As Facebook Scandals Grow, Should Small Businesses Rethink Using the Site?

As Facebook Scandals Grow, Should Small Businesses Rethink Using the Site?

February 25, 2018

This week the issue of privacy in social media dominated the news. And as Mark Zuckerburg gets ready to head to Washington, the impact of Facebook’s woes on small businesses was addressed. The eroding of trust in the social network among Americans may have small businesses rethink how to use Facebook to reach customers.

Could Facebook’s Latest Data Collection Scandal Impact Small Business Users?

Facebook is in the midst at a series of scandals threatening to impact the size of its user base and thus perhaps its usefulness to small businesses seeking to reach potential customers.

Small businesses can create Facebook pages for their brands and use promoted posts and other paid advertising to reach Facebook users.

However #DeleteFacebook movement following news the site’s data was used by UK-based Cambridge Analytica in the 2017 has stoked fears of a potential mass exodus from the site.

More recently, concerns about Facebook’s collection of extensive call and SMS data is also causing concern.

Facebook (NASDAQ: FB) tried to clear the air about collecting call and text records by saying: “We introduced this feature for Android users a couple of years ago. Contact importers are fairly common among social apps and services as a way to more easily find the people you want to connect with.”

So far the response has been less than lukewarm.

Facebook Collecting Call and SMS Data

In light of the Cambridge Analytica scandal, some Facebook users were motivated to investigate the data Facebook stores in their account. And what they found was years of call records and SMS data which they say was collected without permission.

In a release titled, “Fact Check: Your Call and SMS History,” Facebook came out with a denial of this practice. In it, the social media giant explains call and text history logging is part of an opt-in feature for people using Messenger or Facebook Lite on Android.

Facebook was forced to respond to these allegations after Ars Technica reported it was scraping call and SMS data for years. Ars Technica posted the tweet of Dylan McKay of New Zealand, who was one of the first people to post the data Facebook was collecting on his Twitter account. More Twitter users followed McKay and also posted the data that was being collected.

While technically Facebook might be right, in explaining the situation to Ars Technica some users reached the conclusion they were never presented a separate choice, and the opt-in was the default.

The data collections go as far back as 2015, and it included outgoing, incoming, and missed calls as well as the day, date and time of the call, call duration, name of the person, and a number label, which also applied to text messages. McKay said, “my entire call history with my partner’s mum” along with the historical record of every contact on his phone.

Impact on Advertising

Facebook is an advertising platform used by businesses small and large, and it is a powerful tool. The questions is, will advertisers abandon it and go somewhere else? As long as there are still 2 plus billion users they will not, but if there is a mass departure from Facebook they will probably weigh their options then.

In a statement to CNBC, Parker Ray, chief digital strategist at agency MWWPR, said, “If the changes that Facebook does make impact for the legitimate apps from brands consuming their platform and using it ethically, that’s when you’re going to see people start to pull ads.”

American Trust in Facebook Declining

According to a recent poll conducted by Reuters and Ipsos, the social media company ranked lowest in trust on privacy issues among the major tech companies serving small businesses.

Just 41% of the more than 2,200 Americans surveyed by Reuters and Ipsos say they trust Facebook to obey US privacy laws in regard to their personal data. That, of course, is less than half of America trusting Facebook with their private information.

That number pales in comparison to other tech companies that routinely collect personal data from small businesses and their customers. Amazon had the highest trust rating, 66% in the same poll and 62% trust Google with their personal information. Next, 60% trust Microsoft. Apple has the trust of 53% of Americans with personal info. Yahoo had a sub-par trust factor of 47%.

The poll was taken after it was revealed Facebook allowed data of tens of millions of people to fall into the hands of Cambridge Analytica. The company then fed the information to then-candidate Donald Trump. The company has been accused of doing something similar in 2012 for the benefit of Barack Obama.

Facebook is also in hot water over the collection of data from calls and messages made on your mobile phone.

It’s likely Facebook will overcome this latest setback to its reputation. People are not likely to begin deleting their Facebook accounts en masse.

However, it is interesting to note another question in the Reuters/Ipsos poll on targeted advertising. Facebook’s collection of data allows you to target the right people.

Turns out, a majority of Americans aren’t thrilled about targeted ads. 63% say they want less targeted ads on Facebook. Only 9% want more.

52% of Small Businesses Post on Social Media Daily

The latest Clutch survey says 52 percent of small businesses post on social media every day, and women-owned businesses are more likely to use it more than men.

Seventy-one percent said they use social media, with 16 percent that are not currently using it but plan on doing so, and 13 percent said they don’t use it all.

In addressing this very point, Herhold quotes Jeff Gibbard, chief social strategist at digital agency I’m From the Future. He said, “I’m surprised 100% of companies aren’t on social media. It’s 2018. Social media is a necessity. All companies should have at least somewhat of a social media strategy.”

When using social media, Facebook is the channel of choice for 86 percent followed by 48 percent Instagram, 46 percent YouTube, and Twitter at 44 percent.

As to gender, women are more likely to use social media. They are 74 percent more likely to post on social networks than men at 66 percent. Gibbard told Herhold, “Women are generally better conversationalists than men. They tend to be more expressive and more emotive. It’s no surprise to me why more women business owners use social media.”

Not surprisingly, millennial-owned businesses are more likely to use social media than other age groups. Seventy-nine percent indicated as much, and for those over 35 years of age, it came in at 65 percent.

In term of usage 52 percent of small businesses post to social media at least once per day, 79 percent weekly, 94 percent monthly, and six percent less than monthly. When they do post, 54 percent use images/infographics, 52 percent offers/promotions, 49 percent reviews, 44 percent videos, 40 blog posts, and 33 percent research data.

Social media allows small businesses to reach a wider audience, and if properly used it can deliver great ROIs for your marketing efforts.

More About the Social Media Survey

Kristen Herhold, Content Developer, and Marketer at Clutch, who wrote the report, says ideally social media use by small businesses should be at 100 percent. And considering the many benefits social media offers small companies, she is spot on.

Because small businesses now compete in the physical and digital world, social media is a great tool for bringing both worlds together. Whether you are promoting new products and services on your ecommerce site or having an in-store promotion, with social media you can engage your customers to take part in one or both events.

Herhold adds, “Whether a company is women-, men-, millennial-, or baby-boomer-owned, all businesses can benefit from social media.”

The survey, titled, “How Small Businesses Use Social Media in 2018” was carried out with the participation of 351 small business owners and managers across the US with fewer than 500 employees. The participants were made of up 54 percent male and 46 female in different age groups, with those 18-34 and 35-54 making up equal parts at 40 percent. The remaining 19 percent were 55 and older.

The survey analyzes the platforms, frequency, and the type of content small businesses use and share with social media. Clutch wants small businesses owners to use the data to better plan their social media strategy.

You can take a look at the full survey here.

For help with setting up a social media strategy, please contact Howard Brody of LMC at 702-931-2022.