Digital advertising was a $36.6 billion business last year, and it is driven largely by advertisers’ ability to pinpoint who is most likely to respond to their ads.
How do they do that? By keeping tabs on consumers’ behavior. According to an informal survey by the Interactive Advertising Bureau, even back in 2009 80% of online advertising used some form of cookies or online tracking. Meanwhile, data brokers profit by selling information about consumers gathered by stores, the government, and via other publicly available sources.
In his graduate thesis project, New York University student Federico Zannier wondered why the advertising industry makes billions of dollars using his and other people’s data, while he makes nothing. To bring attention to the issue, he stalked himself online–screenshotting every website, recording every mouse movement, and noting every location. Then Zannier sold his private data for $2 a day on Kickstarter.
Though Zannier’s project was more of a thought experiment than a viable consumer solution, there are plenty of people looking to answer the same question in a more practical way.
HP Labs senior fellow Bernardo Huberman and another HP Labs researcher, Christina Aperjis, wrote a paper last year that proposed a market for advertisers to pay individuals in exchange for personal data. “There’s no reason, in principal [sic], why individuals shouldn’t be paid in return for the data they create,” Huberman said in an HP blog post about the paper. “If we can do that while taking into account the privacy attitudes of the participants, we can help people better control how their data is used and at the same time open up new possibilities for innovative social and technological research.”
Entrepreneurs are already working on it. A company called Enliken, for instance, offers consumers a marketplace for their data. After installing a plug-in that tracks their online activity on e-commerce sites, participants use a dashboard to exchange their data for perks, such as free shipping from online brands. Enliken cofounder Marc Guldimann argues that the setup works better not only for individuals, but also advertisers.
“If Nike uses the data that’s on the market today to target you with an ad,” he says, “it’s almost like them calling and saying, ‘Hey, somebody told us they found a pair of dirty Reeboks in your trash–want to buy a new pair of running shoes?’ The first thing someone is going to ask is, ‘What are you doing looking through my trash?’ Versus when it’s first party data and you’re sharing information with a brand, the conversation is: Hey, this is Nike. Thanks a lot for telling us you’re in the market for a new pair of sneakers, let’s figure out the best pair of shoes for you.” Enliken charges brands a percentage of the sales that result from this type of data sharing.
A startup social network called Cayova is built around a similar idea. Users can choose whether or not they see advertising on the site based on their online behavior. If they agree to be tracked and targeted, Cayova plans to give them half of what it charges advertisers when they click on ads (the feature is currently being tested).
Advertising platforms often argue consumers are already being paid for their data in the form of services. Google, for instance, keeps tabs on its users’ searches and emails, but it also allows them to use search and email for free. Facebook keeps close tabs on users’ data, but it’s also providing a social network that helps them keep in touch.
But some startups argue, even along these lines, consumers could be “paid” better in exchange for their personal data. A service called Archify, for instance, allows users to track themselves not for the purpose of selling their information to advertisers, but so they can use it themselves. After installing a browser plug-in and connecting social networks to an Archify account, the service collects browsing history, location, and social updates–and makes them searchable. “Our users make use of Archify for backing up their own data, they use us as their online shopping list or for recovering lost tweets and Facebook posts,” Archify CMO Amelia Cretu says. The company eventually plans to offer premium services such as advanced analytics or extra storage.
The missing piece in each of these efforts is, most often, scale. “It’s very early on,” Guldimann says. But though it may sound idealistic, the idea of getting something in exchange for your personal data is more realistic than you might think.
Consumers and lawmakers are still deciding whether or not they like the idea of being tracked, which could make advertisers more open to alternative data sourcing options. “Businesses have become more and more reliant on data, and it is becoming less of an afterthought and more of a mission-critical thing they think about,” Guldimann says. “That makes businesses think about their data supply chain. It makes businesses think about, where is all this big data actually coming from? And once they actually do that, they see their current supply channels are under attack either by legislation or by browsers and do not track.”
Also, as Huberman and Aperjis pointed out in their paper: “As the demand for data increases from the buyer side of the market, we anticipate that the supply will also increase as more people realize that they can make money from selling access to their data.”
In other words, once consumers get wind of the idea, they might like it.
[Image: Flickr user Keith Ellwood]