Taking back control: the personal data economy

‘Are there some marketers you trust but others you’d rather turn away?’ asks Ghostery, a service that lets people see and block the brands and companies that are tracking them online. Ghostery might not yet be a household name but it is a new brand in a burgeoning industry that is disrupting ‘big data’ by giving the power back to consumers and letting them manage their own information (see ‘Five emerging players in the new information business’, below).

“A lot of organisations still think that the databases they have on customers belongs to them,” says Julian Saunders, chief executive of personal data store Allfiled, who says that consumers will be able to access their own data from a number of different sources.

“Companies haven’t fully realised the fact that those individuals have free choice and can go to any company they like and that there is very little value in owning a personal database.”

This new ‘personal information economy’ includes other emerging brands and services such as search engines that don’t collect browsing histories, portals that can tell people where and how their data has been breached and businesses that let people collect their data to monitor it in one place.

So rather than businesses making money by using and selling data on how people behave online – an activity that Boston Consulting Group says could be worth $1trn by 2020 in Europe – this new industry gives people their information back.

Some brands are already getting involved (see ‘How brands can be part of the personal information economy’, below). Barclays, for example, has launched Cloud It, an online service that enables customers to upload and tag documents such as utility bills, bank statements and a digital copy of their passport, so that they can search for information easily. Users can also set up alerts such as a reminder for when their car insurance needs to be renewed. 

Putting the power back in the hands of consumers will develop a trust with brands that makes for a more productive relationship

Consumer website MoneySavingExpert.com has launched Cheap Energy Club using technology from Allfiled, where consumers can monitor their gas and electricity tariff and easily compare it with other providers. This has been further boosted the Government’s efforts to increase competition across the energy sector with a move to make QR codes compulsory on every bill so that people’s energy consumption data can be uploaded to price comparison sites.

Start-up industry

However, a study by consultancy Ctrl-Shift suggests that it is smaller companies that are the early entrants to the personal information industry, indicating there has been one new start-up launching each week over the past year.

Ctrl-Shift says that about a third of these businesses are information storage services, a third are concerned with helping people manage whether they can be identified by brands, and the remainder are in ‘personal analytics’, which help people track their fitness activity such as running, or monitor how their mobile phone usage might be changing.

“Individuals are already managing and sharing lots of data online in the form of passwords, forms, profiles and so on,” says Alan Mitchell, strategy director at Ctrl-Shift and former Marketing Week columnist as well as government data adviser. “Personal data management services that help them do this better and more safely, and do more with their data, therefore have the potential to become ubiquitous.” 

Having this type of relationship with people will ultimately be good for business. “Brands working with these services have the opportunity to build customer trust, prevent customers ‘going dark’ on them, access additional volunteered data and use this data to provide new services,” says Mitchell, who is running a conference on the personal information economy on 20 March.

Access to personal data

Nigel Shadbolt of the Open Data Institute (ODI), an organisation that he founded with Tim Berners-Lee, who invented the World Wide Web, believes that “the most effective personal information services understand that there is a much richer dialogue if you enter into a conversation with your consumer and your business, where there is a flow of information and data back and forth” (see Viewpoint, below).  

Personal data store Mydex is a member of the ODI, and is one of the Government’s nominated ‘identity assurance’ providers. People can sign up for free to store their address, employment and credit card details privately, and organisations can automatically populate the data store with details if consumers allow them to. Businesses pay a ‘connection fee’ to access the data and there are six companies going through that process.

Meanwhile, Midata, which was launched in 2011 by the Department for Business, Innovation and Skills, works by giving consumers better access to the electronic personal data that companies hold about them, with the aim of giving consumers greater control. 

In July 2013, the Midata Innovation Lab was launched with backing from the Government, to get companies in the energy, telecoms, bank and credit card sectors involved in innovations to share data with consumers, organisations such as The BBC, Telefonica, Aviva and Npower joined the initiative. 

