Introduction
As information about each individual consumer becomes more valuable, it will soon come to pass that each person is given ownership of his or her data with all the legal protection of a copyright. In this scenario, if a marketer wishes to share information about you, he/she would have to seek your permission, and give you a royalty on the money earned. Although this type of system may be unenforceable at present, the future emergence of stricter privacy laws, “privacy agents” and “digital privacy intermediaries” may make it a reality.
The Challenge
The current personal data ecosystem is wrought with problems and inefficiencies and is best described by the World Economic Forum report entitled: Personal Data: The Emergence of a New Asset Class:
“The current personal data ecosystem is fragmented and inefficient. For many participants, the risks and liabilities exceed the economic returns. Personal privacy concerns are inadequately addressed. Regulators, advocates and corporations all grapple
with complex and outdated regulations. Current technologies and laws fall short of
providing the legal and technical infrastructure needed to support a well-functioning
digital economy. Instead, they represent a patchwork of solutions for collecting and using
personal data in support of different institutional aims, and subject to different jurisdictional
rules and regulatory contexts (e.g., personal data systems related to banking have different purposes and applicable laws than those developed for the telecom and healthcare sectors).”
What is an Infomediary?
An infomediary is a business that works for and on behalf of a consumer to organize and monetize their data for release to authorized companies for a price.
Authors of the popular book NetWorth, John Hagel III AND Jeffrey F. Rayport, in the June 2000 McKinsey Quarterly, define an infomediary as: “a business whose sole or main source of revenue derives from capturing consumer information and developing detailed profiles of individual customers for use by selected third-party vendors.”
There seven rules of success for digital-age infomediaries are:
1) provide value for businesses and consumers;
2) promote trust in online transactions;
3) become experts in specialized industries;
4) respect information privacy;
5) achieve critical mass;
6) gain first-mover advantage; and
7) take advantage of information commodities.(1)
(1) Source: Infomediaries in Information Economies by Bethany L. Leickly, copyright 2004.
How is My Own Data Similar to an Infomediary?
My Own Data – is an on-line digital Privacy Broker offering it’s users specified benefits.
- Represents the consumer not the direct marketer.
- Provides a secure, universally accepted electronic data format.
- Is a clearinghouse for consumer data.
- Protects and reimburses consumer for the use of their data.
- Keeps data current and therefore, valuable.
- Manages and completes the sale of data to third parties and ensures that the consumer receives reimbursement for forward use.
- Negotiates with providers to accept a common data format.
- Works with credit bureaus to update financial data at cost.
- Provides consumer with data updates.
- Additional on-line services through web site.
- Includes a legal contract for retailers and provides recourse for consumers against unscrupulous retailers.
- Businesses /Direct Marketers get current data, electronically.
- Totally Electronic, customized for different products.
- Convenient – makes buying much easier.
- Consumer receives fee for use of data.
- Consumer gains control over what promos they receive.
What is a Privacy Broker?
A privacy broker is someone who acts on behalf of individuals to ensure they are financially compensated for the use and exchange of their personal data. Here’s how it works:
- If someone wants information about you, they approach the broker, My Own Data, and negotiate a price.
- If the marketer wants more information, the broker gathers it from you and/or third party brokers and sells it to the marketer. Although the marketer can try to get the information directly from you, it is much easier and ultimately less expensive for him/her to get it through the privacy broker.
- Of course, the customer always have the right to refuse a request for information.
- We provide a common electronic format to the customer’s data.
- That serves as a contract between the consumer and any of these parties, around the world, who want to sell you things.
- We ensure that when customer is being sold, they get paid a fee.
The Digital Dossier
It is my strong belief that the profession of privacy broker could become big business in the digital age. A privacy broker will sign up individuals and build a huge database dossier on their:
- general demographic information
- lifestyle,
- credit history,
- medical history,
- buying habits,
- preferences,
- hobbies,
- avocations,
- political and religious beliefs,
- needs,
- wants.
Each level of information has a cost to it and varies based upon the relative sensitivity of the information (like credit history and medical history). My Own Data will maintain a data warehouse, constantly cleansing the data to ensure that it is updated. External services will be utilized when need be (i.e. credit bureaus). My Own Data will receive a sign-up commission, plus a royalty on all contracts signed with marketers. Marketers will pay privacy brokers for each new prospect because the data they provide is timely, accurate, and comprehensive.
Digital privacy intermediaries:
As the amount of marketing information explodes in the digital economy, services will spring up to help you keep your personal privacy, while helping you get the information you need. I call these services Digital Privacy Intermediaries (DPI). A DPI (such a MyeSafeDepositBox.com) provides each client with a private fax or email mailbox. As a subscriber, you fill out a monthly survey indicating what products and services you’re interested in buying over the next few months. Your DPI reviews promotional material form marketers (who pay to use the service) and sends information which matches your stated needs to your fax mailbox or email account. The marketers do not know your identity, yet they know they’re reaching you with information you have requested. As a subscriber, the benefits are substantial: You receive a free fax mailbox, get the information you want, and protect your privacy all at the same time.
As time goes on, DPIs will become a primary digital marketing tool for reaching new prospects. The cost of sending a promotional message through a DPI will be much higher than it is for mass direct mail, but a DPI system will provide a much more targeted audience. Of course, once the prospect responds to your message (distributed through the DPI), you can enter them into your customer database, if they consent.
