Saturday, July 05, 2008

Dangerous Ideas: Consumer Empowerment, Data Harvesting and Value Reclamation

There has been a lot of discussion about consumer empowerment in the web 2.0 era. Stories abound of bloggers airing grievances and staging boycotts as well as consumers recording experiences with call centers and posting them on YouTube.

Much to the chagrin of many corporate entities technology has created a new, unprecedented level of consumer empowerment. My message to all is "brace yourselves, you ain't seen nothin yet". What has transpired thus far doesn't amount to much more that publicly aired letter writing campaigns. As technology that leverages access and manipulation of data becomes increasingly accessible to consumers the type of empowerment will move beyond the ability to simply "air grievances" and enable them to redefine the nature of interactions between individuals and corporate structures. Just as technology ended the unilateral control of cultural transmission, the unilateral control of data will come under increasingly destabilized.

A current, call for entries in the UK entitled Show Us a Better Way seeks proposals for innovations that leverage the use of public data. You can expect the subject of "mashable data" and legal issues surrounding access to data to become increasingly hot.

Harvesting Consumer Data
For several years, in private conversations I have been trying to make the point that consumers have been being striped of valuable behavioral data without getting anything in return. This can be justifiably viewed as a "harvesting" not unlike having a kidney stolen by a Las Vegas prostitute. The comparison may be slightly dramatic, but I'm leverage this urban myth to make an important point.

Oblivious consumers have been kept intentionally unaware of that value so that they unwittingly give it up for free on a constant basis. Discussions of data usually revolve around privacy issues. From a consumer perspective there is an issue of value that has gone unnoticed. These inequities that have skewed in favor of corporate interest aren't going to last much longer. Why should people give away this equity?

Every time a consumer subscribes to a magazine, uses a credit card to pay for a meal or a pair of shoes, visits a website, or uses a silly Facebook application they create a data point that someone else can use to profile them, build predictive models of people similar to them or bundle with others data and sell to marketers.

From an entrepreneurial standpoint, it's only a matter of time before a few daring individuals realize the value in getting on the consumer side of this battle. My mediating the transparency and flow of data, control over the flow and value of this resource could be reclaimed.

Imagine a service that would mask consumer transactions. A software based service would mask purchases and transaction on your behalf, bill you for it and arrange the shipping to you so that the business you've made the purchase from you doesn't know who you are. This works much more effectively in instances where we are talking about bits and data as opposed to atoms (purchased hard goods).

Is this the realm of science fiction? A credit cards with advanced security features that maintains the anonymity of the user? Swiss bank accounts used to perform a similar service.

Services and tools that act as anonymous clearing houses for transactions would empower consumers to be able to negotiate the value of that data. They could then decide what to do with this valuable resource: keep it secret, sell it marketers themselves or demand kickbacks or discounts on purchases. Not all consumer data has the same value. The data value for high net worth individuals and people who make higher volumes of purchases could certainly demand more.

This isn't science fiction speculation. Data is a fundamental, almost natural resource in the information age and people will increasing see that it is so.

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