For one in seven people alive today, Facebook is their window on the world. More than one billion of them log onto the social network on their mobiles each and every day.
Facebook knows their hopes, dreams, secrets and fears. It knows who their friends and family are and what they look like. It knows what interests them and who they are likely to vote for.
Armed with this vast amount of information about the real-time behaviours, likes and dislikes of users, Facebook will have a very good picture of personality and attitude towards risk. That insight will become increasingly valuable, as we shall see.
This week, the insurer Admiral announced plans to use Facebook to help set car insurance premiums for new drivers via an app, which would read social media posts. It said: ‘New drivers are often quoted much higher insurance premiums as they have little driving history, zero no claims bonus and are viewed as “high risk”.
‘But we want to help make sure safe drivers aren’t penalised and get the best price possible. To do this, we will look at your Facebook profile to help us get a better understanding of what type of driver you are. There’s a proven link between personality and how people drive, and our clever technology allows us to predict who is likely to be a safe driver.’
Admiral said that only a ‘snapshot’ would be used, while media reports suggested the insurer would also analyse writing style and the use of calendars and accounting tools to determine risk.
The news triggered outrage from the usual suspects. Renate Simpson, the chief executive of Big Brother Watch, was reporting as saying: ‘It’s terrifying. Kids are going to be handing over information with no real knowledge about how it is going to be used.
‘How can you really tell if someone is a good or bad driver based on your Facebook page?’
To answer the question, pretty easily. Quite simply, studying troves of historic data yields insightful patterns of probabilities based on previous responses.
It is already happening in other fields. The Yorkshire-based sports analytics start-up, Equotion, has developed predictive technology to analyse vast amounts of horse-racing data to accurately select tips. Its software combs through hundreds of millions of pieces of information to single out the runners and riders most likely to win.
As it turned out, Admiral’s plans rather limped out of the gate after Facebook issued a stern response.
Facebook said: ‘Protecting the privacy of the people on Facebook is of utmost importance to us. We have clear guidelines that prevent information being obtained from Facebook from being used to make decisions about eligibility. We have made sure that anyone using this app is protected by our guidelines and that no other Facebook user data is used to assess their eligibility.’
Suitably cowed, Admiral said its app would launch with reduced functionality. This sideshow of a story gave Facebook the chance to trumpet its consumer protection and privacy credentials. In fact, the Silicon Valley behemoth has a poor record in this field. It has come under fire for censorship, such as the taking down of a breast cancer awareness video in Sweden and the iconic ‘napalm girl’ photo from the Vietnam war. It overestimated video viewing statistics by up to 80 per cent. And a few days ago, European privacy watchdogs expressed ‘serious concerns’ over messaging app WhatsApp sharing user data with its owner Facebook.
These signs show that Facebook is yet to be fully deserving of anyone’s trust. And yet 1.1 billion people are drawn to its siren song every day. Overnight on Thursday, Facebook warned that growth in advertising revenues will slow ‘meaningfully’ in the coming months due to a limit on the number of ads it could show in people’s timelines without alienating users. Wall Street analysts believe the slowdown will compel the group to develop new revenue streams.
Expect that everything Facebook knows about you, your family and your friends to be at the heart of those plans.
Bernard Ginns is the founding director of www.branksomepartners.com and was Business Editor of The Yorkshire Post from 2008-2016
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