Digital Age and Corporate Social Responsibility — The Infamous Cambridge Analytica Debacle
1.0 Business opportunity for Cambridge Analytica
Founded in 2013 by a cybersecurity expert Alastair MacWillson, Cambridge Analytica was a British political consultancy firm owned by the parent company SCL Group. Cambridge Analytica however was defunct in 2018 due to a scandal involving data breach at Facebook and US presidential campaign. However, their previous operations were unethical as well, as they used data mining, misappropriation of digital assets as well as analysis of unethically acquired data during every electoral project undertaken by them (Ingram, 2018). An investigation conducted by Channel 4 revealed that they have worked on more than 200 elections around the world and they use entrapment of politicians, as well as public opinion influence tactics using the social media to discredit the opponents (Channel4, 2018).
Despite these scandals and their unethical practice, Cambridge Analytica had an excellent opportunity to thrive as a business due to their intellectual resources. A business opportunity enables an individual or an organisation to offer certain service or products to their customers as they are capable to meet the requirements of the customers. Similarly, Cambridge Analytica had the business opportunity as they had the intellectual resources and infrastructure to address the requirements of the contemporary political domain. As the company’s expertise in data science had enabled them to analyse an individual’s behaviour in order to predict their future behaviour or decisions, they utilised this expertise to conduct psychographic profiling (Cadwalladr, 2018). As this profiling can be used to conduct the individually targeted political advertising to influence their political stance and views. Now, political parties around the world including the most emphasised Donald Trump’s presidential campaign were the business opportunity for the company, which let them utilise their psychographic profiling technology to benefit their clients.
1.1 Exploitation of opportunity by Cambridge Analytica
Although Cambridge Analyica had excellent digital tools for psychological profiling using their social media surfing data, the implementation or the capturing of the previously discussed business opportunity using this unique mechanism was heavily flawed. This is because Cambridge Analytica acquired 50 million Facebook user data by unethical means. They had harvested this individual data for psychological profiling since 2014 and used those information to influence the voters in elections around the world such as India, Australia, Kenya and so on (Osborne, 2018). Now, looking at their service offerings in the global contemporary political environment has created an immense opportunity as the political parties and campaigns utilised their consultation service. However, as stated by the whistleblower, a former Cambridge Analytica employee Christopher Wylie, the company used user data without their consent to conduct the targeted marketing in order to sway the voters intentionally (Cadwalladr, 2018). Furthermore, social networking giant Facebook also allowed the company to gather this user data for their data mining and which as a result also demonstrates Facebook’s shortcoming in this case as well (Dinha, 2018). Nevertheless, despite acquiring user data access from Facebook, they have breached the data privacy of the users or victims of their psychological profiling mechanism. Thus, despite succeeding in the serving of their customers or political parties over the years, the exploitation of this business opportunity was heavily flawed as their means to attain which were unethical and morally questionable.
2.0 Actions from CEO Alex Nix which could have saved Cambridge Analytica
In order to understand what the CEO Alex Nix could have done in order to mitigate the issues leading to the scandal in 2017, it is important to understand what had happened in the first place. According to a NYTimes reporting, Rosenberg et al. (2018) have stated that the CEO of the company, Alex Nix has always emphasised the lucrativeness of the political campaign consultancy business model. However, Nix’s motive was to bring something new or uniqueness to this domain in order to develop a unique value proposition for the Cambridge Analytica among the politicians or their campaign runners. This is why Nix was interested in psychologically influencing the voters but Nix required access to behavioural and psychological data of the masses (Rosenberg et al. 2018). Psychographic profiles were available from data firms but those kinds of data used the purchase history of the consumers to predict their political beliefs and they were insufficient for Cambridge Analytica as they were useless to determine psychological traits in order to design individual directed influential political messages.
(Source: NYTimes, 2018)
In this regard Cambridge Analytica almost hit a gold-mine once they found Aleksandr Kogan, an academic researcher in the Psychometrics Centre of Cambridge University as Kogan already had thousands of psychographic profiles and an active mechanism to gather data to develop such profiles as well. To simplify this, Kogan had developed a personality quiz app for Facebook which paid Facebook users a small amount of money if they had taken this quiz, which not only captured the response but their private information as well as private information from others’ profiles from their friends list as well. This mechanism helped the company to gather 50 million Facebook users’ data to develop an enormous psychographic profile bank for the company.
(Source: NYTimes, 2018)
Now, if we evaluate the Cambridge Analytica’s psychometric profiling mechanism, it can be said that their actions were unethical. Because, research data gathered by the academic researcher Aleksandr Kogan was for research purposes and should not have allowed Cambridge Analytica to utilise that data for political influence. Therefore, Alex Nix should have acquired the data from sources who had used ethical channels to acquire such data because data acquired by Kogan were gathered without the users’ consent as other than their response to their facebook surfing history such as page likes, comments were utilised for this psychometric profiling.
