The Facebook Meltdown

Social media is on the verge of a meltdown in consumer confidence that could totally redefine its role in traditional and new media.

The crisis stems from recent and increasingly numerous revelations that Facebook, MySpace and even Google have played foot loose and fancy free with privacy issues that turned out to matter to hundreds of millions of social network users.

Facebook was recently outed for giving heretofore thought to be private user data to companies for advertising purposes – even, according to a recent Wall Street Journal article – companies that didn’t ask for the data. MySpace, content sites Livejournal and Digg were also implicated.

The breach in consumer confidence teaches traditional media companies such as radio operators who have been slow to adopt full-fledged social networking that there is both trouble ahead and opportunity.

Facebook is having to backtrack in light of revelations such as their desire to report user data to Google’s DoubleClick and Yahoo!s Right Media.

According to The Journal article:

"Across the Web, it's common for advertisers to receive the address of the page from which a user clicked on an ad. Usually, they receive nothing more about the user than an unintelligible string of letters and numbers that can't be traced back to an individual. With social networking sites, however, those addresses typically include user names that could direct advertisers back to a profile page full of personal information. In some cases, user names are people's real names."

More here.

Congress is up in arms.

Opinion leaders such as techie Leo Laporte have made a big deal of closing their Facebook accounts over privacy concerns and now it has been revealed that a whopping 60% of 1,588 Facebook users polled in a Sophos study are thinking about quitting Facebook over privacy concerns. Some 16% claimed they already stopped using Facebook.

The findings show that those opting out or thinking about leaving Facebook are perplexed with the complicated and sneaky opt-out system Facebook currently employs. If you’ve tried to opt out, you know how difficult it is begging the question -- is that exactly the way Facebook wanted it?

Check out this graphic from the New York Times showing 50 settings and 150 options you'd have to navigate to protect your Facebook privacy.

Now Mark Zuckerberg, Facebook founder under heavy fire, is having to backtrack again as he has done many times in the past when he riles the growing Facebook nation.

Any day now you’ll hear of massive changes before this thing gets out of hand -- if it isn’t already too late. In a recent Washington Post Op-Ed piece, Zuckerberg continues to show that he is clueless at what he did wrong.

You can expect a simplified “master control” to allow for consumers to protect their privacy vis-à-vis Facebook’s advertising ambitions. The new Facebook set up will let users choose from three categories -- everyone, friends of friends or just friends.

It’s too little too late as social network users are clearly spooked.

Social media is such a big thing with the next generation that it is impossible to see the future without factoring in social networking. Yet even young entrepreneurs like Zuckerberg, the Harvard dropout, seem to channel their establishment tendencies and that’s a mistake.

Back to radio.

Radio companies barely have a working knowledge of social networking so they blindly link to Facebook, use Twitter and conduct contests via text messaging. That's what they think is social networking.

Very primitive stuff.

In a way their lack of sophistication may now present an opportunity to go back and learn the lessons MySpace, Facebook and Google, caught recently for intercepting personal data from homes and businesses while sending vans out to take photos for its Street Views service, have not learned.

Social media is key to the mobile Internet.

Even terrestrial radio companies will have to learn to understand social networking.

Here are the lessons as I see them – in shorthand:

1. Break a trust with consumers and you may never win their full confidence back again (watch this play out over the next few months of concern over social media privacy issues).

2. The only way to proceed from day one is to guarantee privacy and put the sharing of consumer information in the hands of the consumer. Start with the assumption that consumers will want to opt out and then make it easy for them to opt in if they like. That's the exact opposite of how Facebook made its mistake.

3. Don’t confuse Facebook, Twitter or the other social networks in and of themselves for social media. They are early to the game but they are not the end game. Real social networking will be when media companies and others build fan bases around content and personalities. I consider my thousands of readers as part of my social network. Facebook is a tool I employ but it is not the only tool I plan to employ over the months and years ahead.

4. Talk to and with your social network base. Rule number one is social networking is two-way talk. If you’re not available for interaction with the fan base, it’s just another form of mass marketing and it will fail.

5. Social networking is not – I repeat – not ever going to become new age direct mail. If you don’t believe me look at what happens when Facebook pisses off its users – 60% think about quitting the site.

Social media addicts are about to teach aggressive marketers what happens when you break a trust and sell out your fan base.

It’s not too late for radio to be on the right side of this critical and pervasive aspect of all communication going forward by building trust in the digital world and then safeguarding it.

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