While the Cambridge Analytica and Facebook scandal continues to unfold, we wanted to share a quick summary of what happened, the current landscape, and what (if any) changes can be expected in the future.

Executive Summary

• Cambridge Analytica (no relation to Cambridge other than to sound smart) is a political data and communications firm that acquired and used complex psychographic data from Facebook users in the United States to show ads that influenced the outcome of the 2016 elections in favor of Donald Trump.
• The scandal erupted because of the testimony of former Cambridge Analytica employee Christopher Wylie to the New York times and The Observer newspapers. Wylie claims that Cambridge Analytica “misused user data from as many as 50 million Facebook users.”
• The app that gathered the data was a personality profile quiz. To receive the results of the quiz, the user had to click a button agreeing to share their Facebook data and their friends’ Facebook data.
• It is widely reported that Facebook knew about the data collection but did not act to prevent it. Clearly Facebook valued the $85+ million the Trump campaign invested in the platform for advertising over the privacy of its users.
• Fundamentally, this “scandal” is an example of Facebook working exactly as intended: ingesting an incomprehensibly huge volume of data about its users and then regurgitating that data back to hungry advertisers seeking an edge in their placements and messaging.
• These allegations certainly put pressure on Facebook, but we believe it’s unlikely to lead to any meaningful change.
• Acquiring data using Facebook apps may be more difficult, but the Cambridge Analytica methodology required investments of millions of dollars to exfiltrate that amount of data. The typical U.S. Senate or Congressional campaign has never had the resources to operate at this scale, so the impact to these races is even less significant. We project no meaningful changes affecting 2018 campaign activities.
• In advertising campaigns we run for our clients we do not employ any unethical or misleading data scraping strategies or tactics.
• The behavior is not limited to politics — there are other examples of data harvesting employing the same general methodology being used by large, Fortune 500 corporations in their own marketing efforts. Many believe these corporations have more to lose as a result of this revelation.

What is Cambridge Analytica’s relationship with the 2016 presidential elections in the United States?

The company worked for Trump as well as Ted Cruz during the 2016 election. Cambridge performed a variety of services, including designing target audiences for digital ads and fundraising appeals, modeling voter turnout, buying $5 million in television ads and determining where Trump should travel to build more support.

The firm received a $15 million dollar investment from conservative billionaire Robert Mercer (his daughter is a board member of Cambridge Analytica) and attracted former Trump advisor Steve Bannon to forge a working relationship with the Trump campaign.

Christopher Wylie

The whistleblower behind the scandal. Twenty eight year old, liberal-leaning, Canadian Christopher Wylie was a key employee at Cambridge. He left the firm in 2014. Wylie’s theory was that campaigns could influence individuals to vote based on certain psychographic categories such as openness or conscientiousness. While not something particularly new in marketing, the extent to which this was used and the data points gathered by Cambridge Analytica is very advanced. Primarily, the models relied on gathering Facebook status updates, likes, relationships (“the social graph”), and even private messages.

How did Cambridge acquire this data?

After Cambridge received the multimillion investment from Mercer, Wylie commissioned the project to UK-based Russian-American psychologist Alexndr Kogan and his company Global Science Research (GSR).

The firm created a simple personality survey test app called “thisisyourdigitallife,” and people opted in to take it, granting the app permission to scrape their personal data in the process. It also harvested their friends’ data. In a few months they managed to gather data on 50 million American voters. Then, using the results, Cambridge would show extremely specific political messages to each one of the micro-segments.

Unlawful practices?

This week, the FTC started a probe of Facebook for its handling of personal data.

Facebook still hasn’t officially commented of how they plan to deal with this situation, but it is safe to say that the general public is expecting some type of amendment to the way third parties access their users data.

Facebook does not deny that, in 2014, 270,000 users downloaded the “thisisyourdigitallife,” app linked with Cambridge Analytica. But, they allege, the data may not have been properly handled and that Cambridge Analytica has not been honest about deleting user data from the app.

Some believe the data was unlawfully acquired by Cambridge Analytica because the app they claimed the data will be used for academic purposes, and the app did not disclose to users that the data of their friends would be scraped as well as theirs.

In addition, Cambridge Analytica has been accused of holding data they claimed to have deleted.

Cambridge Analytica’s current situation

• CEO Alexander Nix claims that the company is being unfairly targeted since they were involved in Trump’s campaign. He even claims that he is willing to resign to save the company. CA has suspended Nix.
• CA issued a statement claiming that they did not misuse or hold data obtained from Facebook and once they found out the data obtained by GSR breached Facebook’s terms of service they deleted the data. According to Wylie’s testimony they in fact did not.
• They will most likely face problems acquiring commercial and political clients both inside and outside of the United States. It is entirely likely they will rebrand themselves as a means of survival.

Will Facebook lose users?

In spite of growing hashtag activism around #deletefacebook, there’s no indication that these events will lead to a mass exodus of users. Ultimately we believe any hemorrhaging of users from Facebook will be the result of a more compelling social media alternative — which does not seem to exist today.

Further Reading

New York Times: How Trump Consultants Exploited the Facebook Data of Millions
The Observer: The Cambridge Analytica Files
TechCrunch: #deletefacebook
The Independent: The Cambridge Analytica scandal isn’t a scandal: this is how Facebook works
Vice: Cambridge Analytica Bragged About Using Fake News, Bribes, and Ukrainian Hookers to Influence Elections
The Verge: Facebook says it’s hired a forensics team to investigate Cambridge Analytica
Obama Staffer Discusses Similar Tactics Used in 2012 Campaign

Questions?
Ryan Cassin
[email protected]