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Cambridge Analytica Scandal Story

Cambridge Analytica’s Huge Data-Driven Plan Gone Bad

One of the biggest storylines of the 2016 United States presidential election was Cambridge Analytica and the role of personal data in U.S. election campaigns. Cambridge Analytica, a British political firm founded in 2013 by Alexander Nix as a subsidiary of SCL Group, specialized in data-driven marketing, including predictive analytics and ad placements.

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Who is Cambridge Analytica

They started working with Donald Trump’s presidential campaign in 2016 and are credited with being a large reason Donald Trump won the 2016 U.S. election. The firm dissolved in 2018 after the United States Congress investigated Cambridge Analytica’s use of consumer data. A 2019 Netflix film, The Great Hack, brought major attention to the scandal and caused a massive public reassessment of how our personal data is used for ad targeting.

Cambridge Analytica was incredibly adept at shaping voter opinions because of their heavy reliance on data-driven marketing. Targeted digital ads become much more effective as targeting becomes more relevant. Cambridge Analytica leveraged data from Facebook profiles, provided by users opting into apps and games on Facebook, and built robust audience profiles of voters.

These profiles were then used to target ads across marketing channels, from Facebook to T.V. to direct mail. By using machine learning to sift through vast amounts of user data, Cambridge Analytica was able to efficiently find people that were easily swayed and serve them advertising.

While many people were shocked to learn that their data was being used to target them with political ads, we have collectively agreed to provide data from our everyday lives to advertisers in the form of terms and conditions. Most free apps earn money by selling user data to 3rd-party companies that provide audience profiles to advertisers.

That isn’t the only way advertisers accumulate data, though. Data-driven marketing rules most digital interactions in 2020. Your web browsing history and tendencies are tracked using cookies and explain the ads that follow you after you view products.

This data informs email marketing, as you may receive ads for product categories similar to your browsing history. Safe to say, this is standard practice and helps fund the free apps and websites we use on a day-to-day basis

Data-Driven Tactics

Personal data can be used to build in-depth audience profiles. Many marketers use persona-based marketing. Using their own first-party and customer data through a platform like Google Analytics, companies can determine what their current audience looks like, and define what an audience profile for the target audience should be.

Facebook activity and data, for example, can provide insights into demographics, purchase intent for various product categories, brand affinities, and much more. These audience profiles can be translated into targeting settings for ad platforms, such as Facebook or Google. This audience data is incredibly valuable for companies to provide targeted ads, but Cambridge Analytica exploited the data to affect the outcome of US elections.

Cambridge Analytica used this data to create relevant target audiences during the 2016 US election cycle, but their downfall was how they collected the data. Cambridge Analytica created an app called ‘This is Your Digital Life’ which offered payments to users who completed a survey with the app. Cambridge Analytica used this access to collect data from those users’ friends, as well, giving them access to millions of Facebook users’ data.

After the incident, Facebook confirmed that data was collected on 87 million users, though only 270,000 Facebook users actually downloaded the app. From this data, Cambridge Analytica was able to learn about American voters in great detail and plan a coordinated, data-driven marketing campaign to sway the 2016 US presidential election.

Campaign Data

A number of election campaigns potentially used Cambridge Analytica’s improperly-collected data. The most obvious is Donald Trump’s 2016 US presidential campaign, which won as a partial result of the work Cambridge Analytica did to target consumers.

The first campaign in that 2016 American election cycle to hire Cambridge Analytica, though, was Ted Cruz’s campaign. The Cruz campaign hired them in early 2016 to create audience profiles based on user data and run targeted ads to sway voters that matched those profiles.

Internationally, the improperly-collected data was linked to Lukoil, a Russian oil company, who was reportedly interested in Cambridge Analytica’s data as a way to target American voters. Additionally, the firm was reported to have been hired in 2016 by pro-Brexit organizations in the United Kingdom to provide data for audience profiles to promote support for Brexit. Cambridge Analytica has also been linked to working on election campaigns in Australia, India, Malta, and Mexico, making its impact truly global.

