This is a download from the FM 89.9, the Business Station. This is a download from the FM 89.9, the Business Station. The FM 89.9, the Business Station. My name is Rich Redberry-Singing, and for Jeff Sandu, of course, it is Fun Friday with me right now is Coach Wops.
Matt Armitage. Yeah, possibly the least fun person ever to Christ of Friday, but here I am anyway. You might have heard the name, Cambridge Analytica, banded around the past few days. The data analysis firm has found itself at the centre of controversy, surrounding its actions and possibly breaches of millions of Facebook user profiles.
That's right, this week is no laughing matter for Culture Pops Matt Armitage, as we met Spleen, your data rights. Do you want to boil the story down a little bit for listeners? It can be a little bit complicated. It can be a bit complicated.
And I'm sure a lot of people have heard a lot about this anyway, so I don't want to repeat all of that as well. So if you have been living under a rock this week, I'll give you a few pointers. A whistleblower called Christopher Wiley has lifted the lid on potential abuses and manipulations of Facebook user data by a British-American analytics firm called Cambridge Analytica. That firm was founded in 2013, and the firm's mission is to help businesses and political organisations in their efforts to change audience behaviour, which is a very lovely little phrase.
Now, the firm was at the heart of the Republican campaign in the 2016 presidential elections in the US, and this week it was alleged that the company had managed to harvest user data on more than 50 million Facebook profiles, and that this information formed the basis for the strategies it used to help elect Donald Trump. Exactly. Now, there appears to be some disagreement between Cambridge Analytica and Facebook as to whether that user information was obtained legitimately. Of course, I'm not going to cast any opinion either way.
I'll let better people than me do that. And it turns out this may not be an isolated incident. Again, this is unverified information, but former Facebook staffers have alleged in the press that this kind of behaviour is commonplace amongst marketing and research firms. They gain restricted access to user data, but then take a lot more data than they should.
So just a normal weekend Silicon Valley then? On the face of it, pretty much. Yeah, you know, I hack you, but you don't want to admit that you've been hacked because it will affect your share price, so you send me a cease and desist letter, and we all go off and we sell our spoils, and no one except the users, whose only purpose, of course, to exist is to create data will be harmed. So yes, another day in the valley.
But to the dismay of everyone concerned, because this breach hasn't recently happened a couple of years ago, everyone concerned has been doing their best to make sure it didn't get out. But unfortunately for them it has got out and it doesn't look like this story is going to get away, because now it's wrapped up in the FBI probe into election interference and senior management figures from both companies have been asked to appear before elected representatives in the Parliament of both the United States and the United Kingdom. This is especially daunting for them as some of those same figures have already given testimony under oath to those legislative bodies. Oh, the idea.
Yes, that these latest revelations could possibly potentially seem to contradict. So I would imagine that there may also be requests from other European countries to send these people before the Parliament, before the end of the week. And it's quite telling that senior figures from Facebook have kept a low profile. They didn't make any statement, I think Mark Zuckerberg only came out on Wednesday night or Thursday morning, depending on what time zone you're in.
So I would imagine that during the first part of the week, there was a room somewhere with hundreds of lawyers running through multiple scenarios for how Facebook should respond to this emerging scandal. The thing is, are we getting used to these stories in Revelation? Do they have any power to even shock us anymore? Well, it does seem sometimes that the media and people are excited more than ordinary people.
Part of that I think is in our understanding, or rather our lack of understanding, of what data is and what it can do. So yes, we are becoming jaded, but there's also a lack of comprehension of how big this story is. So in one of those ironies that's now becoming kind of wearying rather than shocking, you've probably clicked on a link on Facebook that takes you to a story about how Facebook, or those who have been granted access to it, have abused their power. Now, if that doesn't sound ironic, well, that's because your growing skepticism about Facebook's use of your profile data now forms part of your Facebook profile data.
Certainly, I think the markets have spoken. We've seen, I think, between 50 and 70 billion US dollars. They did not have a good day. They did not have a good day.
We've seen that white dot Facebook shares, but it doesn't really matter, to be honest, to anyone except for Facebook's investors, because the real issue, I think, is whether it will affect Facebook's revenue. And that, in turn, is linked to how users respond to this growing scandal. So I'm going to talk about some of the more interesting implications of the revelations, but if you do want to know more about the minutiae of the story, two British news sources have been covering this in depth. The Guardian.com, through its observer banner, broke the story last weekend.
