Privacy: At What Cost?
As a college intern at Fjord New York’s studio this summer, I’ve been exposed to nearly every department: from finance and operations to marketing and PR. I have been able to see some gaps in what I’ve learned at college, and how the real world operates.
The growing disparity between these two spheres is no more evident than in the company’s Makeshop. This is where employees and their clients gather to visualize and plan new digital services, using items such as wood, paper and walls made for drawing.
One of the Makeshop’s most interesting projects centers around consumer privacy, something that every client tells us they want to protect. As part of the team exploring this issue, I had the unique opportunity to attend a Q and A at The Public Theatre, where Privacy, a play starring Daniel Radcliffe, is being performed this summer.
This excursion and conversations with the team made me question, “What does privacy mean to me as a college senior?”
My adolescence has been accompanied by the emergence and now ubiquitous presence of social media. A decade of social media posts and photos detailing embarrassing times of my life is a worrying prospect if I ever wish to gain employment. People my age have online personas that will only be surpassed in volume by the next generation. I am not here to critique social media. Rather, I am now more aware that there is an abundance of data out there. Our search engine histories, online shopping, credit card transactions, apps and GPS devices all flow into our expanding data cosmos.
At Fjord, I’ve been able to tie these issues together to make them relevant to my business and finance major. I want to know how people’s data is being monetized.
Data for Sale
Data-driven advertising contributed $202 billion to the US economy in 2014. If you divide that figure by the 280 million Internet users in the U.S., then each person’s data is worth $721, theoretically speaking.
We can find many examples where people’s data create financial value to someone else, whether you’re talking big bucks or a couple of dimes.
Marketers and publishers use real-time bidding, like financial traders, to buy and sell ad inventory on websites and target their messages to people based on their past behaviors. It’s easy for big business to find out if you are on a Mac or PC, where you are, where you’ve shopped, what you bought or didn’t buy, and what news site you’re reading.
Such information helps brands to target their messages to consumers, who in turn benefit from advertising and promotions relevant to their lives. Moreover, advertising helps to keep the Internet free for all of us; some might argue that giving up our data is a small price to pay.
Let’s consider Sports Authority, which filed for Chapter 11 bankruptcy protection in March 2015. According to the Los Angeles Times, the Colorado retailer “auctioned its intellectual property, including the Sports Authority name, its e-commerce site and about 114 million customers’ files and 25 million email addresses.” Dick’s Sporting Goods won with a $15-million bid, gaining necessary intelligence to go after consumers “looking for a new place to shop.”
In essence, Dick’s paid 11 cents for each data point.
Meanwhile, I am worth a measly 23 cents to marketers, according to a Financial Times survey. If I had a health condition such as diabetes or heart disease, I’d be worth 49 cents – more than the 34 cents I’d be worth as a healthy millionaire.
Back in the Fjord makeshop, we are asking ourselves, “How can individuals be compensated for their personal data?”
The Data Exchange: Getting Paid for What You Do Online
A data marketplace would allow greater transparency and increase efficiency in a system exploiting the first link of the data value chain: the individual. But existing players, such as data brokers, which mine the web for people’s data and sell it to brand marketers, may not want to remunerate the individuals from whom they profit.
As with every industry, new entrants, such as Datacoup, CitizenMe and Meeco, are causing disruption and creating new business models. Datacoup pays people $8 a month in exchange for access to Facebook and Twitter activity, while Meeco provides discounts on products to customers using the company’s private cloud.
“If a consumer wants to make an educated decision, they should be able to sell their data to who they want,” Datacoup co-founder and CEO Matt Hogan told the MIT Technology Review in 2014. “I happen to believe that putting you in control of your own asset, your data, makes for a more efficient market.”
Given these developments, I could imagine the day when people make money off their data by selling it to private concerns on a data exchange. As tech entrepreneur Joris Toonders wrote in Wired, “data is the oil of the 21st century.”
Looks like something I would love to study more of this coming academic year.
Mike Rowley is a student athlete in his senior year at SUNY Albany. He grew up in Sydney, Australia.