Will commerce on social media erode digital trust?

by Phil Mennie

Posted on 1 Jun 2015 at 1:15 pm

Some of the leading social networks have recently announced that they will allow users to purchase products through their networks at the click of a button. This is good news for advertisers as it will give them enhanced metrics that allow them to measure return on investment and how social media can ultimately lead to sales.

However, I liken this development to so-called “in-app purchases” through smartphone or games console app stores. The operators of these stores have come under fire in recent months due to complaints from parents that their children are purchasing items from the stores without the parents’ permission. This has led to calls to change the way that in-app purchases work and Apple has even agreed to refund at least $32.5 million (£19.8 million) to customers who complained that their children had run up large bills by making in-app purchases.

It therefore begs the questions as to whether the same will happen when the social networks allow users to purchase products directly through their networks. Concerns have already been raised about how social networks are using users’ data and the networks will need to ensure that they can keep the details of any payments secure to avoid losing users’ trust.

Twitter plans to allow e-commerce around live events, or “in-the-moment commerce experiences” as it puts it. On paper this sounds like a good idea as news often breaks on Twitter before the mainstream media and world events can trend globally on the network as people follow developments as they unfold live on the Twitter feed. However, Twitter will need to provide assurance to advertisers that they have thoroughly tested the algorithms which serve up purchase opportunities for its users to ensure that inappropriate suggestions don’t appear beside world disasters.

For example, there were reports of some life insurance providers using the crash of Malaysian Airlines flight MH17 in Ukraine as a means of promoting their policies, something which attracted condemnation by many. If Twitter implements a mechanism that encourages people to buy products during a world event then it could harm both its own and the advertisers’ reputations if the adverts are deemed by the users to be inappropriate.

This wouldn’t be the first time advertisers have fallen prey to contextual based advertising and one only has to run a quick online search to find examples of where algorithms have served up inappropriate advertisements alongside serious news stories based on the specific keywords in the article content.

E-commerce through social networks could clearly be a big success for the social networks. But both the networks and their advertisers must ensure that the associated risks are identified and managed through a clear governance strategy to avoid losing users’ trust.

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