With Big Bucks Chasing Big Data, Will Consumers Get a Cut?

Xconomy National — 

As consumers, we’re often told a stampede of “big data” will soon make our lives better.

Safer and cheaper healthcare, more effective government, lower prices at the corner store—it’s all possible when big companies start digging into the digital information produced by a constantly connected society.

Today, the central bargain underwriting most of those lofty promises goes like this: to get access to better services, you’ll give up your personal information or browsing habits for free. But if big companies can make billions of dollars selling your eyeballs to advertisers, can an individual consumer ever expect something more than a free website?

You probably won’t get rich, but it’s possible. There are a few innovative companies testing out that model now, both in the U.S. and overseas.

They’re early examples of businesses being built on the idea that personal data could be a kind of private asset that can earn its owner a little money. That’s a big change from the way things have worked so far in the Internet economy, particularly in the First World. But some big minds think the system is ripe for a change.

A group convened by the World Economic Forum, for example, is pushing governments and businesses to give consumers more control and ownership over their own valuable data assets, changing the equation away from what the WEF calls “the industrial-age model of the `consumer’—where relationships are captured, developed and owned.”

“In practical terms, a person’s data would be equivalent to their `money,’” the WEF’s personal data report says. “It would reside in an account where it would be controlled, managed, exchanged and accounted for just like personal banking services operate today.”

That would take some big shifts in public sentiment, and probably some serious government regulation. And at least one of the entrepreneurs working on a pay-for-data startup thinks it’s a long shot in the developed world. But here are some early glimpses around the country of how it might look if big business started forking over dough for your data.

Location Monitoring

David Shim wants to follow you around. But he thinks you should get something out of it.

Shim is the CEO of Placed, a digital advertising-tech startup based in Seattle. Placed collects data with a smartphone app that continuously tracks its users’ whereabouts using the location sensors built into their phones.

Users provide demographic data about themselves when they sign up—age, gender, ethnicity, income level, whether they have kids. The result is a group of people who can serve as a kind of Nielsen ratings service for the real world, showing Placed (and its clients) where and when they shop, eat, and travel.

That kind of insight allows Placed to say, for example, which retailers saw the most visitors head to Amazon after visiting their brick-and-mortar stores—a practice called “showrooming,” which retailers are trying to battle. In a study of fast-food restaurants, Placed found that Asians were nearly three times as likely to eat at In-N-Out burger than the average consumer, while Hispanics weren’t very fond of Arby’s.

In return for sharing their information, users are rewarded with points that can be cashed in for gift cards or donated to charities. “We think you need to make that trade very explicitly, where we say, `Hey, you’re going to give us something, and you’ll get something back,'” Shim says.

Mobile Marketing

Here’s a pretty big idea: Put more money in the pockets of a few billion people, one digital transaction at a time.

That’s what motivates Jana, a Boston-based company that grew out of research at MIT’s famed Media Lab.

Jana says it can compensate nearly 3.5 billion people in the developing world through partnerships with mobile carriers. The startup uses that reach to help consumer companies market themselves—sending coupons, conducting surveys, and so on. In exchange, the consumers get credits for their wireless bill, reducing a significant but vital cost in the connected age.

Jana boasts work with huge brand names like Unilever, Microsoft, Proctor & Gamble, and General Mills. But there’s still plenty of work to do in creating a robust market for this huge amount of market data, CEO Nathan Eagle says.

“There are literally hundreds of millions of people who are clamoring for trying to get some type of compensation for data. Everyone wants to be paid, and the challenge is, ultimately, finding enough buyers,” he says. “It’s early days to try to figure out this value exchange. But I believe there is a big opportunity here, and we are starting to see it.”

Web Tracking

Mobile phones have set off a new land rush for detailed personal data, but the traditional Web browser is still the place where advertisers spend billions of dollars per year chasing customers. Enliken, a startup based in New York and Seattle, thinks consumers are ready to turn the tables on that pursuit.

Enliken uses tracking software that people elect to install in their Web browsers in exchange for discounts on things they buy online. It’s presented as the digital equivalent of a grocery-store “loyalty” card, a concept that American shoppers have been used to since the 90s.

The company recently surveyed Web users by giving them a fascinating inside glimpse at the kind of data advertising networks were collecting about them. Consumers then rated each attribute assigned to them based on their Web usage, saying whether they considered the information very accurate or too sensitive for their liking.

Enliken says most people who took the survey found the collection of online shopping information to be pretty harmless—what kinds of products they’d recently looked at, their hobbies, broad demographic categories like “parent” or “small business owner.” People only showed consistent privacy concerns about data on their voting preferences, their income levels, whether they owned a home, and their retirement investing preferences.

The point, Enliken CEO Marc Guldimann says, is that consumers aren’t opposed to being tracked—but they want to know what advertisers are learning about them. “This lines up with our belief that if you give consumers transparency and control they’ll be happy to share non-sensitive data with merchants and brands,” he says.

All of these companies are, to some degree, betting that markets for user-controlled data will grow in response to consumer expectations and government regulation. But there’s a long road ahead before that’s settled.

In a blog post, Enliken laid out a vision of data exchanges in 2016: “Profiles are now considered personal property and are rarely sold by apps or sites,” with the average American earning $10 per month from selling access to their digital data.

Others aren’t so sure a new market for personal data will catch on everywhere.

Eagle, the CEO of Jana, says paying consumers directly for using their information is more likely to become a norm in the developing world, where his company operates.

First of all, developing-market data is much more scarce—not as much is known about these consumers, who represent huge populations that are rapidly becoming more affluent. But back home, your average consumer has already been extensively profiled by marketers and data-collectors of all kinds.

There’s also the tricky matter of putting a price on that information, which the WEF notes is “wildly subjective.” If Jana’s paying a dime to mobile phone users in a data-poor market like India, can exhaustively profiled U.S. consumers even earn enough to make them care?

“Ten cents is inherently less of a motivator in the United States,” Eagle says.

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2 responses to “With Big Bucks Chasing Big Data, Will Consumers Get a Cut?”

  1. Leon Benjamin says:

    We propose that it is economically viable for the UK’s National Health Service (NHS) to become a self-funding entity by selling patient healthcare data to a wide variety of industry actors. We also propose that an individual’s healthcare data record itself can eventually becoming an earning asset that can be passed on to future generations.


  2. Jenny says:

    Big Data storm is definitely impacting consumers. We see it every day in our interactions with society. The access of information now available is overwhelming. It is quite the big data storm. http://www.apcon.com/big-data-storm/