A dangerous idea married to a dangerous technology

Forbes recently published an article on Facebook about its potential legal action against a relatively unknown company, The Spinner.  According to Forbes, The Spinner has been using Facebook to make money.   The Spinner’s technology targets individuals with the intent of changing their opinions and behaviour.  In the instance that offended Facebook, The Spinner’s customers were online gaming companies who wanted their customers to play more often and spend more money.  Quoted in the article, The Spinner claims its advertising is successful and the targeted gamblers visit the gambling sites more frequently while spending more per visit.

There is much debate now about Facebook and the advertising on its platform.  CEO Mark Zuckerberg gave a speech at Georgetown University on October 17th, defending the company’s policies.  Zuckerberg painted a bright picture of Facebook’s humanitarian goal of creating more connection between people.  In his mind, Facebook gives all people a voice, at least its two billion users.  To an outsider, Facebook’s mission seems quite different; it is simply a for profit business.  Facebook makes money by selling advertising.  It promises advertisers a pre-qualified audience.  The people most likely to use the product are recognized by the company’s algorithm; those people then receive the appropriate advertisements.  The process is hidden from view, but most people have direct experience with the concept.  Shortly after searching for a particular product or company online, that company’s ads appear on the person’s Facebook page.

It is apparently a successful business model. Wikipedia lists Facebook’s 2018 revenue as $55.8 billion, a net income of $22.1 billion and $97.3 billion in assets.  Mark Zuckerberg’s personal net worth is listed as $73.6 billion.  It is therefore not surprising that The Spinner and thousands of other companies and organizations look for a way to use Facebook to generate revenue.  The list of advertisers using Facebook includes the nation’s political parties, largest corporations and local/regional businesses and organizations.  Its ubiquity has made Facebook part of our political debate.  Calling for regulation and control of social media has become a political platform.  Facebook’s ability to reach into people’s lives has also led to litigation. The state of Illinois recently won a $35 billion lawsuit against the company for its secretive use of facial recognition technology.

Facebook is moving from being an innocuous meeting place for friends to a public demon in the eyes of many.  Steve Kovach writing for CNBC says, “In general, that algorithm is designed to keep users sucked in, and the best way to do that is showing them stuff that will engage, enrage or feed their biases.”  That is probably an overstatement, but it does contain some truth, Facebook does know how to keep people engaged.  That is what The Spinner sold to its clients, “We will use Facebook and even more targeted techniques to bring gamblers to your website.”  The Spinner also directs personal advertising meant to have wives more receptive to sex, willing to watch television or even agree to a divorce.  It certainly does not have the highest moral standards.  But that is not the problem, the problem lies in the technology and its potential to be used in anti-social ways.

Regardless of whether you are for or against Facebook, it does use technology to induce people to change behaviour through advertising.  But of course, that is the job of advertising, to entice people to do something specific.  Advertising is not new and in the past it was not always effective.  However, today on social media, mathematics has allowed the underlying interests and motivations of people to be better understood.  Now an advertiser knows what perspective buyers like and the things that motivate them.  It is a dangerous place for all of us, but it is a crucial juncture for the gaming industry.

The technology now exists to allow gaming companies to target their customers.   The customers can be induced into gambling more, in theory right up to edge of their ability to pay.  It is tempting.  The industry is still using concepts from print media and bricks and mortar businesses.  That is no longer the environment; social media and large databases give gaming companies a greater ability to target players with a history larger than average spending on gambling.  It would be wrong not to temper that ability and thinking with some caution.  There are two reasons for caution. First, it is a better business model.  The customers most likely to be targeted are the “best” customers.  They are the loyal players that come often and like to gamble.  They are the foundation of any casino’s business.  To treat them like data points and not as individuals is to risk destroying them financially and to lose their business forever.

Second, like Facebook and The Spinner gaming is always in danger of becoming a target for restrictive legislation. Gaming’s public image has improved dramatically over the last half century, but it is still seen in the public discourse as a questionable activity.  It has always been important for gaming companies to be cognizant of their customers lives and limitations for both business and political reasons.  But now it is even more so with the growth of aggressive technology.  The technology is dangerous and has the potential to harm both the using companies and their targets.  Facebook may be able to convince government that it is capable of self-regulation, but gaming would never be successful with that tactic.  It might be time to switch caveat emptor, let the buyer beware to let the seller beware of its power.

By Ken Adams