Facebook Faces Congress: What Brands Should Know
Facebook CEO Mark Zuckerberg testified before congress yesterday after spending several grueling hours responding to questions and concerns from the US Senate’s Judiciary and Commerce Committees. Though the recent Cambridge Analytica scandal was the focus, several other revelations came to light that everyone should be taking note of.
Facebook Subsists on Third-Party Advertisements
When asked by Senator hatch how Facebook was able to sustain a “free” business model, Zuckerberg replied that Facebook was funded by advertisements.
Zuckerberg also addressed the concern about Facebook “listening in” on audio from phones to use target ads. He referred to this as a “conspiracy theory”.
A Paid Version of Facebook May Be in the Works
Facebook has always promised that it will be free to its users. But from Zuckerberg’s testimony (and recent comments made by Facebook COO Sheryl Sandberg) suggest is that a premium option which allows users to opt out of third-party ads may be in the works.
Brands should take note as a paid version would limit their potential reach. Making such a move may also drive free users further away from the already troubled social network.
Damage Control Is Best Handled Early On
Another point made by congress throughout the proceedings was that several data breaches have occurred on Facebook for the past few years, yet the social media network has been close to silent when speaking on any of them. In regards to the Cambridge Analytica scandal alone, the number of affected users has continued to rise from 50 million to over 87 million to date. This has reduced user trust in the network and has resulted in users (and your potential leads) leaving in droves.
Drama May Not Mean Disaster
Facebook may be in hot water, but the stock market sure didn’t seem to notice. Facebook shares increased by 4.5% today, the strongest single-day performance it has had since April 2016.
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