Data’s Moral Dilemma: How to monetize and at what cost?
Twenty years ago, if you wanted to buy a loaf of bread and the cashier asked for your age, gender, marital status and income to complete the transaction, you would have raised an eyebrow and marched out of the store. You might have even called your local MP or a better business bureau to lodge a complaint. In 2018, you knowingly surrender a mountain of personal data to not only make purchases but also when visiting websites or sending an email.
Has there ever been a more ethereal and less tangible power than modern digital data? Most people can’t wrap their head around how their online activity converts to data and how that data is invaluable to corporations.
With consumer awareness and government scrutiny now common, companies who want to monetize user data have a decision to make: To work with data brokers who might be collecting data in ways that might be immoral or illegal, or to treat data as sacred, an extension of personal privacy.
Data brokering is over a $200B industry. The digital world is intertwined into our modern lives. This has given way to brokers packaging our data and then selling it to retailers, service providers and advertisers. This data could potentially feature a user’s gender, age, marital status, income, purchase history, religion, interests or hobbies.
Data brokers pull data from sources and build digital profiles. These profiles are purchased with the goal of pairing them with ads or generating sales leads. There isn’t a service or product available that wouldn’t sell faster and better with the right data.
It doesn’t matter what a company sells. Knowing what their customers want or where to find new customers has given way to hordes of data brokers looking to make a buck off user information.
Facebook Takes A Stance
In March, Facebook announced that it would end its partnerships with several large data brokers who help advertisers target people on the social network, a step that follows a scandal over how Facebook handles personal information. The world’s largest social media company has been under pressure to improve its handling of data after disclosing that information about 50 million Facebook users wrongly ended up in the hands of political consultancy Cambridge Analytica.
Previously, data brokers were able to target specific sets of Facebook users, letting them bring their wider ad-targeting metrics on to Facebook. Now, they will either have to use Facebook’s own targeting tools, or a much more specific form of targeting known as “custom audiences”, which broadly requires companies to have a prior relationship with the users they’re targeting.
Facebook also announced that they would be closing down a data flow in the opposite direction, preventing the same data brokers from receiving anonymised information about how their ad campaigns have been received.
Any piece of data can be monetized. The market is endless and it drives sales and awareness if paired with the right strategy. Data solves business problems by recognizing inefficiencies, creating better customer experiences, showing where revenue is being lost and giving insight into customer acquisition.
Organizations have grown accustomed to hiring different vendors or employing various systems to prevent churn or manage sales or to lower customer acquisition costs. Data provides better versions of these services. Yes, buying, sorting, analyzing and transforming data into strategies is a big investment but it is much more efficient and reliable.
There’s an ugly side to data and the temptation to use it in negative ways will always be present. Organizations must understand the danger of data brokers or of having this kind of access. They need to draw a line in the sand, respect users and be comfortable with saying no.
The first step to ethical data usage is to honestly source the data.