They're still unraveling a lot of the threads. As you were mentioning to me, I've heard before the show, Channel 4, the British news show, has some incredible video footage, a sting operation that was done with Alexander Nix, the CEO of Cambridge Analytica. So, catch up with that information. And of course, because the story is still evolving so rapidly, there will no doubt be a lot more information that comes out between when we recorded this show on Thursday afternoon and by the time it's broadcast on Friday morning.
Right. So, in a sense, there's two issues. How companies like Facebook allow third parties to access user profiles, and what those third parties can then deduce from that data? And dries, it sounds, at this point, it's harder to say which is the juicier story, because they're both actually really juicy stories.
So, on the one hand, we have issues of trust, particularly because we have to trust companies like Facebook with our information. We don't have a choice. No, we don't have a choice. And you have to also acknowledge that this is a really fine balancing act.
We can't pretend that protecting that data is easy. So, Facebook has to act according to the data privacy laws of every country that it operates in. In some countries, Facebook is protecting your data from overreach by governments. In other countries, the laws are designed to prevent overreach by Facebook when it comes to your user data.
And lastly, Facebook has to abide by the spirit of those agreements and laws, while actually selling your data to third-party companies so that it can turn a profit. So, you can see that that's a really, really complex system. And, you know, it really is one heck of a cartwheel. And it's a system that guarantees that those wheels are going to come off from time to time.
All right. Throw some light into the ways that advertisers can use Facebook data. Maybe that's something a lot of our listeners aren't aware of. Okay.
So, I regularly promote these shows through Facebook and Instagram. So, beyond putting up posts and answering the shows, which, you know, let's face it, get seen by pretty much nobody. If I don't put money behind them. So, I put a small amount of money into promoting the shows.
One of the reasons I do that is because Facebook will give me a great deal of control of the targeting of those ads. Because you paid for it. I paid for it, but also it means I can make a decent return in terms of eyeballs and streams out of a very small amount of money. Because I can be very targeted.
I'm not just sending out to a mass of people. And, you know, it's not like a click-through ad where if people say it's some people may click or not. I know exactly what kind of people that I'm going to be targeting. I can choose basic criteria such as age, range and sex.
I can geo-locate, which is very important. So, if I want to, the post will only be promoted to people within a 5-kilometre radius of this station. Of course, I choose a wider range than that because, you know, I can just open the windows here at BFM towers and shout to the people within a 5-kilometre radius. But most importantly, I can start to narrow the profile in terms of people's choices and preferences.
Alright. But let's be clear then. You can't see actual user data. I don't know the specific people we'll see the post.
I only know what kind of people we'll see the post, or at least people with some of the preferences that I've defined. And those preferences come from things that we've liked. Yeah, that's why I said it's ironic about being skeptical about Facebook. Because that can be used by Facebook to sell your information to companies that want to market to people who are skeptical about Facebook.
And that's quite a lot of word salad for, you know, a Friday morning. But all of this is done so easily and effortlessly that I can promote my post, boost my post from my phone. If I live my phone up now, let me have a look. Facebook gives me a whole range of demographics, interests and behavioural traits that I can select.
I can select according to interests, activities, any pages that people have liked. I can target according to education and employment details, or according to criteria relating to lifestyles. I can also target people according to the way they use certain devices, whether they're more mobile centric or whether they prefer desktop. And also I can use information about purchasing history, or they're likely intent to buy certain products, which is quite a phenomenal thing.
So if I want, I can choose people with PhDs who are active poll vultures and like badgivating and knitting. You know, which sounds absolutely crazy. And that's all there on your phone. As I said, I don't need a big console or any bespoke programme.
This is all baked into Facebook's browser and mobile apps. They already have my payment details on file. I indicate my total spend and duration. They give me a rough estimation of how many people I'll reach with that budget, and how many more I can reach if I increase that spend a little bit.
Once I press go, they usually come back within half an hour. The system has auto-reviewed the ad and comes back with an approval or ask you to tweak certain things. Once that's done, I can monitor the effectiveness pretty much in real time. I can let the ad run or I can cancel it, and tweak and rebuild the target audience to make it more effective.
