Buddy Lo
Buddy Lo is a Sr. Technology and Consumer Electronics analyst at Mintel. He is responsible for researching and writing reports on technology and consumer electronics.
April 01st, 2021

Reports of Facebook’s blockchain initiative surfaced in 2018 stating that the company was launching its own blockchain division. Developments on the cryptocurrency – Libra – moved quickly. It was formally announced nearly a year later in June 2019, and since then it has overcome regulatory obstacles, attracted dozens of corporate members and backers, and is expected to launch in 2021.

The mission statement of the Diem Association, the governing body of the Libra blockchain, reads, “The Diem payment system is built on blockchain technology to enable the open, instant, and low-cost movement of money. People will be able to send, receive, and spend their money, enabling universal access to financial services.” The Libra coin will act as a digital currency, linked to a government ID, backed by the US dollar with various currencies also in reserve; so there should not be issues with the stability of the coin. The real issue will be to ramp up adoption and usage, especially with privacy concerns and distrust with big tech.

For example, Facebook took a hit when Apple announced it would ramp up its privacy efforts in its iOS 14 App Tracking Transparency update.

Since then, Facebook has run ad campaigns across print, audio and video to lobby against such efforts, leaning on the message that these privacy moves will hurt small businesses. Apple’s position is that it is simply doing what consumers in the market want, which is giving them more control over their digital behavior and privacy.

Solving the privacy issue with zero-party-data

Facebook and Libra can overcome their differences, and potentially increase their value to advertisers if they buy into zero-party-data. Zero-party-data is the practice of skipping the middleman when sharing personal information, where consumers willingly give access to marketers to certain information like age, gender, or personal interests.

Facebook will have a separate Libra Coin wallet, Calibra, so transactions can be separated from social media accounts; however, Facebook could incentivize its users into linking Calibra with their social media accounts. By linking accounts, Facebook could compensate its users with minute amounts of Libra for simply browsing Facebook or Instagram, on the condition they share personal information or digital behavior. This should elevate the value of Facebook’s platform to its audience, and who wouldn’t want to make money while browsing Instagram? It would also increase its value to marketers, especially if other major firms lose their access to personal data and Facebook can provide much more efficient ad spend when targeting specific consumers.

What we think

Mintel research on digital advertising shows that consumers are willing to share personal information if there is a benefit to doing so, indicating that there is a market for it. Three in five Americans agree that advertisements are a necessary part of the internet; meanwhile, two in five would share their location in exchange for discounts from brands.

Instead of lobbying the public to prevent Apple from giving users more control over their privacy, Facebook could leverage its cryptocurrency to convince its users to willingly do so themselves.