It is no surprise that Facebook has been struggling for months now. They have been involved in the 2016 United States presidential elections controversy that escalated very quickly especially after Cambridge Analytica turned out to have hired someone that would get into Facebook’s fragile security patterns through a third-party app, that ended up getting access to millions of accounts and was able to manipulate it.
Facebook CEO Mark Zuckerberg said in an interview with CNN recently that they are working on finding out how to prevent this from happening again. However, because of this incident, Facebook users, as well as investors and advertisers, have started to doubt the said social networking site, and it has indeed affected them in a not-so-great way.
Facebook loses top ad campaigns due to the scandal
$70 Billion Loss In 10 Days
Last week, Facebook shares have fallen yet again massively after the United States Consumer Protection Regulator have announced that they will be doing an investigation regarding the fact the Facebook let a third-party app to get access to information of more than 50 million accounts that was ordered by the Cambridge Analytica, who was said to be working with the Trump team in during the presidential elections in 2016.
This then led to the United States Federal Trade Commission to confirm the investigation of the said issue involving Facebook by getting an explanation from Facebook CEO Mark Zuckerberg to share how his company actually handle the data usage. The U.S. FTC has been pressured by some members of the Senate, the Congress, and even officials from Europe to get this information out of Facebook.
It is understandable for their shares to drop so fast, in fact it is now down to 13 percent starting the 16th of March, which was the day that they have confirmed that their data has indeed been improperly used by Cambridge Analytica which then led to them losing $70 billion in their market value at that time. However, sources said that it is actually now on $100 billion when the news spread all over the world.
It has indeed affected a lot of people, especially companies, just like how Tesla CEO Elon Musk decided to delete their SpaceX page on Facebook, that had 2.7 million followers. He also deleted the official Facebook page of Tesla and even referred to it as lame. Musk is known to be one of the highest-profile tech figures to listen to the people when it comes to getting rid of his companies’ Facebook pages.
Advertisers Want Out
Ad campaigns of Mozilla and Commerzbank have been pulled out because of the data scandal that Facebook became a part of. According to a statement released by the Commerzbank’s head of brand strategy, Uwe Hellmann, they have decided to pull out their ad campaign from the said social networking site because data security as well as its safety to protect the image of their company.
Mozilla’s statement, on the other hand, was posted on their official blog site. It says there that they have decided to pause their advertisements on Facebook due to the lack of security patterns that has managed to let third-party apps get accused into the data that has been improperly used.
Mozilla pulls out Facebook Ads
Despite some companies and advertisers pulling out of Facebook, some experts still believe that there are still a lot of companies out there who would grab this chance to get a boost in the social media industry. According to some experts from eMarketer, it is most likely that Facebook CEO Mark Zuckerberg would simply shake off any sort of impact this issue had made commercially.
Some people are now seeing that unsafe social media security, but this doesn’t mean that people would immediately get rid of their Facebook and other social media profiles. The younger generation of the tech-savvy consumers is quickly taking over so it is unlikely to happen that the social media industry would go fall just because of some scandal.
Facebook has proven itself to be an effective marketing vehicle, hence it was used by Cambridge Analytica, so some advertisers may be cautious but there are still a lot who believe things would get better in no time.