The whole process takes minutes for the kind of highly targeted and usually very responsive campaign that wouldn't have been remotely possible, even with the biggest advertising budget, say a decade ago. Okay, so now we know the secrets behind Matt's Blaine's amazing advertising success after the break. We'll find out what this means for you. You're listening to Enterprise on BFM 18.9.
Break from midfield, BFM 89.9. BFM 89.9 is a business station. So before the break, we were talking about Cambridge Analytica and the way advertisers and data firms are able to monetize the actions we take online. Why should listeners be concerned about breaches like this?
Well, as I mentioned at the top of the show, a lot of people don't understand how information like this can be used. I just demonstrated how I use this information, but people don't necessarily understand how it builds up to show a profile of them. They see what they do online as a bunch of unconnected data points. So let's look at some of the things that somebody might do on Facebook.
You may be a member of a neighborhood group that someone set up to share information about local amenities, or security, or meetups, or social events, yoga sessions on Saturday, that kind of thing. Perhaps you're the kind of person who comments on posts that your friends share about the latest Netflix shows. You tend to like posts from neighborhood stores and cafes rather than multinational chains. You rarely show interests rather than your friends post about world news, but you're always the first to comment on anything linked to the abuse of children.
However much you might want it to be, this is not disconnected information. It doesn't exist in a vacuum. That information tells someone, somebody like me, for example, that you're active in your community, that you prefer to spend your money within that community rather than giving it to large-faced corporations. You probably take the security of your family very seriously.
You spend a fair bit of time at home watching TV. For political operations like Cambridge Analytica and other marketers, that information is absolute gold dust. You can make a lot of inferences just from that tiny pool of data. And think about all of those data points that you would create over a year.
I'm just talking about something that you've done in the last five minutes. And it tells them that you're likely to, or you're most likely to be middle class. You're probably educated. You've got a fairly good job, probably a middle management position.
You've got a family. You're saving for the future. And that gives targeting firms a really good idea how to push your buttons. But it's still anonymous.
They don't know who you are, they? Well, I'll answer that in two parts. So... That's where we...
Okay. Exactly. So firstly, there will be a group of people who don't care who you are as much as what you are and where you are. Because a lot of us are far less individual than we think we are.
The way artificial intelligence works at the moment is largely predicated on that basis. So instead of creating a machine that can think like one human, we create machines that think like an aggregate of humans because an aggregate of humans is much less individual. That might not sound like much, but it means you can bypass the enormous problems that you face in replicating the biological process of our brain with the statistical likelihood of aggregate outcomes. And that kind of approach is very useful to a company who might be trying to influence an election result, say, in a marginal constituency.
You may suddenly find your feed full of terrifying looking video clips and news reports that are designed to nudge you towards, say, a law and order candidate. Similarly, and I'm not claiming that anyone has done this, simply that it could be possible, if you were someone of a particular ethnic group who might be targeted by that same law and order candidate, and thus you're unlikely to vote for him or her, you may find your feed full of reports of police roadblocks and ID checks. You know, tend to target your race. So you may make the decision to skip this election cycle and not go to the polling station.
So you fire up one group to vote and you suppress the desire to vote in another group. And the second part, presumably this is where they can identify. Well, yeah, because the information we generate isn't as anonymous as we think. We'll talk about this more on a forthcoming show, but things like Bitcoin and other digital currencies are way less anonymous than people think.
In fact, they're not even designed to be anonymous. They're designed to be decentralized. People tend to confuse the two things. So, for example, if forensic cryptologists can often trace a Bitcoin transaction back to an individual.
In a matter of minutes. Why? Because all the transactions are stored in the shared ledger. The transactions end up in the digital wallet and you sign up for that wallet using your everyday email address at an online exchange.
That's an telephone number. Exactly. So your fingerprints are all over it. Medical insurers have gotten into hot water in the past for reverse mining anonymized medical data because some details tend to stick out.
So let's say you were trying to hide the fact that you had multiple sclerosis in order to get cheap medical insurance. Your behavior such as items you might purchase in independent pharmacies or support groups that you belong to, all of these things might appear on your credit card statements and that data might be available from third party organizations. So when you look at information from a huge data set, it's almost impossible to identify an individual. When you combine and cross reference the data sets with other databases that operate at a far more granular and local level, then you can start matching individual households and names to those particular medical conditions.
