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Summary:

Coca-Cola’s decision to pause and rethink their involvement with Facebook’s Beacon advertising program was a big topic of discussion over the weekend in this corner of the Internet we call the blogosphere. It was a particularly shocking reversal given that Coke was one of the landmark […]

Coca-Cola’s decision to pause and rethink their involvement with Facebook’s Beacon advertising program was a big topic of discussion over the weekend in this corner of the Internet we call the blogosphere. It was a particularly shocking reversal given that Coke was one of the landmark partners of Facebook’s new social advertising effort. Coke, to put it bluntly, threw Facebook under the bus, essentially shirking away from their own role in the Beacon controversy, much like 44 other partners who teamed up with Facebook.

“We have adopted a bit of a ‘wait and see’ as far as what we are going to do with Beacon because we are not sure how consumers are going to respond,” Carol Kruse, Coke’s vice president of global interactive marketing, told The New York Times. She thought Beacon was an opt-in program. “That’s what I heard before as well as what I heard on the 6th.” Not sure about about you, but I ain’t buying Coke’s excuse.
Kruse’s comments led me to these questions:

1. Did Facebook lie to Coke?
2. Did Coke get snookered?
3. Or both?
4. Did Coke really ask all the right questions about privacy, opt-in and automatic enrollment before signing on?

How did Coke or Verizon or Blockbuster expect this data would be collected? In fact, did anyone really ask the tough questions of Facebook? Because if they did, then they all were very well aware of what they were signing up for. And if they didn’t ask the right questions, well…why didn’t they? I guess big dollars signs clouded common sense.

Some potential partners Facebook tried to sign up before launching Beacon, asked the opt-in vs. opt-out questions, and in the end decided to stay on the sidelines because of concerns for the privacy of their community. All of the partners — everyone from Overstock to Blockbuster to Fandango — are equally complicit in this mess.

In the coming days, many of them, like Coke, will feign ignorance, show surprise and duck for cover. But the fact of the matter is that they were transmitting information about their customers to Facebook in hopes of earning more dollars via this new thing called frimping, i.e. pimping stuff to your friends. And if they want us to do that, well they should be held to the same standard as Facebook, and offer everyone an opportunity to opt in to this new kind of advertising program.

Update: Travelocity and Overstock.com are stepping away from Beacon.

The video comes to us from Christopher Carfi.

  1. I love it how Coca Cola all of a sudden gets a conscience. Where was that conscience the last 50 years as they’ve been encouraging consumption of their cancer causing combo of sugar and caffeine? Their sugar pushing is a global effort and I would wager they’ve deceptively marketed it in more than one instance and probably wiped out many local businesses along the way. I’m calling BS on Coke.

  2. Marc’s Voice » Blog Archive » This should be a hell of a week – coming up – blogging Monday, December 3, 2007

    [...] Om says it best when talking the withdrawal of support from Facebook Ads “Did Coke or Blockbus… [...]

  3. I think Coca Cola is wrong this time, facebook is a really a hugh user based site and growing … Coca Cola should continue their support.

  4. Coca Cola had another reason to withdraw. Our group and US PIRG asked the Federal Trade Commission to specifically investigate the role that food and beverage companies are playing with the Facebook and MySpace expanded targeted system (in addition to an overall review of the new approach and privacy threats). The FTC is currently investigating food marketing practices and their relationship to the youth obesity crisis (as required by Congress). I believe Coca Cola, whose behavioral targeting practices we complained about in a May 2007 report given to the FTC (www.digitalads.org), decided there was now too much political heat. We are keeping the pressure up at both the FTC and in the EU on the overall data privacy threats and the specific impact to youth (including interactive marketing of food and beverage products).

  5. Jeremiah Owyang Monday, December 3, 2007

    “Frimping” huh? Almost bad as “Fan-sumer”… ;)

    The coverage at Ad:Tech was really focused on social ads and the implications of that new product, more so on the specifics of Beacon.

    I suspect Coke wasn’t fully aware, but yes, should have asked the right questions.

  6. Does anybody understand how Coke would have worked with Beacon? It’s not like anybody is buying Cokes online to populate news feeds. Actually, it’s not like anybody is doing anything on Coca Cola’s website that could be translated into a news feed story. While Coke is obviously a giant brand, in terms of Beacon, how would they even fit in?

  7. @ Lawrence,

    They signed up to be the advertiser that uses the data collected by Facebook to have better targeting. In other words, they are the direct beneficiary of Beacon. So they fit into this mess from a company that wants to profit from “hyper-targeting.” They will be the brand that gets frimped.

  8. BeaconGate: Hey Coke, Don’t Just Blame Facebook | Voices | Om Malik | AllThingsD Monday, December 3, 2007

    [...] role in the Beacon controversy, much like 44 other partners who teamed up with Facebook. … Read the rest of this post Om Malik is a blogger on GigaOm. Print Share Sphere Comment Tagged: Coca-Cola, Om Malik, [...]

  9. From the reaction across the board I think it’s very possible that Facebook purposely avoided the question of how Beacon data got into the system. They are “Inside the Tornado” now and the omission might not have been purposeful. Clearly Facebook felt the pressure to ensure that there would be sufficient Beacon data for these high-profile advertisers and the temptation to remove an opt-in would have been high. With an opt-out it would have been possible for the program to have failed early.

    Should Coke have dug deeper? Probably, but I’m sure they trusted Facebook when they claim privacy is a top concern. Just like the users did.

  10. To say that Coca-cola should have some egg on their face for not digging dipper and doing their due diligence is fair.

    To say they somehow share some culpability with Facebook for putting out a program that demotes users’ privacy rights to second fiddle is a bit much.

    Was Facebook somehow enticed by Coca Cola and the other 40 vendors to build Beacon, I don’t think so.

    Much of the egg is as it should be on Facebook’s face for clearly trying to monetize to aggressively its user base. There a business no doubt, but monetizing at the expense of your users is a short-term strategy.

  11. Jordan Mitchell Monday, December 3, 2007

    Could this be “spyware 2.0″?

    Remember the 1999 DoubleClick fiasco, when 10 states and Elliot Spitzer came down on them for merging web browsing behavior with personally identifiable info (PII)? (see http://www.clickz.com/showPage.html?page=1455141) How is this that different? Notification isn’t the big deal here, it’s the lack of transparency and control.

    Facebook’s PII+behavior data collection efforts extend beyond Beacon partners. They can collect any data they want, anywhere they can drop a cookie (ad, image, js, etc.). Like for instance, across the whole Microsoft ad network? More thoughts on my blog …

  12. Barry Schiller Monday, December 3, 2007

    Facebook Platform needs a complete rehaul and must redefine itself before a program like Beacon can ever be excepted. The platform is going down the toilet, for proof check out the Top 10 Most Awful Facebook Apps:

    http://www.mtv.com/news/articles/1575607/20071203/index.jhtml

  13. Another corporation trying to distance itself from incompetent executives. How can you make a media buy without knowing the details?
    The bottom line is Carol Kruse is covering her ass. What I hear from Coke insiders is that she is generally clueless about interactive marketing and gets most of her information from sycophants and Business 2.0 and then pretends she knows what the hell she is doing. What a joke!

  14.   The flight from Facebook Beacon by freedompictures Tuesday, December 4, 2007

    [...] Om Malik has a great piece on the panicked exodus of advertisers from Facebook Beacon. [...]

  15. 3 de Diciembre de 2007 Tuesday, December 11, 2007

    [...] El problema de Facebook, Beacon y Coca Cola [...]

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