Should media companies trust Facebook?
It is difficult to conceive of a company having a better month than the one Facebook is having. Last week, Mark Zuckerberg was cutting an appealing figure on 60 Minutes, no easy feat. This week, he was named Time magazine's 2010 Person of the Year, and Facebook topped Glassdoor's list -- with a score of 4.6 out of 5 -- as the best company in which to work in the United States. And the topper, disclosed today: Facebook expects its 2010 revenues to be higher than expected, at around $2 billion.
"The love affair of consumers with social networks is an abiding one," Karsten Weide, an analyst at IDC, told Bloomberg Businessweek. "All the big brands are there." But should media companies trust Facebook? The company, as Media Memo reports, has been aggressively wooing media companies to trade data on their consumers in exchange for traffic and engagement.
But a recent Rasmussen Reports survey found that 86% of consumers were at least somewhat concerned about the security of personal information posted on the social networking sites, more than half of whom said they were very concerned. And Facebook clearly does not have a very good record on privacy issues.
It would be foolish, obviously, for any media company to ignore Facebook and its 550 million users. But those who take Facebook's privacy issues too lightly as they consider sharing their audience data risk losing the trust earned over years -- sometimes decades -- with their readers. And while everyone understands that a free platform like Facebook is going to share consumer information with advertisers in order to pay their bills, online privacy is always going to be a prickly issue. Publishers should greet any overtures from Facebook with a healthy dose of skepticism as well as some serious questions about security.
After all the chocolates and flowers and the thousand bows and curtsies, Facebook's motive for content partnerships is simple: it wants data about your users. This information, of course, makes the company very attractive to advertisers. According to eMarketer, Facebook might capture 9.4% of the display ad market this year, up from 6.6 % last year. "Facebook doesn’t attest to be perfect about being perfectly transparent about where they’re going. But they’re pretty predictable," one wooed media executive told Media Memo. "It’s not like Apple, where they’re closed."
Ah, yes: Apple. A recent study by the Audit Bureau of Circulations and ABC Interactive found that only 11 percent of respondents were satisfied with Apple's handling of subscriber information and analytics through its iTunes store, with 15 percent saying they were dissatisfied. But publishers should ask themselves what value is Facebook's vaunted transparency and predictability if another privacy scandal hits? Facebook will probably just brush itself off and walk away with some superficial bruising, like it did last time, and the time before that. But how would such a scandal affect the trust built over years between a publication in business with Facebook and its readers?
Just something to keep in mind.