While this scandal is widely-known now, it might never have come to light had The Guardian’s Harry Davies not written an exposé about Cambridge Analytica in December 2015. The initial reporting was in regards to Cambridge Analytica working with Ted Cruz’s US presidential campaign.

The article suggested that the company (and by extension, the presidential campaign) was using data collected improperly from users’ Facebook profiles, without their knowledge or consent. One Cambridge Analytica employee, Christopher Wylie, also came forward with what he knew about the company’s misuse of data in March 2018.

His testimony provided context into how information was collected and used. Wylie’s role, per Observer, was bringing “micro-targeting” to Cambridge Analytica, which was individualized political messaging, catered to each user based on algorithms.

This was the heart of the data-driven marketing that made the firm so successful in influencing elections as they used user-level targeting and messaging, sometimes promoting misinformation, to sway voters across the country.

Brittany Kaiser

Another character central to the story of Cambridge Analytica was Brittany Kaiser, the firm’s business development director. Kaiser worked for SCL Group & Cambridge Analytica from 2015 to 2018 in a senior leadership role directly under Alexander Nix, meaning she had direct access to the firm’s inner workings. Kaiser left the company and subsequently testified against them in front of the British Parliament.

After leaving Cambridge Analytica, she wrote a memoir entitled Targeted: The Cambridge Analytica Whistleblower’s Inside Story of How Big Data, Trump, and Facebook Broke Democracy and How It Can Happen Again and has turned into a data privacy advocate. Kaiser called on Facebook to ban political advertising entirely and has spoken out about both Facebook and Cambridge Analytica’s involvement in the data misuse that ultimately swayed the outcome of the 2016 US presidential election.

She was also a central figure in the Netflix documentary The Great Hack, detailing her involvement and the overall data handling practices of Cambridge Analytica. Despite her strong stances on data use and her career shift into activism, Kaiser was named to the board of Phunware, a mobile location tracking and advertising technology company with strong ties to Donald Trump’s 2020 campaign.

Phunware came into hot water in April 2020 as they received a $6.1 million Paycheck Protection Program loan through JP Morgan Chase, despite their clear ties to Trump’s 2020 campaign. 

Cambridge Analytica’s use of personal data was clear exploitation of a flaw in Facebook’s privacy settings, one that was fixed in 2018 after Facebook made a very public apology in response to public outrage. In parallel, the European Union was rolling out the General Data Protection Regulation (GDPR), a sweeping digital privacy law that controls data protection and privacy in the EU. This law centers on “the right to be forgotten” and forces any firm collecting data to get explicit permission from users before collecting data.

Users can also request the data that is collected on them from any entity that collects data on European Union citizens and requests that data be deleted, “forgetting” the user. As a response to the Cambridge Analytica scandal, Facebook rolled out the GDPR data protections to users in all regions, not just those in the European Union.

Despite these actions, Facebook has continued to face blowback from this scandal, as well as controversy in the form of increased scrutiny into their role in the US election process and improper data collection and handling procedures.

New Ventures

While Cambridge Analytica went formally insolvent in 2018, members of the Mercer family invested in a new venture with former Cambridge Analytica and SCL Group employees called Emerdata Limited, again as a subsidiary of SCL Group. Alexander Nix is once again the director, as he was at Cambridge Analytica. Despite some early controversy with the High Court of England and Wales, Emerdata is in fine legal standing and provides data processing services.

The Cambridge Analytica scandal made huge waves worldwide as it showed how powerful user data could be. Data was not seen as a threat to national security to quite the same extent after its effect on the 2016 US presidential election became well-known.

Now, governments and individuals are acutely aware of how they are being targeted for ads online and the power that targeting can have, especially when it comes to election campaigns. In addition to GDPR, California rolled out CCPA, the California Consumer Privacy Act, a law with similar restrictions and requirements for data collectors.

Despite these changes, data-driven marketing is still alive and well, and is a great way to reach your target audience, so long as the data is collected responsibly.

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