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Sunday, January 23, 2022

Monitizing Personal Data

 Repeated after reading, well done.   Did a big project on related questions and how they drove decisions.

Monetizing Your Personal DataBy Keith Kirkpatrick

Communications of the ACM, January 2022, Vol. 65 No. 1, Pages 17-19, 10.1145/3495563

During the initial wave of commercialization of the Internet in the mid-to-late 1990s, companies began collecting personal information from visitors to their Websites. The value proposition laid out by Internet companies seemed simple: allow companies to track and capture user behavioral and demographic data, in exchange for free access to content, as well as a more personalized and tailored experience that was based on an individual's browsing and shopping habits.

However, few users or market observers could have projected the evolution of the market for data, which has become far more complex and valuable than previously imagined. In fact, large companies such as Google, Facebook, Amazon, and Alibaba, among others, have generated massive profits by leveraging the data collected, not only using it to improve the personalization and usability of their own sites, but by reselling that data to advertisers, to the tune of billions of dollars per year. In fact, March 2021 data from eMarketer indicated the Internet advertising market generated $378.2 billion in 2020, and projected that figure will rise to nearly $646 billion by 2024.

"Everything you do creates data that's being bought and sold," says George Stella, chief revenue officer of BigToken (bigtoken.com), a data broker that enables consumers to collect revenue from the use of their personal data. "So, the ad tech industry has collected a ton of information from people without their permission over the last 20-plus years, and made billions and billions of dollars off of it."

A key barrier to empowering people to generate revenue from their data is awareness. "Less than 200 or 300 million people out of 7.1 billion people globally are even aware that their data is being used or sold, and that they can actually benefit from these sites," says Sagar Shah, client partner with artificial intelligence (AI) technology firm Fractal (www.fractal.ai).

While the Internet advertising market is massive, putting specific monetary value on each individual user's personal data is highly variable, not only due to people's different demographic profiles, but also to the type of data and its relative level of abundance or scarcity. For example, data on demographics that are in limited supply (such as data on Middle Eastern male consumers) is more valuable than demographic data on white millennial women. Similarly, the browsing data of individuals seeking to purchase a Tesla or Ferrari automobile within the next month would be valued more highly by data brokers and advertisers than the data of someone browsing for the best deals on a used Chrysler minivan.

Regardless of the type of data, personal data has value on both the legitimate advertising market and the black market, where stolen records can be sold to various parties. Data broker Invisibly (www.invisibly.com) provides a listing of various types of data available for sale on the dark web, ranging from a Social Security number (valued at just $0.53) to a complete healthcare record ($250). There also is significant value attached to personal information that is collected, bought, and sold through legitimate operations, such as data brokers and Internet advertising firms.

Left out of this equation are the end users generating that data who, for the most part, do not share in any of that revenue. Enter companies such as the aforementioned BigToken, Invisibly, and Killi (killi.io), each of which serve as middlemen or brokers between consumers and the companies that collect data. The goal is to create a user ownership model in which consumers retain more control over their data, who is permitted to capture it, and who can profit from it.

"There's a whole industry built around the unscrupulous gathering of customer data to optimize sales," says Rick Hoskins, founder of Filter King, a seller of HVAC filters via its eponymous online site. "We take a lot of care not to source customer data unethically. As a business owner, allowing normal people to monetize their data would take a massive weight off my shoulders. It would cut the knees out from under this sketchy shadow industry stealing people's information for profit. Not only would it give us, online marketers, access to more data, it would let us access it ethically."

The goal of data brokers is to allow consumers to decide which information may be shared with advertisers, then share in some of the revenue generated by its use. These services ask users to sign up on the Web or via an application, connect their social media and Web accounts, then ask them to answer specific questions about their interests. Based on the data provided and collected initially and over time, the brokers will place users into segments, and advertisers can purchase access to data from one or more segments for use in personalized advertising. Each time their data is shared, or advertisers purchase access to a segment in which the user's data has been placed, the user can earn points, rewards, or cash. All the data brokers note that they store their user data on the cloud using a variety of encryption and security protocols, and that the end users with whom they work can opt out of having specific data shared if they so choose.

The goal of data brokers is to allow consumers to decide which information may be shared with advertisers, then share in some of the revenue generated by its use. .... ' 

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