Back in October, I wrote a piece on the effects of moving a large portion of our lives to the online community, not to mention where all that data goes, who has access to it, and how it's being used. In the article, I mentioned a company called Bynamite, which launched software last year that allows consumers to track which sites are tracking them. When it comes to managing what you spend (and do) online, there's a corollary to buying/shopping that Bynamite Co-Founder Ginsu Yoon observes when he notes that "There should be an economic opportunity on the consumer side. In a few years ... a person's profile of interests could be the basis for micropayments or discounts." He also says, "The problem is that right now so much of this is done in the dark with online companies effectively looking over your shoulder while you are online and have no idea your information is being shared."
There were several comments on the piece, one of which came from Eliot Bergson, Director of Web Services of a new company called Statz. Statz is an intriguing upstart, with an idea that has the potential change the way online data is aggregated and analyzed -- with the added bonus of you, the consumer, getting paid for the information you provide. Many consumers may balk at this idea: after all, who wants to provide truly personal information? That's irrelevant here, because one of the best parts about Statz, in my view, is that they could care less about your actual phone number, zip code, credit card numbers, etc. Where the value lies is in your behavior.
CEO Cameron Lewis gave me the following example: "Companies like Google and even Facebook know what you're doing online. You're typing in the search terms, and they're providing ads that correlate with that information -- they're behavior rich, but identity poor. Demographics companies like Acxiom know plenty about your identity, but nothing about your behavior. What's most valuable to companies seeking data is the combination of these two aspects, and the longitudinal effects. At Statz we seek to validate individual information and quantify it with behavior. So it's validated, but anonymous."
For example, say you go to the Statz website and enter your mobile phone information to be tracked and analyzed. Your phone number and all of the numbers you call aren't even recorded by Statz -- they simply look at the area codes, whether you're calling or texting, what device you're using, what network you're on, etc. You, as the consumer, enter nothing "personal." As for data buyers, they receive the information they want to facilitate better market research and customer targeting activities.
Of course, from a consumer angle, perhaps the biggest question on everybody's mind (mine included) is "How much will we get paid" for participating? To be perfectly honest, the people I spoke to at Statz don't know at this point. "Back in 2006, there was a Harvard Business School article that valued personal data back in 1998 as worth $75 billion," Lewis told me. "That was in 1998 dollars. And that was before Google," he went on. Frankly, it seems that at this point we can only wait and see -- and there are three things that will contribute to the fair valuation of personal data in each circumstance.
First, consumers need to be incented to provide data in the first place. Second, users need to take into consideration how much data they want to provide. By inputting behavioral and even data around the types of personal exercise/transportation equipment you use (e.g., Statz has a health and fitness section where you can input things such as your bike, biking habits, pedometer usage, etc.), an individual's profile becomes more valuable.
Finally, the valuation will require additional longitudinal insight to develop -- how often are you riding that bike? And how often are you buying a new one? And are you biking ten months of the year in California, or five months of the year in Chicago? If you're in Chicago, what are you doing for exercise during the brutal winter months? All this information is worth something -- and like a fine wine, it only becomes more valuable over time, when combined with your identifying information.
Lewis' main point in our conversation was that "data should be controlled by the consumer, and the consumer should have a pure set of benefits that come from ownership and control." I must say that I agree with him, and I'm pretty curious about where Statz will go and what shape the data community will take from its introduction into the marketplace. By "de-identifying" your own personal data, as Statz puts it, and mashing it with behavioral aspects over a period of time, Statz is looking into a new realm of data buying and selling, one anonymous user at a time.