Jed Mole

The Value of Data: What’s It Worth, and How Will GDPR Impact It?

July 18, 2017

 

73% of people agreed that in the internet age, you have to provide personal information in order to buy things. – DMU (UK)

 

How do consumers perceive the value of their data?

We know that consumers are well aware that their data has an intrinsic value – and believe their financial and medical data to be the most valuable. In fact the number of consumers who say that they see their personal information as a way to command better deals from companies increased from 40% to over 52%, according to a DMA (UK) and Future Foundation survey (‘What the Consumer Really Thinks’).

We also know that consumers today expect to see value from their shared data. Over 80% of respondents to the same survey agreed that “my data is my property and I should be able to trade it if I like (for better offers, services etc…).”

However, consumers also feel that the value exchange is often not balanced in their favour. 80% claim that businesses generally benefit the most from data sharing, with just 7% stating that consumers benefit most.

So how should we view the value of personal data? And what impact will the upcoming GDPR regulation have on this perception?

 

What Does Data Value Look Like?

According to the Internet Advertising Bureau (Europe), there is a ‘marketing deficit’ of at least €100bn per annum across Western Europe and the US. This means that if consumer data were seriously or completely restricted, leading to a huge drop in advertising revenue, then we as consumers would likely face the prospect of having to fund that revenue deficit if we still wanted to enjoy many online services for free, such as social sites and search engines.

But would consumers really want to pay to search or go social, to access for example ‘unlimited searches for £15 a month’? The irony here is that to do so, they would have to submit more personal data than they would currently, by registering and providing financial information. This also all comes before the fuss of having to log in every time, as the browser would conveniently ‘forget you’.

The alternative here is the scenario we are currently in – the continued careful use of data to enable ever more targeted and personalised digital and data-driven marketing. Of course, while not every message or offer will be perfect, surely if you’re to see an ad on your device you’d prefer it to be of some relevance rather than irrelevant? The chances are that for someone who lives in a flat, an ad for a lawnmower or garden shed is likely to be less relevant than one targeted at them based on their love of travel or fashion.

 

Visualising Data Value: A Virtuous Data Triangle

The consumer sometimes asks the question, “Why are you making money out of my personal data?” The answer is, it’s all part of the economy and value exchange.

For example; think of a triangle. In one corner advertisers such as retailers and manufacturers pay publishers and marketing technology firms (which are based in another corner) to help them reach customers, and they get services and solutions in return. In the final corner is the consumer, who pays the advertisers for goods and services, and gets value from those goods and services in return.

 

The Value of Data: What’s It Worth, and How Will GDPR Impact It?

 

So, on two of the three sides, value flows one way and money the other. However, there is no direct payment from consumers to publishers and marketing technology firms, despite consumers getting value from them in the form of search services, social media and the like. The implied payment is publishers receiving consumer data they can then use to increase the performance of their services, and get paid by their advertisers.

 

The Impact of GDPR on Data Value

So what impact will GDPR have on the way we perceive and value data?

If there is a fundamental shift as a result of the new GDPR regulations (which come into force in May 2018), it is likely that this would in turn result in a shift in the economic model above, potentially leading to an impact on consumers who may be asked to pay for some services they currently enjoy for free.

Furthermore, if the guidance results in ‘free consent’ being interpreted by GDPR regulators as meaning ‘consent cannot be a condition under any circumstances’ (i.e. unless you consent, you cannot receive a service) then, again, this could severely disrupt the ‘virtuous triangle’ model, almost certainly to the financial detriment of not only the industry but importantly, consumers. This draconian approach would also eat away at freedom of contract principles; if someone is willing to pay for services with data why should the state prevent that?

Taking this scenario to an extreme conclusion, we would potentially see the creation of a world where some countries pay for ‘free’ services, while others do not. There comes a point where this becomes untenable – undermining much wider implications of digital development and inclusivity while stunting the development of the digital economies of those ‘paid for model’ countries. This scenario seems highly unlikely, as it would have far too many knock on effects for a vast number of other businesses, who have become reliant on the internet as a sales and communication channel, as well as consumers now well used to turning to the internet as a first port of call for information and research.

 

The more consumers understand how sensible use of their data can help not only the economy but themselves too, the better

 

Some ask about personal data lockers – secure online environments where individuals can collect and store the information held on them by various businesses in order to take control back over that data. If this had been the standard approach from the outset it may have worked well. The issue is, it isn’t an approach that was applied consistently across countries and channels. The more consumers understand how sensible use of their data can help not only the economy but themselves too, the better. If personal data lockers of one kind or another help this awareness and appreciation, then that’s a good thing. The only caveat is just how effective can they be in practice; will there be one standard approach or many versions? Furthermore, it should be noted that consumers already do share their data in return for benefits such as convenience or better deals; consider price comparison sites and travel booking sites.

GDPR does have a data portability requirement that requires data controllers (with certain exceptions) to export data to other places if requested. This could be interpreted by some as an enabler of personal data lockers, however, the absence of any regulation that directly supports or encourages the operation of such technology, in particular a unifying approach or framework that enables data lockers for the masses, reflects unlikeliness that such lockers could operate at a scale that benefits consumers overall. Simply put – too many businesses hold data in too many different formats for one solution to be truly workable.

 

Giving Consumers More Control: About The Data

In the US, Acxiom launched AboutTheData.com in summer 2013; considered by some to be an alternative approach to personal data lockers. The website is a consumer-focused web portal that enables consumers to learn more about how their data helps companies create better and more relevant online experiences. Furthermore, the portal enables consumers to see basic data elements featuring significantly more attributes and a wider breadth of sources than any company had ever before made available to consumers at this scale. Once consumers access their data, they can decide if they are comfortable with it, would like to update any elements of it, or opt out – either from online marketing only or from all of Acxiom’s marketing efforts.

 

“90% of people surveyed want more control of their data.” – DMA (UK)

 

GDPR will bring with it the right to free Subject Access Requests, something aboutthedata.com provides already in the US. Experience from the US has shown that consumers, once they understand the relative low sensitivity of the data, coupled with the fact it is merely being used to provide marketing offers and a better customer experience, are far more likely to understand the value – and adjust and update their data, than they are to opt out; this is by a factor of around 9 to 1 in favour of updating rather than opting out.

Clearly once we can prove the value of data use, pragmatism increases, leading to more accurate, appropriate use for all.

Jed Mole

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