Would You Like to Make Money From the Personal Data You Share Online?

    By Paul Oram | Small Business

    Would You Like to Make Money From the Personal Data You Share Online? image 4880157508 dd2f144a45 mgreen for sale sign

    green for sale sign (Photo credit: Diana Parkhouse)

    As we discussed in a recent posts, we are all leaving increasingly large data exhausts behind us online, as we perform searches, visit websites, execute transactions, use apps on our mobile phone, connect and share on social media. The vast volume of data that businesses are building up on us is a treasure trove for marketers, enabling them to better understand us, predict our preferences and behaviours, and take actions to bind us closer to their brands and encourage us to purchase their products.

    When these actions are done effectively they can surprise and delight us, but a miscalculation can soon make us question what data businesses are holding on us, and how is that data being used.

    Is a privacy backlash coming?

    There is much debate as to whether a major privacy backlash is looming just round the corner, or whether a much more permissive attitude towards openness and sharing of data will prevail as new digital native generations grow up. Some people are also starting to recognise the value of their own data and the next logical question is to challenge who is currently making money from my data? Why not me?

    Who is making money from my data?

    The answer to the first part is easy, it is currently the platforms – notably Facebook, Google, Twitter, but also app providers. For example, consider the data set that Nike is accumulating through its Nike+ ecosystem of products. It knows exactly how often you run, for how long, at what speed, in what places, and with whom. It could know how well your heart is performing during your exercise. This is interesting and valuable information for you as a consumer as it can help you set goals and track your progress. It is also a goldmine of data for Nike. At its most basic, Nike now knows when it should be subtly recommending that you replace your worn out running shoes. Hypothetically, I wouldn’t be surprised if the data could be used to predict your probability of suffering a heart attack. I am not suggesting that Nike do this, but given sufficient volumes of data you can start to pull out the patterns and predict future outcomes. What if your life insurer had access to that same data?

    Personalisation is therefore a double-edged sword; it can deliver valuable tailored products and services that we love, but it can also feel intrusive and even exclude us from things that maybe we would have had access to in a less data rich environment. So do we lie back, log out, or try to take control?

    Data-lockers and how consumers could profit from their data

    European legislation currently being debated would significantly increase the regulation in this domain, preventing companies from using your data with 3rd parties without your explicit consent. It seeks to force much greater transparency on what information is being collected about you, and what it is being used for. The internet titans are waging an unprecedented lobbying campaign (linked page in Spanish) to prevent this legislation from seeing the light of day, as it would probably force a radical shift in their business models.

    Numerous start-ups are trying to find opportunities in this landscape with services such as “data lockers” – where you can deposit your personal data and grant access to businesses to selected areas. This opens up the possibilities of services such as reverse price comparison, where you invite companies to give you the best offer on the data that you opt to share. Maybe you could even receive direct remuneration for opening up your personal data – the more comprehensive it is or the more interesting your profile is to businesses, the higher the rewards for you. The UK’s midata initiative, which gives consumers a portable copy of their data so that they can take it elsewhere and try and get a better deal, also falls into this space. These are exciting ideas, but the question is – who is positioned to deliver these services? Would you entrust your data to a small start-up? A lot of the most valuable data is currently sitting on the servers of the huge corporations, whose value is directly linked to how many consumers are on their platform and how well they enable third parties to use that data.

    Trust and transparency will determine who the winners are that emerge from all this. As companies seek to explore and expand big data projects these are critical areas of consideration.

    More Business articles from Business 2 Community:

    Subscribe to our mailing list
    * indicates required
    Small Business Services