Facebook says new privacy feature may dent revenue

Bloomberg

Facebook Inc. is making good on a promise the company made following last year’s Cambridge Analytica scandal: It finally finished a feature that will let users separate their internet browsing history from their personal profiles.
The move is a risk for the world’s largest social media company because it could make Facebook advertising less accurate and potentially less valuable for marketers. Indeed,
the executive leading the project, David Baser, said Facebook expects it to “decrease top-line revenue to some degree.”
The company is unveiling “Off-Facebook Activity”, a feature it previously called “Clear History,” and one that Chief Executive Officer Mark Zuckerberg first announced in May 2018. The tool enables users to disconnect their Facebook profile from web browsing data and other information the company collects from outside apps and sites.
Facebook scoops up this data in a number of ways, including through tracking software that developers voluntarily add to their websites and apps. This helps make Facebook ads more effective: If a retailer knows what items you click on their website, they can re-target you with ads for those products on the social network.
But the system is not well-understood by users. Off-Facebook Activity is meant to clarify some of this by showing people what Facebook has collected, and offering a way to remove it. Users will have to proactively seek out the new feature in their settings, where they’ll see a list of companies and websites that have shared data with Facebook. Users then have two main options:
Clear all browsing data from their account, which means it will no longer be used for ad targeting.
Tell Facebook to stop linking this data to their account moving forward. Users can do this holistically, meaning no browsing data will be linked from any app or website, or halt that data pairing for specific apps and websites.
In either instance, Facebook will continue to collect data about people’s browsing activity, and store it on company servers. It just won’t tie that data back to a specific user.
Facebook does not have a reputation for building comprehensive, easy-to-understand privacy features. The company recently announced a $5 billion settlement with the Federal Trade Commission over questionable privacy practices. Many of those lapses came to light after an outside developer sold the personal data of millions of Facebook users to Cambridge Analytica, a consultancy working with Donald Trump before the 2016 presidential election.
The social media giant hopes to change perceptions with Off-Facebook Activity. The feature includes numerous links and additional sections intended to explain why Facebook has certain information, what it uses it for, and where it came from, according to a product demo shared with Bloomberg. That will only matter if people actually use Off-Facebook Activity, and go out of their way to find it in Facebook’s settings. The company says it will run an advertising campaign both on Facebook and in print to tell people about the tool.
If people do use it, it could pose a challenge. The company makes most of its revenue from targeted ads, and decoupling browsing data from a user’s profile will make it harder to show users relevant ads. Baser, the product executive in charge of the new tool, said that when he cleared his off-Facebook activity, his ads were “pretty terrible.”
“I got a bunch of ads for tennis, which is a sport I haven’t done in 14 years, because it’s on my Facebook profile as an interest,” he added.
Facebook has used a version of this argument before: More information creates better ads, which makes Facebook a better experience. But it’s also a sign that, if people were to adopt this new feature en masse, Facebook results may suffer. Irrelevant ads are bad for users, but also bad for advertisers who won’t get as many clicks or conversions.
“We do anticipate that this will decrease top line revenue to some degree,” Baser said.
All of that is hypothetical for now. Millions of users will need to find the new feature and activate it before it’s clear if it even makes a difference. Facebook is rolling out Off-Facebook Activity in South Korea, Spain and Ireland, with plans to bring it to other countries soon after.
The feature, which Facebook said took longer than expected due to technical hurdles, does have limitations. Those who use Facebook’s Login feature to sign into outside apps, for example, cannot separate the data collected from that app from their profile, according to Baser.
Users also can’t clear browsing data on a case by case basis — that is, you can’t remove a specific web interaction from your account, or remove the browsing data from one particular app or website. Everything must be cleared together.