Personal Data: From Ultimate Commodity to Ultimate Asset

A while back John Thornhill wrote an interesting article in the Financial Times on the role platforms like Facebook can play in establishing a universal basic income via data. Here is the crux of his argument:

“The most valuable asset that Facebook possesses is the data that its users, often unwittingly, hand over for free before they are in effect sold to advertisers. It seems only fair that Facebook makes a bigger social contribution for profiting from this massively valuable, collectively generated resource.

His shareholders would hate the idea. But from Facebook’s earliest years, Mr. Zuckerberg has said his purpose has been to make an impact rather than build a company. Besides, such a philanthropic gesture might even prove to be the marketing coup of the century. Facebook users could continue to swap cat pictures knowing that every click was contributing to a greater social good.”

 

Personal data represents a post-industrial opportunity.

In 2011 The World Economic Forum classified personal data as a new Asset Class along with property, investments, cash, etc… laying the foundation for rethinking models for how data can be utilized to deliver value to the owners and originators, not just the users. In the original report issued by WEF and Bain, they call out both the technical and philosophical challenge:

“At its core, personal data represents a post-industrial opportunity. It has unprecedented complexity, velocity, and global reach. Utilising a ubiquitous communications infrastructure, the personal data opportunity will emerge in a world where nearly everyone and everything is connected in real-time. That will require a highly reliable, secure, and available infrastructure at its core and robust innovation at the edge. Stakeholders will need to embrace the uncertainty, ambiguity, and risk of an emerging ecosystem. In many ways, this opportunity will resemble a living entity and will require new ways of adapting and responding. Most importantly, it will demand a new way of thinking about individuals. Indeed, rethinking the central importance of the individual is fundamental to the transformational nature of this opportunity because that will spur solutions and insights.”

The launch of data privacy regulations such as GDPR in the EU and various U.S. state-level laws have begun to codify these principles, pushing the transformation of personal data from commodity to asset further. Virtually every country and many states have enacted some sort of data privacy laws to regulate how information is collected, how data subjects are informed, and what control a data subject has over his information once it is transferred.

 

However, the functional systems to support this change are still evolving.

We have come far in developing the technologies that can enable the management of personal data in a trading environment; in fact, various applications of Blockchain technology show great promise as the underlying architecture to power the trading of data as a type of digital currency and is rapidly evolving as a transformative model for transactions. AI and “Big Data” models have largely addressed the type of analytical frameworks needed to combine data sources, and from the marketing, the world advances in attribution, single-source, and programmatic ads have proven we have the systems to use personal data to deliver highly targeted content (in the form of ads and recommendations) in almost real-time based on the digital treasure trove of data available.

However, and as John Thornhill pointed out, today consumers’ data is simply used without direct reward to the consumer. It’s a barter system: “let us use your data so we can try to sell you more stuff, and in return, you get access to these nifty technology platforms”. That has been fine, but it’s a far cry from treating data as an asset class that can generate not just value but real financial gains for consumers.

What is missing is not just a shift in thinking, but also a fundamental reshaping of the value exchange. In short, we need to stop treating data as an easily accessible commodity and start paying for it as a precious resource. We need a new, global asset transaction network to kick-start a new system.

Fundamentally people do things because they get something out of it.

We take action because it fulfills a need, whether unconscious or conscious. This core motivation is central to every school and application of behavioral science. Game Theory and Behavioral Economics specifically have taught us that a system of incentives and rewards are necessary to engage humans. In general, this system can be boiled down to a few key categories:

1. Social: connects us to others for fun and social interactions. Think all the games on Facebook or online game networks.
2. Financial: delivers a direct financial reward such as research incentives, discount or deal networks, personal data lockers, or recommendation systems.
3. Values: altruism, charitable causes, political or social campaigns, or anything else that is aligned to our values.

The ideal system combines all of these, and the market research industry has actually pioneered quite a few examples in action via the advent of online communities and there is much to learn from that model that could be applied throughout the research industry but also in support of the creation of a personal data economy.

 

This system looks something like the example below:

1. A brand wants to engage in a long-term dialogue with a subset of consumers to explore new product ideas.

2. Participants are identified via profiles established in panels or in social media that are linked via a personal datagraph and unique ID, managed by (or on behalf) of the consumer.

3. Targeted consumers are recruited and paid a financial reward for engaging.

4. Exercises are “gamified” they are sent on missions, earn badges and ongoing rewards, and discuss their ideas and the ideas of others in forums within the community.

5. Results are shared back so participants can see how their contributions are making a difference in coming up with new solutions to issues that impact their lives.

 

This approach to creating a real, engaging motivational framework for consumers to share their data is a good example of how we can rethink the value of personal data and how people can gain more than just access to apps for its use. That model of value-exchange works for sure and has created value for all sides in the exchange, but it has limitations. A multi-dimensional system that has real incentives and rewards that pay consumers for their participation in an accretive way not only is fairer, it also drives the shift in thinking necessary to support the emergence of the personal data economy. Whether it’s getting a “data access annuity” from Facebook or Google, direct compensation for participating in research or data analysis initiatives, or receiving goods and/or services as a “lease” on consumer data access each model has a fair value exchange for consumers at its core. No longer a tactical afterthought, they are the tip of the spear in leading a transformation in how consumers use their data for their own benefit vs, others using it for their own gain. Direct reciprocity simply changes the game.

Many companies are pursuing this idea and gaining traction. One of my personal favorites is Veriglif; in fact, I am a co-founder, Director, and function as CSO as we work to “walk the talk” and bring this vision to life.

 

Veriglif is a dual-sided platform that offers:

• Direct-to-consumer monetization and transparency to users looking to monitor and reclaim their personal data, and create new opportunities for personal revenue.

• B2B network to consolidate and validate consumer data for businesses/advertisers — adding tremendous value to their consumer insights.

 

Users will be able to participate in the marketplace from anywhere in the world via a mobile app and/or browser extension.

By sharing their profile, behavioral, and attitudinal data through a private portal, they will be in total control of how their data is used, and be able to benefit monetarily from its use. This foundation will in turn create new monetization opportunities via microtasks and gigs where user’s time and experience can also be part of their monetizable personal assets. Partnered businesses will be able to access this information in a fashion fully compliant with GDPR and other data legislation, and parse out valuable insights through a completely above-board system.

All in all, the Veriglif network SaaS platform will enable user data to be validated, inventoried, and transacted in a way that will create value for all stakeholders. In effect, the goal of Veriglif is to turbo-charge the personal data economy vision outlined above via one, integrated, and centralized platform.

 

We have only just begun.

The debate around personal data ownership and value, alternative and universal income schemes, and the role of technology in making it all happen will continue to be important topics over the next few decades. However, incentives and rewards will not only be a big part of that dialogue, they have already gone far in solving many of the practical issues. Building on their firm foundations, the future of the personal data economy looks bright indeed.

By the way, in keeping with this “for the people, by the people” approach, Veriglif is currently engaging in an equity crowdfunding program via StartEngine. If you want to be a part of transforming personal data from the ultimate commodity to the ultimate asset, check it out here. Below is a brief explainer video as well.

 

Photo by Zbynek Burival on Unsplash