Mine your dig­i­tal business

Financial Mirror (Cyprus) - - FRONT PAGE -

Nearly ev­ery­one has a dig­i­tal foot­print – the trail of so-called “pas­sive data” that is pro­duced when you en­gage in any on­line in­ter­ac­tion, such as with branded con­tent on so­cial me­dia, or per­form any dig­i­tal trans­ac­tion, like pur­chas­ing some­thing with a credit card. A few seconds ago, you may have gen­er­ated pas­sive data by click­ing on a link to read this ar­ti­cle.

Pas­sive data, as the name sug­gests, are not gen­er­ated con­sciously; they are by-prod­ucts of our every­day tech­no­log­i­cal ex­is­tence. As a re­sult, this in­for­ma­tion – and its in­trin­sic mon­e­tary value – of­ten goes un­no­ticed by In­ter­net users.

But the po­ten­tial of pas­sive data is not lost on com­pa­nies. They recog­nise that such in­for­ma­tion, like a raw ma­te­rial, can be mined and used in many dif­fer­ent ways. For ex­am­ple, by analysing users’ browser his­tory, firms can pre­dict what kinds of ad­ver­tise­ments they might re­spond to or what kinds of prod­ucts they are likely to pur­chase. Even health-care or­gan­i­sa­tions are get­ting in on the ac­tion, us­ing a com­mu­nity’s pur­chas­ing pat­terns to pre­dict, say, an in­fluenza out­break.

In­deed, an en­tire in­dus­try of busi­nesses – which op­er­ate rather eu­phemisti­cally as “data-man­age­ment plat­forms” – now cap­tures in­di­vid­ual users’ pas­sive data and ex­tracts hun­dreds of bil­lions of dol­lars from it. Ac­cord­ing to the Data-Driven Mar­ket­ing In­sti­tute, the data-min­ing in­dus­try gen­er­ated $156 bln in rev­enue in 2012 – roughly $60 for each of the world’s 2.5 bln In­ter­net users.

As im­pres­sive as this fig­ure sounds, it is just the first step for the data econ­omy. By 2020, the global In­ter­net pop­u­la­tion will reach five bil­lion; ten bil­lion new ma­chine-to-ma­chine con­nec­tions will be cre­ated; and mo­bile data traf­fic will rise 11fold. Given the dra­matic growth in the amount of data be­ing gen­er­ated, to­gether with ever-ex­pand­ing ap­pli­ca­tions across in­dus­tries, it is rea­son­able to ex­pect that in­di­vid­ual data will soon be worth more than $100 per In­ter­net user. Within ten years, the data-cap­ture in­dus­try can be ex­pected to gen­er­ate more than $500 bln an­nu­ally.

Based on th­ese pro­jec­tions, one might won­der what kind of com­pen­sa­tion the cre­ators of this multi­bil­lion-dol­lar data can ex­pect. As it stands, the an­swer is none at all. In­di­vid­ual users are at the bot­tom of a bro­ken econ­omy. The value that their data gen­er­ate is be­ing col­lected by third par­ties, and sold to what­ever cash-rich or­gan­i­sa­tion is will­ing to pur­chase it.

This does not have to be the case. The first step to­ward re­claim­ing some of the value of our own data is to view this in­for­ma­tion as an as­set, rather than as a by-prod­uct. At that point, In­ter­net users can find ways to take con­trol of their own cre­ation.

Al­ready, Face­book users can ex­port all of their per­sonal data as a zip file sim­ply by click­ing a link on their pro­files. Pre­sum­ably, they could sell that in­for­ma­tion di­rectly to the or­gan­i­sa­tions that want it, in­stead of al­low­ing Face­book to do so.

Of course, the data mar­ket does not yet ex­ist on this scale. But, as Face­book’s data-ex­port fa­cil­ity demon­strates, a new model that turns data into an as­set and con­sumers into pro­duc­ers is not a dis­tant prospect. Such a model would em­power bil­lions of In­ter­net users by mak­ing them ben­e­fi­cia­ries of a trans­ac­tional ex­change – one that adds value in ev­ery di­rec­tion.

Beyond en­abling in­di­vid­ual In­ter­net users to mon­e­tise their data, this model would ben­e­fit data buy­ers by con­nect­ing them more closely to con­sumers – not least by di­min­ish­ing the mis­trust that can arise when users are not com­plicit in the shar­ing and use of their data. In­deed, firms that ac­knowl­edge that per­sonal data are per­sonal prop­erty will be in a bet­ter po­si­tion to build re­la­tion­ships with in­di­vid­ual con­sumers, thereby gain­ing deeper in­sights into their spe­cific needs and de­sires.

If pas­sive data are worth hun­dreds of bil­lions of dol­lars when sold by third par­ties, the data that in­di­vid­u­als choose to share – re­li­able, hon­est in­sights into their mo­ti­va­tions as con­sumers – should be worth much more. By recog­nis­ing the in­di­vid­u­als be­hind the data, com­pa­nies can ac­cess and share in that value, within a fully in­clu­sive data econ­omy.

Per­sonal data is ex­actly that – per­sonal. Peo­ple should choose whether to share it, and they should be able to share it on their own terms.

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.