Okay, fine. How do we keep our data and our profile safe then? Well, maybe safe isn't the word, but there are quite a lot of things you can do to protect yourself. Firstly, there is the law.
Secondly, you can bring direct pressure on companies like Facebook. And thirdly, there's direct action. And I don't mean that in a social activism kind of sense. I mean physical steps that you can take to muddy the waters.
You first mentioned the law. What do you mean by that? How does that work? Well, one of the things that came out in the sting on Cambridge Analytica CEO Alex Nix was his attitude towards the cluelessness of lawmakers when it comes to this kind of data harvesting.
Now he alluded to being happy to answer their questions because they weren't asking the right ones because they don't know enough about this current of information to know what are the questions they should be asking. And if you don't know what questions to ask, how can you be the person who is regulating or legislating the industry? The industry. Yeah.
Exactly. So that would be the first thing I think when you elect representatives or if you're lucky enough to be part of the process of actually selecting candidates, make sure that they have an understanding of digital commerce and data flows. Make it very clear if your candidates or representatives have town hall or meet the public time meetings, make clear that you expect them to represent your rights in this area. And of course, find out what the law is in your country and work out whether, you know, if you're so because everyone's position is going to be different.
The law's adequate, inadequate or overreaching and let your local representatives know. But Facebook is a huge beast, right? What kind of pressure can we bring onto companies like Facebook? They're enormous.
They say on that ivory towers over there wherever they are. How do we get to them? Well, here's the tricky thing. In order to sort this part out, you have to understand that or all of us, we have to understand that we're also complicit, that we're also partly to blame for this situation.
And that's not something that people like to hear because it's always nicer to have someone to blame rather than to stare in a mirror. We click degree. Well, more than that, we're in this situation because we decided that we don't want to pay for this stuff. That means Facebook or Google or Instagram, everyone else that provides these services to us free of charge.
They have to find some other way of making money. And as none of us likes watching adverts, that means they have to jump through all sorts of hoops in order to turn our data into money. So one simple thing we could do is pay for Facebook, give them a monthly fee. That doesn't mean they're going to stop selling ads overnight or giving third parties access to the data, but it does strengthen our hand when it comes to telling them what we think is acceptable and what isn't when it comes to handling our private information.
Because right now, we are the users, we're the consumers, but we're not the customers. Customers are the people who give Facebook cold, hard cash, people like Cambridge Analytica. Our power relies on the need of Facebook to keep our eyes on screen in order to sell the information we generate to those customers. So I would say strengthen your hand, cut out the middleman, become a customer and not a consumer.
Alright, the third root is direct action you were talking about. Well, yeah, there are already little programs that you can put on your computer that will make multiple random searches every minute to search engines like Google. So that distorts the profile that Google builds around you, because one moment you might be searching for nappies, you might be looking for water filtration units, you know, it will just search for all of the weirdest and... Randomly so?
Yeah, absolutely random. I don't think you can do the same kind of thing automatically on sites like Facebook, but you can certainly do it manually. Randomly like and unliking celebrity profiles and interests, following links to new stories that you have no interest in and leaving those pages open to show that you're spending time on those sites. Maybe even click around on that site a little bit more to create the feeling that you're interested in this kind of information.
Just adding these layers of distortion that will affect the accuracy of any profile that's built around you. I know it sounds really small and petty, but if enough people do it, it starts to distort those aggregate data pictures. It's like the thing when it's listening, you just go... Yeah, exactly.
That's precisely what it is. Because if that data isn't accurate, then it has little or no value. So when a company like Cambridge Analytica comes along, even if it does scoop up all this information, it will either have to come up with another piece of software that tries to filter out all of that white noise and this deliberate distortion, or it runs the risk of selling unsound marketing strategies to its clients. Now, there's been a lot of people and a lot of movement, and in fact there was even a trending Twitter hashtag of Delete Facebook.
But one thing you've not suggested is deleting your Facebook profile. Why is that, Matt? It's because I still believe that the business model is more of the cause than the site itself now. As much as we might think otherwise, none of us needs to be on Facebook, so it is a personal decision to be there.
But as far as I can see, the Delete Facebook is more of a protest than a solution. There are still loads of other ways that we get tracked every time we go online. If we ditch Facebook and we go and join another social network that again we're not paying for, then we're inviting exactly the same stuff. So yes, there is that campaign doing the rounds at the moment.