But what kind of uptake can these services expect from people? Colin Strong, managing director of business and technology at market research company GfK, says: “This is still considered to be a minority activity; brands have not fully grasped the extent to which this is an opportunity for them – but it is also a threat if they do not engage in this.”

Consumer needs

Research by GfK seen exclusively by Marketing Week validates this point. The flow of information depends on the ‘value exchange’: consumers would supply more information to companies that provide better services or save them money. The study shows that 28 per cent strongly agree that they would provide companies with more information if it helped them to save money and 43 per cent agree somewhat. 

In addition, 13 per cent strongly agree that they would provide companies with more information if they received a better service as a result and 41 per cent agree somewhat.

But Steve Edwards, executive director at agency Manning Gottlieb OMD suggests that people will not engage with the label ‘personal data services’. 

“Personal data services will evolve and become part of our daily lives. They might not be called ‘personal data services’ and use terms like ‘control over data’, but they will emphasise the simplification of life,” says Edwards.

Although the industry seems to be growing, it has the potential to gather momentum if businesses are forced by law to give back data to people. Minister for consumer affairs and equalities Jo Swinson spoke to Marketing Week last year about why brands should not be reluctant to release data to consumers and about the threat of regulation should they fail to do so.  

Last summer, information commissioner Christopher Graham warned that people are waking up to the value of their personal data, and that companies which fail to handle people’s information properly will lose their trust and even their business. 

A matter of trust

Although the new personal information economy is an exciting industry, brands that get involved must be trustworthy. Graham cites the NHS’s care.data programme, a scheme that pools patients’ information and enables researchers to access anonymous medical records, which has been put on hold because the benefits had not been communicated sufficiently to the public.

Meanwhile, brands such as Barclays, Tesco and crowd-funding site Kickstarter all made headlines after suffering data breaches. Statistics released by the Global Research Business Network highlights a lack of trust across all types of organisations when it comes to data. 

David Alexander, chief executive at Mydex, says: “I believe privacy is everybody’s right but we will never move forward if we make that the central argument. The central argument is about improved efficiency, improved consent and collaboration and clarity of purpose – knowing what happens when I tick a box and when I share data.” 

He adds: “Privacy is one of those emotional subjects, it has woken people up to having a more secure way of managing their data and transacting. You cannot avoid the conversation but I do think you need a balanced argument.” 

It is this balance that will effect whether data services take off, says Archna Luthra, clubs manager at MoneySavingExpert.com. 

“Privacy and security is rightly a consideration. If people do not trust the service they are getting or what is happening with their data, then businesses will falter when it comes to getting these services off the ground. If you put too much emphasis on it, it might scare people away, even the early adopters. It is a fine balance but a valid consideration.”

Better targeting

Personal data is not always the issue when brands and services are looking to create better offerings. Westfield shopping centres work with nFluence, a company that creates user-generated profiles to transform how advertising targeting works, driven by information volunteered by consumers. 

Privacy is everybody’s right but we will never move forward if it becomes the central argument – that is about improved efficiency, consent and collaboration

Customers are asked to move tiles on a screen to show which brands they like or dislike and the results are used to build a detailed profile on that person. That profile, called an autograph, is fed back to the consumer to ensure it is accurate and they are then sent targeted offers. 

The campaign won the mobile category at this year’s Data Strategy Awards.

Henry Lawson, chief executive at nFluence, says: “Consumer-powered marketing is putting the power back in the hands of consumers. We are finding that if you give the power back to the consumer, a level of trust will develop with brands that makes for a more productive relationship.” 

Lawson believes that most personal data services have a low take-up. So these services, many from start-ups, are still in the first stages. However, schemes such as Cheap Energy Club have over 1 million members. 

Shadbolt at the ODI says: “It is early days and it will be wrong to believe that the personal data economy is mature, but I think we will see it move very quickly. It will be counter-productive if [brands] do not have a play or a corporate view about how they place themselves in this new data exchange that will happen.”