2.1 Actions could have been undertaken by CEO Alex Nix after the scandal broke
According to Baines et al. (2017), in the contemporary business world the incorporation of sustainability and ethical practice is important for every business whose intent is to thrive in the market. However, once the scandal broke as Channel 4’s sting operation revealed Cambridge Analytica’s unethical practices and catered mass concern globally, Nix astonishingly released a public statement that Nix is a victim of entrapment sting conducted by the journalists at Channel 4 (Satariano, 2018). This incident and behaviour from Nix’s end further damaged the company’s name among the masses as rather than issuing an apology Nix attacked the people investing him and his operations. Furthermore, Nix also declined to talk about how they gathered this humongous and accurate data in short time and this as a result further damaged the company’s identity among the public.
Now, Nix could have handled the situation in a more responsible manner as according to Schau et al. (2009) business practices create brand value among the customers or the masses. However, Nix’s behaviour following the public release should have demonstrated his cooperation in order to disseminate the information about the breach of individual privacy and should have raised awareness, this actions as a result could have contained the fallout of the situation and may have saved their brand identity in the market.
3.0 Author’s view about the value of data for influencing public decisions
The study of this entire incident and evaluation of gathered knowledge about this incident revealed that CEO of Cambridge Analytica Alex Nix with the help of academic researcher Aleksandr Kogan gathered the required data for the preparation of 50 million individual psychometric profiles. Now in the modern era, marketing depends on data science in order to predict consumer behaviour and there is a whole industry operating to develop this big data (Ge et al. 2017). This data mining firm acquires user surfing data, their online shopping pattern in order to predict their tendencies while they are shopping and shows similar products or service advertisements to influence them to purchase. According to Jobber and Ellis-Chadwick (2012), this has become a common practice from the marketing organisations and advertising firms. However, they also argued that this individual data gathering to predict consumer behaviour is only ethical if they do not harvest any personally identifiable or private information but only their purchase and surfing pattern.
(Paul, 2018)
In this scenario however, Cambridge Analytica used unethically acquired individual data for psychometric profiling and not only that, they also utilised this profiling to target them using political messages and news patterns to influence their political beliefs according to Cambridge Analytica’s computer driven preference (Youyou et al. 2015). This data mining and analysis method is completely different from the marketing big data analysis as Kogan’s algorithm not only predicted their political belief but changed their perception about political figures and changed their voting pattern as a result. This practice as a result raises massive questions against the company’s community values. As stated by Altschuller et al. (2008), corporate social responsibilities or CSR is not only limited to the preservation of public or consumer rights affected by a business’ operations but in return also attracts more customers as these practices enhances brand value, cementing the long term success for the business. However, in this case Cambridge Analytica has failed to demonstrate minimum CSR value as they not only invaded the privacy of the masses but also exploited them by systematically influencing their political standpoint. This as a result raises questions against the very foundation of democracy as the perception or decision of individual voters were psychologically transformed.
Although this incident demonstrates adverse impact on the society as their data were used without their consent and their perception and decisions were transformed using psychological mechanisms. However, this incident has a positive side as well, because the global coverage of this scandal has raised global concern about privacy not only among the general public but among the lawmakers as well (Lapowsky, 2019). Furthermore, due to the unethical practice of data privacy in the data mining industry, the EU has focused into the enhancement of online privacy (Yun Chee, 2019). This legislative development in this domain is delayed but with the incorporation of enhanced GDPR legislations it is expected to protect the EU citizens against future data breaches and privacy invasion.
4.0 Service provided by Cambridge Analytica in Trump’s presidential campaign
According to the Channel 4 investigation on Cambridge Analytica, apart from Donald Trump’s campaign they have provided their similar service in more than 200 campaigns around the world (Channel4, 2018). Leaked documents from the Trump’s campaign revealed various information of how Cambridge Analytica developed a blueprint for the entire US presidential election in order to ensure Trump’s victory (Lewis and Hilder, 2018). These documents and several information about Cambridge Analytica’s involvement into the Trump’s campaign came to light because of another whistleblower Brittany Kaiser, who is a former employee and worked on the Trump’s campaign. Kaiser revealed that they used performance optimisation algorithms and data modelling to target 10,000 different advertisements developed for different psychometric profiles. These advertisements supporting Trump targeted these users every time they surfed the internet in order to gain their support for Donald Trump.
(Source: Lewis and Hilder, 2018)
In this campaign Cambridge Analytica utilised Kogan’s personality quiz application to gather data and then they were utilised by the company to develop psychometric profile for the US Facebook users. Supporting Kogan and company’s CEO Nix’s involvement a former employee Wylie had released an email showing personality traits and political affiliation this psychometric profiling algorithm could develop (Rosenberg et al. 2018). According to the investigation of Lewis and Hilder (2018), days before the election day two different ads were promoted on YouTube home page and they were shown based on viewers’ geographical location. Geographical areas where psychometric profiling suggested majority of Trump supporters were shown triumphant looking Donald Trump while geographic location with not fervent Trump supporters were shown celebrities or high profile supporters in favour of Trump.
