Wiesbaden, March 5th, 2015 – On 30 January 2015, Facebook has changed its terms of use again. Now Facebook is storing the data that users leave behind on pages outside of Facebook as well. For example, locations reveal where the user is at the moment and may be more frequently linked to targeted advertising. Almost simultaneously, the German Federal Government has opened its own Facebook profile. With messages and short films, it gives its take on things while offering citizens a platform for criticism.
Martin Kuppinger, Principal Analyst and founder of KuppinerCole casts a critical eye on this step by the Federal Government: "While, on one hand, the Federal Minister of Justice, Heiko Maas, is backing up consumer organizations with their warnings of Facebook, the Federal Government has taken the first step in setting up its own Facebook presence at the same time."
With the changes in the terms of use, Facebook has massively expanded its ability to analyze the data of its users. It is true that users now have better controls to manage their privacy, but the bottom line is that Facebook can collect even more data in a difficult to control manner. "Users do not know which data is being collected or how it is being used," Federal Minister of Justice Maas also notes.
According to Kuppinger, the Federal Government is ensuring that Facebook is, for example, indirectly receiving information on users' political interests and preferences via their Facebook profiles. Since it is not clear just how this information could be used today or in the future, it is a questionable step. With the additional information that will be available via the Federal Government's Facebook profile, for example, interest groups can, in the future, selectively advertise on Facebook. Here it is apparent that the implications of business Facebook profiles are frequently not understood. The value of Facebook fans is often overrated - these are not customers, not leads and NOT voters, but at best people with a vague interest.
The Facebook business model consists of monetizing information such as: who is interested in my products, my political opinions (and which ones) or in my other statements on Facebook? - even more than before with the new terms. For a company, this means that the information is also available to the competition. You could also say: Facebook is the best possibility of informing competitors about a company's (more or less interested) followers.
According to Martin Kuppinger, "in marketing, but also in politics, one should understand this correlation and weigh whether it is worth paying the implicit price for the added value in the form of data that is interesting to competitors".
Martin Kuppinger recommends that end users look closely at the new privacy settings and limit them as much as possible if they intend to stay on Facebook. The Federal Government should in any case be advised to consider the actual benefits of its Facebook presence. 50,000 followers are not 50,000 voters by any means. The Federal Government should also be clear about the contradiction between its claim to strong data protection rules and its actions: "To go to Facebook now is not even fashionable any more – it is plainly the wrong step at the wrong time".
Marketing managers in companies should also exactly analyze what price they are paying for the anticipated added value of a Facebook profile - one often pays more while the actual benefits are much less. A Facebook profile can definitely have its uses. But one should always check carefully whether there is truly added value.
You can find the complete article by Martin Kuppinger here.
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