The Beginning of a Consumer-Centric Data Monetization & Privacy Model?

March 24, 2011 at 11:57 am 1 comment

A way for the big data industry to share the wealth with consumers and expand control over privacy.

By Terence Craig

There was a great article posted in All Things Digital about a company called While the article focused on the viral nature and the security implications of their launch (which says troubling things about consumer security awareness or lack thereof), the bigger story (IMHO) is the company’s business model. is developing a solution that centralizes control of a user’s digital identity, creating a peer-to-peer relationship between the consumer and brands. So instead of consumers “liking” a company’s Facebook page, they could have a deeper and, potentially, more meaningful relationship. In the video embedded in the article, one of’s founders, Drummond Reed, likens this to a CRM solution for the consumer where a trust relationship between the consumer and each vendor is established and based on this relationship, the consumer decides how much personal information is shared.

As someone who is writing a book about data privacy and is CTO of an analytics tools vendor, I have been wondering when technology would be introduced that would let consumers control their personal information and treat it as a valuable asset. looks like the first step towards that future because they offer a central way for consumers to put themselves back in control of how their data is shared. This is very similar to what Mary described in this recent post.  However, I think the centralized management of individual consumer’s data has deeper implications than better privacy controls. It shows social media companies and other data collection and analytics companies a way in which they can continue meteoric growth amid increasing privacy concerns and growing calls for tougher regulation.

Currently, consumers trade immensely valuable personal information, including their buying behavior, demographics, social graph, contact information, and eyeballs to Facebook and other social media giants, for a useful and enjoyable experience. But they don’t receive any direct financial benefits for sharing this treasure trove of data.  In fact, many “free” website users aren’t even aware that the collection and sale of their data and eyeballs is how they are “paying” for site access.

As social media becomes an even larger part of our daily lives, privacy concerns will also grow. And with Twitter, Facebook, etc., receiving multi-billion dollar valuations based on the selling and analysis of their users’ personal information, consumers are becoming more aware that they are the most valuable asset these companies have. Soon, consumers will not only demand greater control of how and with whom data about them or derived from them is to be shared, but will want to be compensated for use of that data. It seems only fair to give a little cash back to the producer of this asset (consumers) as the reason these companies are so valuable is their users’ (singularly and as groups) personal information. In other words, since social media companies turn their users into giant Nielsen panels, they, like Nielsen, should pay for that privilege with more than social features on their websites.

Without the cooperation of the social media giants, it will be very difficult for an effort like’s peer-to-peer “trust framework” to be successful.  And after all, why would companies like Facebook want to give up control and pay users for selling their information?

They don’t.  But if the consumer data industry, that includes Social Media portals and analytic tools like our own PatternBuilders Analytic Framework, do not offer consumers both fine grained control and the ability to partake of the wealth being generated, we are likely to be regulated out of existence. Or see the industries tremendous growth stalled by lack of trust.

The debate over who owns personal information has been getting louder. It is in the industry’s best interest to work with consumers to attain a more equitable playing field in the form of some concrete benefits (a monetization share) and more fine grained privacy control. If not, consumers will demand that their governments regulate our industry much more forcefully.  We must come up with an equitable solution and’s technology seems like good start. Failure to address user privacy concerns and share the wealth could turn one of the greatest success stories, for both the technology industry and individual consumers, into a historical footnote.

Disclaimer: I have no association with its founders or investors – I just think it’s a great idea.

Entry filed under: Data, General Analytics, General Business, Technology. Tags: , , , , , .

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