UPDATE: Facbeook has responded with some clarifications to their privacy controls: "We require our partners to honor opt-outs that they receive when placing bids through Facebook Exchange, so people who use 'web-wide privacy controls' will have their wishes honored through Facebook Exchange. So while it is true that we currently do not show the DAA icon, it's not the case that our product simply ignores opt-outs...we require partners to offer opt-outs and honor opt-outs received elsewhere through FBX. The piece refers to controlling how user behavior is used to target ads on other websites, which might imply that Facebook Exchange partners track behavior on FB for targeting in non-FB ads, which is something that we prohibit.
The industry response to mounting privacy concerns surrounding online advertising, cookies and personal behavior has been self-regulation - but what happens when the number 1 purveyor of display ads on the Internet doesn't play along?
The Digital Advertising Alliance bills itself as the Self-Regulatory Program for Online Behavioral Advertising, a program where advertisers come together to provide consumer controls to the how, where and when their online behavioral data can be used to deliver targeted online advertisements.
Consumers are presented with the AdChoices icon in each ad, and can click through to learn more about how their data is used. In two to three clicks, they can then limit access to their browsing history. With the majority of ad exchanges participating, the icon is everywhere.
Yet Facebook remains walled off from any sort of advertising controls, relegating the now-ubiquitous Advertising Option Icon to the low-engagement dustbin of the everyday Internet. Beyond the network's proprietary controls, Facebook users have zero ability to control their privacy settings and how their behavior is used to target advertising on other websites.
This lack of user control is turning out to be one of the most lucrative - and contentious - facets of Facebook's post-IPO business. First, there was a $15 billion lawsuit filed just after Facebook's IPO, charging that Facebook was tracking user behavior even after they had logged out.
Which was then all-but-confirmed by the announcement of the Facebook Exchange - essentially a retargeting marketplace where advertisers could target particular users exhibiting specific behaviors.
Several of the biggest ad-buying companies that subscribe to DAA principles are also big buyers of Facebook ads: Criteo, Turn, AdRoll and AppNexus, among others.
Despite the lawsuit, Facebook's new hoard of investors are pressuring the company to turn a profit quickly. The Exchange is key to monetizing the billion plus users in an effective, engaging and ROI-driven way. In initial tests, TechCrunch found a 16x return for advertisers using the Facebook Exchange, making it a particularly lucrative
Unsurprisingly, Facebook has implemented their own sort of privacy controls to give users authority over how their behavior is used and by whom.
In order to opt-out of behavioral ad targeting, users must first hover over the ad to reveal a small 'x' that in turn reveals an 'About this ad' statement. By clicking on 'About' users can then opt-out - but only if the company offering the ad via the Exchange allows users to opt-out.
When AdChoices offers only a few steps to opting out, this obfuscation calls into question Facebook's true commitment to granular privacy control for its users.
In addition, the point of an industry-standard agreement is that it is, well, standard industry-wide. Facebook has a vested interest in providing the most effective, meaning the most lucrative, ad messages for the advertisers that are the lion's share of the company's revenue.
Users of free products must always remember that there's usually a few reason said product is free - one of which is that the user is the product being sold. It's a precarious balance, and at some point the risk of mass user flight becomes very real if the balance tips away from the user experience in favor of the advertiser's.
For travel brands relying more heavily on the content marketing power of Facebook's masses, an awareness of inherent privacy concerns is essential to protect the long-term investment in the social media network.