The Facebook / Cambridge Analytica scandal is yet another emphatic lesson on how not to deal with serious errors in the business and social media worlds. It has led to the near demise of UK-based Cambridge Analytica and its associated companies and seriously undermined the reputation of the world’s largest social media platform.
I’m sure most readers will be familiar with the complex saga where Cambridge Analytica approached Facebook and successfully negotiated a contract to mine the data of its millions of followers for US $1 million.
The deal involved an app devised by Cambridge Analytica academic Aleksandr Kogan, which invited Facebook users to respond to a ‘psychological profile’ questionnaire. Over 270,000 of the platform’s users responded. The problem was that the initial app was not really a ‘psychological profile’ but a means to obtaining, it is alleged, the data of over 50 million Facebook users that Cambridge then used to win a lucrative contract with the Trump election campaign. They then targeted individuals deemed sympathetic to Trump’s toxic politics with individual ads and propaganda and these were often re-tweeted thousands of times.
A key link between the campaign and Cambridge was Steve Bannon, then Trump’s chief policy advisor (since sacked) who now claims he "doesn’t remember" having the data.
Soon after the deal, individuals at Facebook raised, internally, the possibility of an enormous data breach but this was pushed aside by the organisation’s leadership.
Things came to a head four years later when the Observer, having made contact the former Cambridge Alalytica whistle-blower, published the first story on the scandal on 13 March, this year.
How did Facebook respond?
There is only one word for it - it handled its crisis management BADLY
Despite the fact that suspicions had already been raised internally, Facebook sent letters to the Observer and other news media maintaining the 50 million data leak was not ‘technically’ a breach of ‘trust’ and reminding the respondents that the organisation had the right to sue. The UK Guardian and the New York Times were not intimidated and published further information and the scandal became a media storm.
In Britain the Information Commissioner Elizabeth Denham declared she was “deeply shocked” and obtained legal warrants to raid Cambridge Alanlytica’s HQ. In America the nonpartisan government watchdog Common Cause filed two complaints claiming Cambridge Analytica had breached electoral law.
A coda to this sorry saga came when UK Channel 4 filmed a sting session involving Cambridge bosses boasting about their role in the Trump’s election success. The then CEO, Alexander Nix, was filmed describing how “pretty” Ukrainian girls could be used in honey trap stunts against candidates. He is now suspended.
The storm of outrage has seen a decline of 17% in Facebook shares since 16 March.
Facebook founder and chief Mark Zuckerberg decided it was best to remain silent. On March 25 he did an about face and in full page advertisements in Sunday papers all over the world confessed: “This was a breach of trust and I’m sorry we didn’t do more at the time. We are now making sure this doesn’t happen again.”
The apology was too late to stop 50 billion being wiped off Facebook's value and too late to stop millions of its users deleting their files. The lasting long-term damage to the brand is still to be seen and in Zuckerbergs words could take years to recover from.
There are some useful PR and crisis management lessons to be learned from all of this:
If you have made a mistake apologise immediately.
Zuckerberg’s came 12 days after the first media disclosure and four years after concerns were raised inside the platform.
Cambridge Analytica made no apology until the new COE, Dr Alexander Tayler, released a press release on 23 March that still claimed data had not been misused. By then the company was virtually in ruins with data confiscated and subject to an investigation which could lead to criminal charges.
Having made the apology, really put things right.
The problem with Facebook is that there is a belief that they make corrections oh-so-reluctantly and late when bad practice (fake news, hate messages, misuse of data) is revealed.
There were, when the scandal broke, 2.9 million Facebook users in New Zealand. Quite a few have deleted their profiles and if you are concerned about your personal information you should seriously consider doing it too.
Other Silicon Valley tech behemoths have added their opinion, effectively putting the boot into Facebook and particularly Mark Zuckerberg. Apple’s chief executive, Tim Cook, issued a harsh rebuke to Zuckerberg and Facebook’s business model, saying that detailed profiles of individuals compiled by internet platforms should not exist.
Elon Musk, well he just deleted SpaceX and Tesla’s Facebook pages to support the #deletefacebook movement
Here are some other crisis management lessons:
Firstly – silence will ultimately cost you. In Facebook’s case $60bn was wiped off its market captilisation from Mark Zuckerberg not responding as the disaster unfolded in the media. This also gave his detractors plenty of scope to fill the void.
Secondly – if you employ secretive and underhand business tactics to achieve your business goals you will inevitably be found out and risk losing everything as Alexander Nix discovered.
Thirdly – arrogance is not an attractive virtue. You’re never too big to fail when you are caught out deceiving the people who trusted you the most – your customers.
If you want to hear what Mark Zuckerberg has to say about Facebook's way out of their PR disaster - read Ezra Klein's interview with him on Vox.