Will Cambridge Analytica scandal hurt outlook for digital advertising industry?

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SINGAPORE (May 7): Online luxury retailer Reebonz has been actively using social media platforms Instagram and Facebook to attract customers. The company creates targeted advertisements using Custom Audiences, a tool that allows it to upload data on existing customers, such as email addresses, and get them matched with corresponding Facebook accounts. Reebonz also uses Facebook Pixel, the company’s co-founder Daniel Lim says. The tool lets companies measure the effectiveness of a Facebook advertisement by tracking actions after an ad is displayed.

This form of advertising may come under threat. Since March, it has emerged that political consultancy Cambridge Analytica had obtained the private data of 87 million Facebook users without their consent. The incident sparked outrage and invoked calls to end widespread data collection on social media platforms. Spreading propaganda and advertising a product are not quite the same thing. But, Facebook has already moved to address anticipated concerns about data privacy for the use of advertising. On May 1, for instance, Facebook announced that it will soon allow users to wipe data fed into its ad targeting system by external websites. On March 28, it said that it will be phasing out Partner Categories. The tool allows advertisers to use data from third parties such as Acxiom Corp to target Facebook users. “With Partner Categories, [advertisers] can target people based on offline behaviours people take outside of Facebook, such as owning a home, being in the market for a new truck or being a loyal purchaser of a specific brand or product,” Facebook says on its website. Facebook is also planning a new Custom Audiences permission tool, which will require advertisers to ensure that any data they use has been collected responsibly.

“It is important to note that the data leak associated with the Cambridge Analytica scandal had nothing to do with advertising or Partner Categories, so this is very much a pre-emptive step taken by Facebook,” says Sid Deshpande, a research director at Gartner... (Click here to read the full story)