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Facebook fallout forcing data collection rethink in B.C.

Industry insiders advise companies to engage in personal-data spring cleaning
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SnapTech Marketing co-founder Flavio Marquez: 'People just are completely clueless about what they do online.' (via Chung Chow)

If you flipped on the TV or tuned into the radio 20 years ago, chances were that not every advertisement beamed over broadcast waves would capture the attention of each consumer.

“We saw advertising that we just ignored, we didn’t pay attention to it and we became more or less blind to advertising,” said Flavio Marquez, co-founder of Burnaby’s SnapTech Marketing. “The [online] advertising nowadays … it has become relevant to who we are.”

Data collection practices from technology giants like Facebook Inc. (Nasdaq:FB), Google (Nasdaq:GOOGL) and Amazon.com,Inc. (Nasdaq:AMZN) have become so meticulous that targeted advertisements that specify down to an accurate shoe size now routinely appear on users’ smartphones.

And in the wake of revelations that Facebook and Cambridge Analytica harvested personal data to influence U.S. election results, companies are learning that financial fallout is a very real possibility for companies caught mishandling data.

“[Facebook’s] stock took a nosedive and now they are realizing that this can definitely impact them,” said Ale Brown, founder and principal consultant at Kirke Management Consulting, whose Vancouver-based firm specializes in data privacy and data strategy.

The Facebook data scandal comes two months before the European Union (EU) implements its General Data Protection Regulation, legislation that greatly limits the amount of customer data companies can collect.

If a Canadian firm targets EU citizens, it too must abide by the regulations or face fines of up to 4% of annual global revenue or 20 million euros.

“I call it a good springtime cleaning for companies to really understand what they are collecting, why they are collecting it and how they’re protecting it,” Brown said.

“And now they will have to justify it to people and regulators.”

Brown added that companies that like to hoard personal information on customers will have to rethink business strategies that depend on collecting data on preferred brands, clothing sizes, food habits and health-care needs.

“Sometimes they don’t even know where the data is, so they really need to go into their systems and have a good inventory of the data they’re collecting and start getting rid of what they don’t need anymore,” she said.

But Marquez isn’t so sure the Facebook data scandal will bring about a reckoning, either for how consumers protect their data or for how businesses use it.

“At some point this is going to blow over,” he said.

“People just are completely clueless about what they do online. Facebook, social media, YouTube, all this kind of stuff is deeply ingrained into our daily lives. Chances [that] the majority of people stop using those things are pretty minuscule.”

For marketing professionals like Marquez, it’s not individual data such as a person’s birthday or home address that’s so important.

It’s the aggregate consumer data, such as general geographic location, interests, sex or age, that Facebook and Google collect that allows advertisers to target specific markets.

“We don’t target [individual] people because it’s difficult; it’s not worth it,” Marquez said. “The behavioural data is what agencies like ours rely upon to bring relevant advertising to consumers, because ultimately as consumers we’re bombarded with advertising every living hour of our lives.”

Meanwhile, 6S Marketing co-founder John Blown believes mounting pressure on Facebook could spur government to take further initiatives to protect data, but he doesn’t believe tech giants will rein in their business models.

“Facebook and Google aren’t going to get rid of that because that’s how they make their money,” he said. “Without that data their advertising platforms aren’t worth very much.”

Blown added the only other option would be for those companies to move into a subscription-based model – a scenario he does not believe consumers would support.

“People are addicted to their social media,” he said. “In a month or two there’s going to be another news story, and people will be back on social media doing their thing.”

And if government places further restrictions on personal data, Blown echoed Marquez’s sentiments that it’s really the anonymized aggregate data that matters most to marketing agencies.

But for Brown, the financial fallout for Facebook is proof companies are going to have to be more protective of the data they collect and use.

“Don’t get me wrong. Some of the data is really going to help personalize new products and services, and they’re going to speak directly to you,” she said.

“But they have to be up front about it and be transparent.”

– Tyler Orton, Business in Vancouver