in the ads to target friends. Facebook was forced to kill Sponsored Stories due to consumer backlash and legal pressures: the courts ordered a $20 million settlement.

Postmortem Profiles

Question: what happens to your Facebook account, images, videos, and content when you die? A possible answer: Facebook maintains it status quo of using a person’s information in advertisements. People actually have seen Sponsored Stories featuring a deceased friend. Really.

Then there is the story of Karen Williams and her deceased son. Williams fortunately had her son’s Facebook user name and password. She wanted to review his photos and messages to friends. However, when Williams contacted Facebook to ask that the deceased’s profile be left open, Facebook administrators immediately changed the password and locked her out of the account. The reason: Facebook was concerned about user privacy. Williams pursued and received a court order to allow her access to her son’s account.

These stories have amplified the debate of who owns a person’s digital assets upon death. Facebook has claimed that such instances were accidental; and has since created a memorialized state option. Accidental or not, new legislation is attempting to address postmortem profile access and ownership.

Facebook’s IPO

Facebook IPOFacebook has been under the microscope for allegedly misleading investors prior to its initial public offering. A class action lawsuit claims Facebook execs purposely inflated growth forecasts in an effort to manipulate the IPO stock price upward. More than 40 lawsuits have been filed by investors regarding the IPO.

Gee whiz… whether it is marketing programs, privacy issues, or managerial decisions on finance, Facebook appears to have a history of turning a blind-eye to anyone and everyone in pursuit of its own corporate goals. And that, my friends, is the antithesis of corporate social responsibility.

Dr. Todd Bacile (@toddbacile) is a Marketing Professor at Loyola University New Orleans and holds a Ph.D. in Marketing from Florida State University. Social Media Marketing Magazine ranks him as one of the Top 100 Marketing Professors on Twitter. Have a question or comment? Post it here and you will receive a response.

Facebook News Feed for Small Business Owners

By Rickey Helsel & Dr. Todd Bacile | August 6, 2013

How-To-Become-More-Visble-On-Facebooks-NewsFeed_fw_

How do I get my posts to show up in my Facebook audience’s news feeds?” It’s a question that is often asked by many small business owners. The following is a simple and concise explanation that the non-technical business person should understand.

The first step to optimizing your social media content is recognizing that Facebook is also a business. Facebook stays in business by keeping users engaged. And its success is attributed to the EdgeRank algorithm.

What is EdgeRank?

EdgeRank is a formula that Facebook uses to predict which posts a particular user (i.e. your customer) would like to see in their news feed. All of the components of this proprietary formula are not made public; however, we do know that it contains three main variables:

  • Affinity
  • Weight
  • Time Decay

Focusing your content creation in these three areas will optimize your posts to appear more often in news feeds.

Affinity – Who posted it?

An affinity score is Facebook’s numerical value assigned to how much a user likes your brand’s page. Affinity is unique for every relationship. For example, the affinity score between Johnny and your Facebook page is different from the affinity score between Sally and your Facebook page.

Affinity is important because it is tied to engagement. Facebook measures engagement (and thus affinity) through actions such as:

  • Clicks
  • Likes
  • Comments
  • Wall posts
  • Shares

Actions requiring more effort result in a higher level of affinity between the customer and your brand’s page. For example, a “like” is valued less than a comment on a post, because typing a message requires more effort than simply clicking “like”.

Brands stimulate engagement by asking customers to act upon posts on the brand page as a means of increasing the customer’s affinity score with the brand. Asking questions, asking for comments, requesting pictures to be posted, and asking people to like a wall post are all popular calls to action used by brands. Taking this one step further, creative brands build contests or promotions around these engagement activities.

Weight – What kind of post is it?

Different types of posts are weighted higher, and therefore have a better chance to appear in a news feed. Posting videos, photos, and links are reportedly the heaviest in weight.

Also of relevance to engagement is that Facebook users vary in which types of posts they prefer to engage. Some of your customers may prefer text, while others may prefer pictures. It is important to spend time analyzing your Facebook Insights to see which post type is most popular before tailoring your content.

As a general rule, post type variety is important. If you see that your users engage pictures more, it isn’t wise to only post pictures. Solely posting pictures alienates those who prefer to engage text or video. Find the right post type balance based on Insights.

Time Decay – How old is the post?

Think of Facebook posts as potato chips: new chips are crispy and fresh, while old chips grow stale. Facebook keeps our news feeds “fresh” by adding the element of Time Decay, which is simply a fraction of 1/X. As the age of a post grows, so does the denominator (X), which results in a smaller value.

The strategy for time decay is simple: post often (but not too often as to be a nuisance). The more fresh, quality content you put out there, the better your chances are of appearing in your audience’s news feed.

Rickey Helsel (@rickeyhelsel) is a rising new media star, with experience in mobile application development, social media advertising, electronic marketing business plan development, numerous programming languages, and management information systems. Find out more about him at RickeyHelsel.com. Todd Bacile (@toddbacile) is a Marketing Professor at Loyola University New Orleans, where he teaches Electronic Marketing and Advanced Marketing Strategy. Social Media Marketing Magazine ranks him as one of the Top 100 Marketing Professors on Twitter.