Privacy vs. Marketing: Changing Dynamic of Social Media
DES MOINES - Social media users in Iowa soon could qualify for a loan based on the personal credit scores of their friends.
Facebook recently announced a patent that allows lenders to make loans based on a borrower's social-media connections. Neil Kokemuller, a digital-marketing professor at Des Moines Area Community College, said it's the latest move in the changing dynamic of social media as companies move away from passive advertising to more immediate ways of connecting with people.
"Until younger audiences especially are a little bit more resistant," he said, "I think companies are going to kind of push the envelope and continue to look for new ways to use demographic information and other things they find out about people for profit."
Kokemuller said social-media companies are gathering as much data as possible to become more efficient in their targeted advertising. He adds mobile marketing is another new strategy where companies send messages to smartphones. But typically consumers must agree to opt in to these new advertising techniques, so Kokemuller recommended always carefully reading the fine print in privacy notices.
Facebook is not alone, Kokemuller said, with search engine Google also at the forefront of those pushing the boundary between marketing and consumer privacy.
"Our students notice when they go and do searches for different products or topics or things online," he said. "Pretty quickly they start to see banner ads and other advertising that hits them based on the things that they've searched for."
With personal finances among the information consumers want most protected, Kokemuller said he expects Facebook to wait before moving ahead with the lending patent.
"They're probably going to gauge the response and decide from there whether to actually pursue this," he said, "because a lot of times when companies get patents, it's more based on the potential that something has and it's not necessarily a firm commitment to go in that direction."
He pointed to a failed attempt by Facebook to allow Netflix to share movie recommendations, with the company nixing the plan after too much negative user reaction.