Information is worth much more than cash
There are valuable lessons to be learned from the personal data economy, writes RadiumOne’s Mark Middlemas.
It goes without saying that personal customer data is key to competition and growth for just about any business. At the same time, debates continue about how and why personal data is used, and perhaps above all, who wins and loses?
Data and power
Consumers are starting to push back, most recently through blocking online advertising which, for the first time, is starting to hurt brand communications.
In fact, ad blocking points to an important dynamic that, while often overlooked, holds important insights.
The digital revolution has empowered consumers to an unprecedented degree. The biggest players – Google, Apple, Facebook and Amazon, who are being joined by the likes of Uber and AirBnB – have relentlessly focused on enabling consumers to take increasing control on more areas of their lives.
So personal data has become a currency of power, whose ebb and flow underpins much of the debate about privacy, security, trust and value.
Is there a business in this?
A number of movements and business are clustering around empowering consumers to actively manage their personal data.
Some argue that we should be monetising our individual data, selling it to brands to enable them to serve us – and others – better and more profitably. A year ago, for example, DataCoup launched as a market exchange for consumer data. Their initial offer to subscribers was $10 per month but there’s no evidence this model is taking off.
[advert position=”left”]
Indeed, “DIY data sales” is not a new idea. 10 years ago, movements such as AttentionTrust.org and its offshoot, Root Vault (a browser plug-in enabling people to archive their data for possible future sale) caused a flurry among market watchers.
It’s educational to hear digital entrepreneur Seth Goldstein ruefully comment recently in Money on what happened: “People don’t feel viscerally the issue of their data being exposed and monetised without their direct knowledge.”
Or do they?
Another approach
Looking beyond the sales opportunity, the market for increased personal control of data – fuelled by a growing swell of consumer resentment – is showing significant traction.
Doc Searles, co-author of the The Cluetrain Manifesto, has been active in the space for some years. His concept of “The Intention Economy”, promoting a reversal of the traditional market dynamic and focusing on what he calls Vendor Relationship Management, seems an exciting and rational call to arms.
Why, for example, should we go hunting for the best price for a rental holiday car when, with our personal data at our fingertips, we could parcel it out to the market and let suppliers bid for our business?
Why indeed?
Consulting and research firm CTRL-SHIFT is dedicated to supporting both business and government in actively improving their management of customer data, for the benefit of both sides. In the UK, they’re leading the charge towards a viable personal data economy, and advising a range of credible and high profile clients.
However, the Personal Data Economy as a distinct market-wide opportunity has yet to fully land.
Despite the validity of its concerns – both ethical and commercial – the argument can come across as curiously old-fashioned, a younger cousin of the vocal protest groups that rose up when the Web, in the late 1990s, began to turn commercial.
There are clear echoes, for example, of the Electronic Frontier Foundation, who still remain relevant about citizen rights – but not about commercial value.
There are also genuine problems with usefulness. While such customer services can certainly create value on a purchase-by-purchase basis, they tend to be lodged in “sector silos”.
For example, in our rental car scenario, the work required for an ordinary person to achieve the best value for money may take more time than it’s worth. Particularly, if you have to replicate that effort across all elements of a family holiday – flights, accommodation, activities etc.
Third party infomediaries?
For at least 20 years, the concept of a so-called “third party infomediary” has been fretted about.
A commercially neutral, legally compliant, body that would enable citizens/consumers to have the best of both worlds – to receive mass customised, personal products and services by offering just the right kind and amount of data to the market, while remaining in control of both their anonymity and their identity.
It says a lot that this has never quite come to pass. Telcos, retailers, banks, government…any of these could in theory have picked up the gauntlet. We might argue that the BBC’s unique role and charter – at least as it was originally envisaged – would make it a perfect contender in the UK.
If the opportunities and risks of a personal data economy are pretty clear, why has this obvious opportunity never landed?
The best of both worlds
This question leads us to the most important insight in this debate, and it’s actually very good news for beleaguered marketers.
Only when data from a plethora of sources is gathered, sorted and analysed, and then focused on the creation and delivery of a truly useful, secure and differentiated service, does the kind of value consumers have come to expect become real.
This can only be satisfactorily performed by well-funded, large businesses that are ruthlessly devoted to empowering consumers and reaping the huge rewards that result. Most, perhaps all, of the highly successful and powerhouse brands of this century – most recently Uber and AirBnB – are already offering this form of integrated service, and ruthlessly driving it forward too.
In other words, the personal data train has effectively already left the station. History has simply overtaken the need, and while it has yet to achieve a comfortable maturity and is certainly not evenly distributed, the Personal Data Economy is already very much here.
In marketing, the balance of power between brand, media and consumer is actively being worked out. We’re successfully shifting the debate about privacy and security, from an emotionally loaded conflict between “Good vs. Bad” data to a focused and intelligent balancing of value vs. risk for both brand and consumer.
So while the social and political impacts – both negative and positive – of personal data need constant and careful review, we can find reassurance in the consistent and tangible commercial progress that is being made, in a context where the technology continues to set an enormously challenging pace.