Is Facebook a Brand that You Can Trust?

Isn’t it about time that we started holding our online brands to the same standards that we hold our offline ones?

Case in point, consider Facebook. In Facebook’s relatively short life, there has been the Beacon Debacle (a ‘social’ advertising model that only Big Brother could love), the Scamville Furor (lead gen scams around social gaming) and now, the Privacy Putsch.

By Privacy Putsch, I am referring to Facebook’s new ‘Privacy’ Settings, which unilaterally invoked upon all Facebook users a radically different set of privacy setting defaults than had been in place during the company’s build-up to its current 350 million strong user base.

To put a bow around this one, the EFF (Electronic Frontier Foundation), not exactly a bastion of radicalism, concluded after comparing Facebook’s new privacy settings with the privacy settings that they replaced:

“Our conclusion? These new ‘privacy’ changes are clearly intended to push Facebook users to publicly share even more information than before. Even worse, the changes will actually reduce the amount of control that users have over some of their personal data.” EFF adds that, “The privacy ‘transition tool’ that guides users through the configuration will ‘recommend’ — preselect by default — the setting to share the content they post to Facebook, such as status messages and wall posts, with everyone on the Internet, even though the default privacy level that those users had accepted previously was limited to ‘Your Networks and Friends’ on Facebook.”

Ruminate on what that means for a moment. You are a parent, and you regularly upload photos of your kids to Facebook, blithely assuming that they are free from the roaming eyes of some sexual predator. While previously, these photos were only viewable to the Friends and Networks that you explicitly connected with, now, without consulting you, Facebook has made your son or daughter’s pictures readily accessible to friend or felon.

Or, perhaps you are a typical ‘thirty something,’ sharing your weekend escapades with what you thought was a bounded social circle. Now, your current or prospective employer is just a click away from concluding that, perhaps trusting the company’s marketing department to you is not such a good idea after all.

So as not to split hairs, let’s just agree that some potential existed for either of these scenarios to have occurred under the old privacy model, and also worth nothing, if you actually understand what these new settings mean to your world, you can reverse (many of) these settings.

But, that’s beside the point. Why? Because three separate instances now (i.e., Beacon, Scamville and Privacy Settings) have underscored a tendency of Facebook to not only make fairly key strategic decisions without first engaging it user base in a bi-lateral dialog, but to make decisions that are decidedly at odds with consumer protection/interest.

On a human level, one can look at the new privacy changes as akin to going to sleep at night with the assumption that the various doors and windows of your house were locked, only to wake up and realize that while you were sleeping, the ‘locksmith’ decided that you/they were better served if the doors were left unlocked.

Upon waking up to discover this unilateral decision, would you be pissed? Would you trust the locksmith to keep you safe at night going forward?

One last example before I move on, here’s another excerpt from EFF’s analysis on the ‘Good, Bad and Ugly‘ of the new privacy settings:

The Ugly: Information That You Used to Control Is Now Treated as “Publicly Available,” and You Can’t Opt Out of The “Sharing” of Your Information with Facebook Apps.

Specifically, under the new model, Facebook treats information, such as friends lists, your name, profile picture, current city, gender, networks, and the pages that you are a ‘fan’ of — as ‘publicly available information,’ a new definition of heretofore personal information that Facebook held off disclosing in any material way — until the very day it was forcing the new change on users.

Blogger Jason Calcanis puts this policy in perspective in his excellent post, ‘Is Facebook unethical, clueless or unlucky?‘

I’m sorry, what the frack just happened? I turned over my friend list, photos and status updates to everyone in the world? Why on earth would anyone do that with their Facebook page? The entire purpose of Facebook since inception has been to share your information with a small group of people in your private network. Everyone knows that and everyone expects that. In fact, Facebook’s success is largely based on the face that people feel safe putting their private information on Facebook.

Do with this information what you will (forewarned is forearmed, after all), but me personally, after reviewing each Facebook photo album of mine with personal, family and/or friend oriented photos within it, I couldn’t help but feel that Facebook should be given a new name: Faceless Betrayal.

Some Relativity from the World of Offline Brands: Perrier and Tylenol

I read an interesting stat in Fast Company about the US Bottled Water Industry. Americans now spend more on bottled water than they do on iPods or Movie Tickets – $16B dollars.

Now, think back to 1989. Perrier Water was the imported water market leader in North America, with an eponymous water product marketed as ‘naturally sparkling’ water sourced from a mineral spring in the south of France.

But then, Perrier ran into serious trouble when the noxious, cancer-causing agent, Benzene, was found in the water that Perrier sold in the United States.

Seeking damage control, the company gravitated between silence and evasiveness, with Perrier initially stating that the problem was an isolated one, when in actuality, it had turned out to be a global issue.

Perrier’s ultimate mistake, though, was responding to a serious brand integrity crisis in a less than above-board, consultative fashion with its customer base.

The net effect is that, despite a massive global boom in bottled water consumption, a once-trusted, dominant brand, in essence, collapsed. In the end, Perrier’s sales fell in half; the company was later sold, and the brand never recovered.

By contrast, when seven people died after taking cyanide-laced Extra-Strength Tylenol capsules, the company did a massive education and outreach effort, culminating with the recall of 31 million bottles of the product, at a then-cost of $100M. Like Perrier, Tylenol’s market share initially cratered.

But, because the company had been proactive, public and always acting in the best interests of its consumers, within a year, its share had rebounded dramatically, and within a few years, had come all the way back.

The moral of the story is that two companies faced crises that threatened to kneecap their brand, but only one maintained a consistent focus on living up to the trust that its customers had put in the brand. Tellingly, the market rewarded the brand that was truest to its customers (Tylenol).

Netting it out: In light of the company’s past consumer-unfriendly initiatives, Facebook’s privacy settings change should serve as a wake up call to its 350M users that they are entrusting a Fox to guard the Hen House; a truth that is destined to erupt into a crisis for the company. Will they handle it like Tylenol or Perrier?