Last week, Facebook dropped two mobile ad partners for violating privacy violations. HasOffers and Kontagent both provide advertising and analytics for mobile and focus on promoting app download attribution and measurement. According to AdExchanger, they were dropped for the following violations:

  • Holding on to data for longer than allowed
  • Failing to require advertisers to disclose what was being collected and for what

Here’s how the problem plays out. An app developer uses HasOffers or Kontagent to promote their app on Facebook and other sites, then tracks which sources the downloads come from. Facebook benefits from partnering with large media buyers instead of having hundreds of mini-accounts, while HasOffers and Kontagent mae money and benefit from the data and analytics that Facebook provides.

However, ad partners that fail to meet the privacy policies and agreements hurt both their relationship with Facebook and Facebook itself.

The FTC could easily fine Facebook for abusing the privacy of users and failing to disclose what information was saved, for how long, and to whom it was given. Facebook recently ran an audit of its 13 ad buyers to check for privacy violations, such as the ones above, in order to prevent future abuse of user data – which leads to government fines.

Both HasOffers and Kontagent responded to Facebook’s decision in blog posts and have been working to change their procedures to comply with the privacy policy.

HasOffers denied violating Facebook’s terms of use and provided steps for clients to continue working with the social network. They also embedded a series of Tweets praising HasOffers for handling the situation.

We first disclosed all of our data storage and deletion processes with Facebook during an audit in September. We sought clarification on certain issues and offered solutions to allow our products to work within Facebook’s terms… Regardless of their recent and sudden decision, we remain hopeful and open to working with Facebook in the future.

Andy Yang, CEO of Kontagent, assured his clients that most of them won’t be affected by the change and that only a small part of their relationship has been affected. They also provided updates about the exact issues that caused Facebook to cut them off.

UPDATE: Of our 22,000 customers, only 15 were affected by this development. So it’s an isolated portion of our business… During Facebook’s audit we learned that the issue was not a failure to communicate with our clients, but that we did not display the program’s disclosure requirement in a prominent location in our marketing materials.

Side Note: It’s rather cool to watch two similar companies handle the same crisis situation. Especially as HasOffers curated tweets of support, while Kontagent didn’t even open up the comments section. 

Even though this may have only been a minor issue that received bad press for both companies, the news is spreading through myriad industries and has had ripple effects for app developers. Gaming apps in particular have been affected by the drops, as Joel Brodie of Gamezebo explained:

What is not widely known outside the mobile game industry is that everyone uses HasOffers (and to a lesser degree, Kontagent) to track installs… I am not saying HasOffers has a monopoly on app tracking, but everyone I know uses them…  It means developers have to scramble to remove HasOffers, and both HasOffers and Kontagent have to scramble to fix the problem.

Even if the changes only affected a few clients, marketers can still learn from HasOffers and Kontagent. It’s important to familiarize yourself with FTC guidelines and other Internet-related laws. If you’re about to start using a third-party API or company for your marketing, have your legal department check out the rules and regulations to work with each organization involved (in this case, both the ad partner and Facebook itself). The extra set of eyes might help your team in the long run.