What does the Cambridge Analytica Facebook scandal mean for small businesses in Australia?

March 27, 2018

It has been a tumultuous start to 2018 for social media giant Facebook, which is embroiled in a controversy stemming from the leaking of personal information from more than 50 million Facebook users four years ago.

The Cambridge Analytica scandal, which takes its name from the data analytics firm that allegedly used the leaked information without permission to influence voters in the most recent US election, has garnered worldwide coverage since it was exposed last week.

It’s also prompted the growing #DeleteFacebook movement that’s sweeping the internet, encouraging users to delete their social media accounts in wake of widespread concerns about how the social network uses and protects user data.

According to The Guardian, Facebook has been warned about its data security policies for a number of years, and had known about this particular data breach since 2015. Facebook boss Mark Zuckerberg has issued a public apology for the breach via television interviews and newspaper advertisements, saying: “This was a breach of trust, and I’m sorry we didn’t do more at the time. We’re now taking steps to make sure this doesn’t happen again”.

But with advertisers around the world threatening to leave Facebook, the question extends further than whether or not individuals will be foregoing their Facebook profiles: how it will effect businesses that have come to rely on the platform to promote their products and services?

SmartCompany asked a number of small business operators who regularly use Facebook for their take.

Tim Reid runs his own marketing agency and is the face behind the Small Business Big Marketing podcast. He believes the changes among small businesses in response to the Cambridge Analytica allegations won’t be extreme. But he says it’s fantastic that more business owners will now be considering their social actions more thoroughly.

“Maybe initially they will question Facebook going forward, maybe right now a lot of small business owners are going to have a look at it and ask ‘is it worth it?'”, he says.

But in the long run, he doesn’t believe Facebook will lose its large following or that small business will turn away from the social media giant in droves.

“I don’t think that Facebook is going to go away … I don’t think there are many other platforms for people to go to, there is probably only five major ones (social media platforms) in Australia that we should be aware of,” he says.

When it comes to future businesses considering using Facebook for their marketing, armed with what is now public knowledge, Reid says he would take different approach.

“I don’t think that every small business should be on Facebook, each business should look at it on its merits,” he says.

For Kate Morris, founder of online cosmetics retailer Adore Beauty, the fear that Facebook could no longer keep her businesses information safe is worrying.

“Absolutely the news crossed my mind … I think what we are seeing is just a general lack of responsibility,” she says.

The harrowing reality however is that for online providers like Adore Beauty, Facebook is essentially one of the largest sales and marketing platforms available, says Morris.

“I think for businesses, whether you like Facebook or not it is is a must … what other choices do you have as an online provider? If a number of small businesses turned around and left Facebook tomorrow, I can’t imagine Mark Zuckerberg would give two hoots!”

But it is an important reminder about the business models of large technology companies like Facebook, says Morris.

“You could start up a businesses and avoid advertising on Facebook, [but] it would be the equivalent to tying one hand behind your back. At the end of the day, if the service is free, you are the product,” she says.