Backlash on Facebook Ad Program – BUT What Were the Advertisers Thinking ?

There’s already been a lot written about the massive backlash against Facebook’s new ad program so I don’t want to rehash it. I should add that there are some positive developments today as The NY Times and Charlene Li are reporting that Facebook is making changes that are steps in the right direction.

• “Late yesterday the company (Facebook) made an important change, saying that it would not send messages about users’ Internet activities without getting explicit approval each time.”

Rather than just criticize Facebook, I’d like to take a look at the advertisers who are in the Beacon program because it takes two to tango. Many of those advertisers who participated in the Beacon program have damaged their brand because of the “opt-in/opt-out” controversy. Some key questions from an Internet Strategist’s perspective are “what due diligence did they do on the program before jumping on board”, “what analysis did they do from the customer’s perspective (where was the customer advocate ?)”, “how did they assess risk/reward of participation,“ and “who at the company green-lit the initiative.”

Many advertisers jumped on the opportunity to get in on the groundfloor of the “Facebook announcement” and to ride the wave of free publicity by being mentioned in all the press releases and news articles. Makes sense from a macro marketing perspective, but if they had a “customer advocate” who analyzed customer behavior/needs and privacy issues, they would have quickly realized that Beacon would most likely have a negative impact on customer online experiences and that privacy groups would have a field-day. All this, unfortunately, has resulted in damage to some brands and given them some black eyes. There is always a risk/reward to consider, but this was a big risk.

The key to a brand is trust, and participation in this program has damaged the trust that consumers have with some of the participating brands.

In several of the articles that I’ve read, Overstock is mentioned as an example of a Beacon participant that has been the source of a lot of unhappiness for customers. For example, a customer bought a Christmas gift for someone and the recipient was immediately notified via alerts and the surprise was ruined.

NOTE: I do want to give Overstock kudos as they’ve quickly realized their mistake and today’s NY Times article reports:

• “Overstock.com has decided to stop running Facebook’s Beacon program on its site until it becomes an opt-in program.”

I don’t mean to single out Overstock, but all Beacon participants should have thought more about their customer needs and properly balanced it with the marketing opportunity and riding on Facebook’s PR coattails.

Obviously, the impact on the brand varies. For a person who’s Christmas surprise was ruined by Beacon, they may never go back to that brand and will probably share their negative experience of “ruined holiday, lack of privacy” with all their friends and contacts. In other situations, the brand may just be impacted for the short-term. Either way, since there is so much competition and alternative options online, brands (whether e-commerce site, content publishers etc.) can ill afford to risk alienating customers and getting bad virile press.

When making key decisions, it’s critical that Internet strategists look at all aspects (customer needs, marketing/ad opportunity, monetization, ROI, partner trustworthiness, technology, privacy etc) of a “potential solution or program” holistically, in order to properly evaluate the risk/reward and ultimately make the right decision.

– Lee Huang, lhuang23@yahoo.com –