Home Business NewsTech News Mark Howley: The rise and rise of the personal data economy

Mark Howley: The rise and rise of the personal data economy

by LLB Editor
16th Jun 14 8:00 pm

Mark Howley, group managing director of ZenithOptimedia, explores the growing awareness of the power of data

As the internet celebrated its 25th birthday, its founder Tim Berners-Lee called out for an Internet Magna Carta to protect the independence of the medium and the rights of users worldwide. We are seeing more companies come to the fore that are putting the power to collect and manage online data back into the hands of consumers. Surprisingly, it’s not just smaller brands that are taking this approach; we are also seeing big brands developing new ways for consumers to take greater control. Are we shifting towards “the web we want” that Berners-Lee seeks where consumers are more in control of their data? And if so, where is the benefit for brands?

The business of collecting data is not a new concept and has actually been around for decades. Consumer data use has generally always been a two way transaction, with companies such as Tesco introducing the Clubcard as a way to give value back to consumers in exchange for personal details and in-store purchase information. However, with the growth of digital and the sheer volume of data being generated today, a new economy is emerging, whereby control over data is handed back to consumers. This greater control and awareness over spending patterns allows consumers to make more informed decisions about future purchases and interactions. Interestingly, this can be a real asset to companies when trying to build consumer trust and operate transparently.

Contrary to common belief, many consumers are comfortable with sharing data if they feel it has a useful benefit. Recent research by GfK revealed that 56% of consumers would share personal data if it helped them make better decisions, and 60% if services provided were more tailored to their needs. One example of how this has been put into practice is the government’s efforts to increase competition across the energy sector by making it compulsory to place a QR code on every bill so energy consumption data can be uploaded by the bill-payer onto price comparison sites. This subsequently gives UK consumers instant access to market-wide comparisons, helping them to attain a better deal or switch to alternative tariffs where necessary.

Consumer awareness of the value of their own data has led companies such as Yes Profile to grow. The company allows users to create a profile, ticking the brands and interests they like to interact with and set up direct relationships with advertisers. The consumer can then rent out their profile and select brands they wish to share information with while charging a fee. This is a world away from brands which simply collect information and build a profile of consumers. There is far less prediction here as consumers are directly telling a brand they are happy to engage with its products and services. In the UK, Westfield has adopted an approach that is similar although without the attached fee. The shopping centre takes a collaborative approach that allows its visitors to use a mobile app whereby they move tiles on a screen to choose the brands they like and dislike to help the consumer receive more relevant, targeted offers.

The growing awareness of the power of data is resulting in “personal analytics”, an emerging phenomenon that certain sectors are using to great effect. How consumers feel about data in the context of their everyday lives is set to really evolve as new devices penetrate the market on a large scale. Very soon, consumers will be able to micro-manage their personal data through the use of apps and mobile devices – the much talked about “internet of things”.

The utilities sector is seeing huge benefits from the connected home. These brands will be able to develop a real-time understanding of usage patterns, while simultaneously allowing consumers to take greater control of that same usage. This will help energy providers calculate bills more accurately, as well as presenting an opportunity to greater personalise tariffs. For a sector that struggles with consumer trust, this will be a real step change. The consumer becomes more empowered and in turn, the brand benefits through providing a more relevant product offering.

In an era where consumers are savvy to just how much their data is worth, brands need to be even more aware about striking the balance between using consumer data to better target communications, while offering the right incentive to make this a worthwhile exchange for the consumer. In addition, businesses now need to be aware of the opportunities that exist for consumers to use data to their advantage and the empowerment that access to data provides.

As digital touchpoints continue to grow, brands will be under ever greater pressure to educate their customers about data-use and the benefits it provides. Yet, some savvy-businesses are already starting to realise that handing control back to the consumer and developing a more open relationship can be the solution to building consumer trust while improving the bottom line.

Mark Howley is the group managing director of ZenithOptimedia


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