(Source: Rosenberg et al. 2018)
4.1 Ethical evaluation of the Cambridge Analytica’s role in the campaign
These manipulative actions to promote then-US presidential candidate Donald Trump as a widely regarded and right presidential candidate were successful as they were designed to transform individual views about Trump. However, these marketing campaigns were manipulation of public views as not only their privacy was invaded by the company but their data were reverse-engineered to design impactful ads to change their view about Trump.
(Source: Lewis and Hilder, 2018)
Furthermore, their ‘persuasion search advertisements’ also used paid advertisements in the search result on leading search engine Google. This as a result not only manipulated the search results but manipulated the public’s perception about Trump and other presidential candidates. As a result, their malpractice raises questions about ethics against the Cambridge Analytica’s operations or political marketing campaigns as they not only changed public perception about Trump but also disseminated malinformation through search engine result manipulation mechanism.
According to Fogg (2008), mass interpersonal persuasion or MIP allows a brand to change the attitudes as well as behaviours on a massive scale using the social networking websites. However, practices by Cambridge Analytica during Trump’s campaign were not persuasive but their practices were rather manipulative as they intercepted the dissemination of knowledge or information and transformed them in favour of Trump on every online platform (Duggan and Veneti, 2018). Therefore, Cambridge Analytica’s service in the Trump’s campaign was not right due to their unethical practices during the campaign.
5.0 Interrelation between public goodwill and data-driven business model
According to Fuchs and Diamantopoulos (2010), brand identity is dependent on the perception about a brand among the masses. Therefore, development of public goodwill plays an immensely key role in the development of a brand’s value and identity in the market. However, Moro Visconti et al. (2018) states that companies working with big data, data mining and other data-driven business models suffers from mishaps due to malpractices by organisations using the public data. Furthermore, they also state that modern data-driven industry’s value is not dependent on tangible assets as goodwill, which is widely regarded as an intangible asset also equally important in the valuation of a data-driven business or organisation. Public goodwill plays a major role because market reputation is the brand value for a company and positive interactions among the customers about the brand financially benefits the company and its stakeholders.
Due to the rise of social media platforms and online marketplaces, big data analysis and data mining has become a flourishing industry as big data has revolutionised the marketing and advertising industry. As predicting the consumer behaviour and persuading them to purchase products from certain brands have become easier and more cost effective due to the incorporation of target based persuasive advertisements (Matz et al. 2017). However, due to the concept of ARPU or Average Revenue Per User by the sites such as Facebook, YouTube, Instagram, they are acquiring every relevant user data such as their location, relationship, like history or preferences, credit card information and so on. These data are then sold to the advertisers as big data and then they are analysed to develop pattern and development of persuasive marketing campaigns. Al-Badi et al. (2018) states that these data are often misused due to the low to nil governance on digital data. However, due to the rising concern about the big data because of scandals such as Cambridge Analytica the advancements in the legislations about big data has transformed the public perception about targeted marketing using surfing data. This is why due to the public outcry about personalised data gathering, storing, reselling and usage, securing and anonymisation of such data should be the top priority for the companies operating in the data-driven industry. Because, as the public is now more aware about data gathering and its implications, any data-driven business’ decisions reflect their core values about the consumers. Thus, how they pursue their data-driven business model is the valuation of their public goodwill or reputation.
6.0 Challenges being faced by Facebook as a brand
Due to the massive negative media and public attention towards Facebook due to the scandal of Cambridge Analytica and how they harvested Facebook user data. The privacy invasion on 50 million Facebook users or profiles by Cambridge Analytica has brought Facebook under a lot of scrutiny and these scrutinies have revealed several legally and ethically questionable practices by the company. According to Carnahan (2019), due to the US and EU investigation over the company’s practices regarding user data has brought three key issues to light and they are Antitrust due to their anti-competitive practices, Content Moderation due to prevalence of targeted political ads on the platform and importantly Data Privacy due to multiple privacy violations.
These issues are the key challenges for the company on both ethical and legislative ground and in order to redeem their position and brand value among the masses, Facebook now have to demonstrate their resilience against organisations such as Cambridge Analytica. As stated by Mark Zuckerberg himself they are required to build the trust among their users once again by developing a transparent user data policy on their platform (Kang and Roose, 2018).
6.1 Implications of these challenges and the case of Cambridge Analytica on Facebook
This incident of Cambridge Analytica and how they accessed not only the users who had undertaken the personality quiz developed by Kogan, but the data from other users from that individual’s friend list. This as a result, demonstrated the security flaw in the privacy system of Facebook and also how Facebook allowed any third party app-developers to have access regardless of their usability in the app. Therefore, in order to mitigate any future recurrence of privacy invasion and implementation public perception manipulation based on the data from their platform, they need to develop a more enforcing privacy moderation system. Furthermore, Facebook now allows its users to see what personalised data they have on the user and what advertisers see, which is in fact a right step in the right direction for the company as it will help them to rejuvenate their brand identity in market once again in the future.
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