Of course, Facebook's algorithms don't particularly favour hashtags, so there's another irony because you're waging this campaign on Twitter, which is not without issues. We certainly know that. Okay, so there has been discussion and a lot of people have said that they think this could well be the end of Facebook. Could it be?
Some people also think that the biting satire of Trevor Noah, Stephen Colbert and Seth Mayors can bring down Donald Trump. Of course, it can't because they're already preaching to the choir, and the same thing applies here. Facebook isn't just Facebook. Facebook is Instagram.
Facebook is WhatsApp. Facebook is an enormous company with, I almost say country. You did, yeah. It's an enormous company with many tentacles and it's branched out of its core business for very sound financial reasons.
Some of those are because it wants to diversify. Some is because it's anticipating trends and movements by us, its users, and also because it wants to consolidate its market position. The bigger question for me is how many of Facebook's two billion users even care about this story? How many of them are using it in a language that this story is even going to be reported in?
As I said, Zuckerberg will probably be more interested about the effect of this on revenue than on share price over the short term. He's always sought to be in control of the company, and even after the IPO, he controls the majority of the voting shares. So if you remove him as CEO, take him off the board, he still effectively controls the company. The only thing that is going to bring Facebook down is technology.
When we make that next technological leap, you have to ask, will Facebook be agile enough to switch? Or is it going to go the way of, for instance, my space, eBay, Flickr, and all the others who are at one end or another of the Adaptive Dietannel? Because despite the ubiquity of Facebook and Google today, in my view, it seems pretty likely that Amazon is going to emerge as the champion of the next generation of the internet. It's octopus-like.
It has this enormous retail and distribution system. It can handle everything from fresh food to roofing materials, an enormous chunk of the service market that powers all of our cloud-based apps is on Amazon, and the class-leading voice-activated operating system in the shape of Alexa is also Amazon's. So my money is on Amazon replacing all of these companies in the very near future and defining the next generation of the internet. You don't see any easy solutions.
Because it's not something that's black and white. We love things to do with technology to be binary, zero or one. And they're not. They're just like everything else in their life.
Most of it exists in this kind of gray zone. Of course, it would seem that Facebook needs far more robust systems in place to stop its partners and customers from violating its terms and conditions. And that's something that Mark Zuckerberg admitted on Wednesday night. But it does go back to something that I've been saying for quite a long time.
If you have data online, the safest thing is to assume that it is compromised. So when you post something to a social network, assume the whole world is watching and asking yourself, do you want the whole world to see or hear this? I know it sounds paranoid, but paranoia is actually your best protection here to assume that there is no protection. No system is hack-proof.
In the Cambridge Analytica case, illegitimate information may have been obtained through legitimate means. But we've seen in repeat attacks over the last few years, whether it's on our ISPs, our banks, the companies where you contract services to or from. Even the most robust systems can be compromised and often far more easily than we imagine. Perhaps you're one of the gullible people who responds to direct phishing and email scams.
I've known a few people who've been caught in online honey traps. The point is if your information is online, someone can find it. And by online, I mean all those photos that are sitting on your phone that you think are currently private, they're not. It's just that nobody has bothered to hack you yet.
You might be one of the lucky tens of millions who never get hacked or you may get hacked tomorrow or next week or next year or as I'm saying this probably to me in the next five minutes. However much protection we have from laws or companies, no one is going to do this for you. Protecting yourself starts with you. Unfortunately, it doesn't end there.
It's a very stark. I feel, you know, this kind of messaging is always kind of kind of stark because we do expect Facebook to guarantee our privacy. We expect governments to guarantee our privacy, but we don't help ourselves. If you want to take nude photos of yourself and store them on your phone, that is one step away from being online.
It's probably been backed up to some cloud server somewhere in China in China already. So that is already out there. I think I had a discussion earlier this day with someone who said that the younger generation like things are instastories because they disappear. So you can vent and then it disappears, but it doesn't disappear because it's been uploaded to someone's server.
It disappears from your phone. It disappears from your friend's feed. That is not the same as it auto disrupting. Right.
Don't go anywhere. We've got Geeks Squawk just coming up into the few minutes. Listen to BFM 89.9, the Business Station. Thank you for listening to this podcast.
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