Silicon Valley. The land of the Unicorn?
Silicon Valley. A much loved sitcom created by HBO, featuring four techies whose aim is to get rich quick, and smart. But Silicon Valley is more than just a programme. Silicon Valley can be found in Southern San Francisco, and is home to pretty much every one of the world’s most dominant Tech firms.
For a long time, Silicon Valley has been living one hell of a high. Companies such as Snapchat became real life living ‘Unicorns’, raking in zero profit, yet being valued in the billions. Companies that had started off in Garage Units had their logos emblazoned across Wall Street as they took on the Stock Market. Even worldwide Governments got their budgets involved, promising millions of pounds in revenue to aid the development of self-driving vehicles, all in the Palo Alto postcode.
So what could possibly go wrong?
Well, even the proverbial ‘Golden balls’ of an industry can fall short now and again, and falling short is something a few major players have done spectacularly recently. Let’s take a look at a couple of the lowlights;
Online retailing supremo Amazon got a rather smacked wrist this week, from none other than the Advertising Standards Authority (ASA). Amazon have only just started to really get stuck into advertising, and this may be a decision they come to regret. So what went wrong?
A recent Amazon advertisement took the style of a ‘price comparison site’. The advert displayed items that could be bought in a number of places, and showed how much that item would cost. Guess who was cheapest every time?
Now the issue here for the ASA was not the fact that Amazon came up trumps. We all love a winner. But was in fact due to the fact that Amazon only displayed their deal prices, and not the products genuine RRP.
Amazon have now been ordered to edit the advert, to ensure accurate prices are displayed. The question is, will the punch line be quite as powerful now?
Naughty, naughty Facebook. Mark Zuckerburg, Facebook Co-Founder and CEO usually shuns the limelight. But this month, the poor guy has been up to his neck in it.
So why? In the final quarter of 2017, Facebook was being actively used by 2.2 billion people worldwide. As a business and a service, it truly is a global phenomenon. Sounds great doesn’t it? What could possible go wrong?
Having a customer base of that size is great, but as well as offering a fast and innovative service to keep the punters coming back, it’s also a huge amount of people whose data has to be kept safe. And this good friends of Dabbl, is where the fun starts.
Enter Cambridge Analytica, a firm who used data scrapes in the disguise of quizzes to gather the data of 87 million Facebook users. We’ve all been there on a Tuesday morning, staring into space and wondering – ‘just what Star Wars character would I be?!’. Well Cambridge Analytica heard those cries, and they took full advantage.
So what did they want with this hoard of customer data?
Data to a business is invaluable, to a marketer it really is….well, the marketers dream. Cambridge Analytica had rather sinister ideas. During the 2016 US election, the data of these 87 million users, (mostly US based we might add) was used to determine behaviour, personality and most importantly voting traits. This was then used to ensure the right people were served the right ads, and quite scarily, the right divisive content.
This has quite rightly landed right in the lap of Facebook, who should have seen a trick like this and laughed it off the newsfeed.
So what now?
A major investigation took place at Facebook, where even they were shocked at the sheer scale of the Cambridge Analytica operation. Initially, they thought only 50 million users had fallen victim to the data hack. (Sarcasm well and truly intended).
However, credit where credit’s due. Rather than dwell on any form of ‘it wasn’t our fault agenda’, Facebook have dived straight into the pool of ‘let’s find a solution’. And the solution could cost them a fortune. As of May 25 th , Facebook will no longer let advertisers use third party data. (I.e. Data that has been bought and then used to target people on their feeds). This is something that currently makes Facebook an incredibly successful and lucrative advertisement platform, and so media buying agencies worldwide are somewhat up a creek, and they didn’t pack their paddle.
Keep an eye on Facebook over the next few weeks, watching how their Stock performs. Big firms like this are bound to take hits over the years, but in the words of our main man Rocky, it’s how they keep moving forwards that matters.
*All data is taken from Reuters and Carat Media
For information purposes only, not intended to constitute any financial advice from us. The customer should assess the risk of potential loss carefully and individually before investing any financial products. Dabbl Group Limited is authorised by the FCA under the reference number 767263 as an appointed representative of its Principal firm VIBHS Financial Ltd, which is authorised and regulated by the Financial Conduct Authority under the reference number 613381.
Written by Emma Burroughs.