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Fast Forward

'Experimenting' on customers is all part of business

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As if we needed another reason to “unlike” Facebook, it gave us another last week.

The social media giant (with a market cap of more than $170 billion as of Thursday) revealed last week that it’s been experimenting on its users (1.3 billion a month, as of January) like lab rats.

Cue the outrage.

By the way, there were 16.6 million search results on Google Thursday, as I was writing this, when I plugged “Facebook” and “outrage” into the search box. That’s a lot of surprise and anger.

But should anybody be feeling either? Facebook has never made a secret of the way it manipulates the content users see in their news feeds. If you don’t interact with your friends, you don’t see all their posts; based on who your friends are, and your past behavior, Facebook also decides which ads to present to you, and it can’t do that well if it isn’t collecting data on you and your online activities.

And Facebook is notorious for changing terms of use, its appearance and user settings, and a host of other operational functions without asking first. So, Facebook users, what did you expect? The guys in the white coats don’t tell their lab animals what they’re doing either — if the subjects know they’re in an experiment, that knowledge taints the outcome.

Is this how you do business?

Well, actually, probably.

In the midst of the uproar on social media this week, the always interesting Shankar Vedantam, NPR science correspondent, weighed in on Twitter with a good mixture of facts and common sense about how marketing works. You can read the series of tweets here.

In short, businesses have always studied customer behavior — and played on emotions — to improve their sales pitches and position their products. Do you really think every purchase you’ve ever made was based on utility, necessity and practicality? Do you understand how little any of those factors plays in any purchasing decision?

So much of what we buy, where we buy it and when depends on how we’re feeling at the time and how we expect the purchase to make us feel. That’s as true of luxury goods as it is of the items we put in our grocery carts.

Facebook’s big mistake — if there was one — was in telling on itself, Vedantam suggests.

“Companies study you. This may or may not be deception. But if you are shocked, it is definitely self-deception,” he tweeted. He also notes that Facebook published the results of similar, previous experiments in academic journals without sparking a reaction.

By drawing attention to itself and its study, Facebook fed into the expectations of millions of people already somewhat uncomfortable at the amount of personal information they give away every day online without understanding — or trusting — how it will be used. Anxiety was under pressure just waiting to be tapped, and it spewed forth like an old-time Oklahoma oil well gusher.

And was the outcome of Facebook’s experiment worth the uproar it created? Its Data Science Team discovered that being around sad people tends to make you sadder and being around happy people makes you happier.

What do you think?

The week ahead

In our next print edition, Pennsylvania Secretary of Labor and Industry Julia Hearthway talks to reporter Joe Deinlein about the commonwealth’s jobs portal and how it’s working.

Reporter Heather Stauffer looks at the process for dropping employee health insurance while remaining compliant with Obamacare requirements, and Michael Sadowski reports on a new business-advising certificate program now available in the midstate.

The Inside Business focus is on real estate, development and construction with lists on commercial property managers, real estate appraisers, construction projects and inspectors.

Find the week’s networking opportunities here.

The rewind

By coincidence, I happened to read the terms of use for the Wall Street Journal’s digital products recently and found this:

“We use the Personal Information we collect from and about you. …To improve the quality of our products and services and to personalize your experience by presenting content, products and offers tailored to you, we may also combine the Personal and Other Information we collect with information relating to your use of other Dow Jones products, services and websites. In addition, we may supplement the Personal and Other Information we collect with information from other sources, such as publicly available information from social media services, commercially available sources and information from Dow Jones Affiliates or business partners.”

That’s pretty plain. It’s also pretty boilerplate for terms-of-use agreements. But who reads those?

Meanwhile, on the other side of the ocean, “forgetting” has begun. If you recall, a European court ruled recently that people under its jurisdiction have a “right to be forgotten” and may petition Google to remove undesired links to information about them. It’s begun — and it is chilling in every sense of the word. The economics editor of BBC News writes about one of his pieces that’s about to disappear — and he doesn’t know why.

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