Government still has a job to sell Midata

The government has unveiled more details about midata, an initiative that will allow consumers instant digital access to the information collected by brands for marketing purposes. But six months on from when it was first unveiled and six months from when the first fruits are expected to launch, many questions remain.

Twenty six companies, including British Gas, Lloyds Banking Group and Google have signed up to the department of Business, Innovation and Skills sponsored initiative. The government has its fingers crossed that its key arguments for involvement – that a two-way exchange of data will build trust with consumers that should lead them to offer more data – will have the biggest companies in all major sectors participating within three years.

That hope will have to become a more concrete expectation before the initiative can become the hoped for game changer desired by the government.

It is revealing that the bulk of the companies involved that are not intermediaries come from the banking and energy sectors. Lloyds Banking Group and RBS are both state-backed and suffering from trust issues. The big six energy companies have all signed to BIS’ “vision”, all of which have had pressure exerted on them from government to reach out to sceptical consumers struggling with rising bills.

What is missing is public backing from retailers or the insight teams that help them crunch the data corralled from costumers. We are told that the likes of John Lewis, dunnhumby and Nectar are taking part in discussions to develop the initiative but in order to give midata credibility, companies from the biggest consumer facing sector, one which spends millions on data capture, have to offer patronage and release data back to customers.

Time, money and considerable expertise have been invested by the likes of Tesco and Sainsbury’s to grow share in the fiercely competitive sector. Will they really want to give it away, for free?

Another related question is will customers be charged for the trouble? Consumer affairs minister Ed Davey has left it “up to companies” to decide on charging. If they do ask customers to pay it could cause a backlash from consumers who will understandably consider it “their data” and instead of building trust, erode it.

Midata is reliant on voluntary buy-in from brands. The carrot is its potential worth to consumers and brands. There is, however, no stick. The second partnership between marketers and government this week saw the direct mail industry, driven by the Direct Marketing Association, agree to improving targeting and the ease of opt-out to reduce waste.

The stick, if you like, is the threat of regulation to force change or condemnation in the court of public opinion.

There is not the same incentive for companies to get involved in midata. The government still has a job to sell it.