Whose data is it anyway?

Fake news, data capitalism and toxic social networks

Internet business models are shifting

Build great services, offer them for free, attract hundreds of millions of users and monetise their data.

A tried, tested and wholly successful business model that has fuelled the internet since its inception. A delicate balance of providing services that people value without sullying their experience with too much ‘paid-for’ interruption. On the face of it a system with competing tensions to grow user engagement alongside advertising revenues could quickly destroy value for all parties if not kept in check.

But stickiness of services for the user (habit/addiction/gratification) coupled with access to global reach on the side of the advertiser means the system has strong forces keeping everything running in equilibrium. Small deviations in user experience have limited effect in short-term metrics but build quietly over time until there is enough latent energy in the system to unsettle things.

Many of these changes are now bubbling to the surface; driven by two fundamental changes in the value exchange of their users:

1.     User data is now richer, more detailed, more descriptive, more personal and more valuable than before

2.     The leading global services are seeing their value eroding as quality and relevance of content is becoming harder to manage at scale

The value of user data is growing exponentially whilst the quality of services being traded for it are diminishing.

More data + more value

To date we haven’t minded sharing discrete bits of data about ourselves in exchange for great free services – most of us can live with knowing that we’ll get hit with some mostly benign (read poorly targeted) advertising every now and again.

But when the data we are sharing includes your whole life’s photos, personal emails and documents, audio streams from your living room and maybe even your DNA then that value judgement changes. Richer data has more value, is more personal and is more sensitive but the value exchange remains the same in most services.

Coupled with the recent advancements in AI (deep learning specifically) this richer data can now be quickly processed for profiling and insights. The growing monetisation potential of having large user data stores is evolving much faster than our comprehension of what’s happening and far ahead of our favorite services having the data control tools in place for all of us to manage what and how we’re sharing.

Service value is eroding

Whilst user data value is growing the global services we are all trading for them are rapidly diminishing in value.

Sullied news feeds, irrelevant sponsored posts, poorly targeted ads and increasing social interruption from brands and other hostile ‘agents’ is pushing many users to more private forums.

The leading service providers are grappling with the growing challenges of global scale.

GDPR provides a convenient smokescreen to radically re-evaluate service design and data business models as part of normal operations – and it potentially opens the door to new entrants who can move quickly.

A tipping point maybe coming.

Future opportunities

There’s too much value at stake for these services to disappear overnight but they risk intensifying erosion if they don’t adapt and change.

‘Free’ is a hard proposition to compete against but there’s an opportunity for new service models to be created by the incumbents and new entrants.

DATA TRADING VALUE: (Facebook, Google)

Leading brands are struggling to balance divergent needs of their user’s vs advertisers (FB / Google). Increasing advertiser utility can reduce user value.

Incumbents: fix product and service quality issues; innovate on hybrid user data models, provide a mix of data management models across services

New entrants: more transparent business models with enhanced data management and control features; data privacy at heart of the service offering, still monetise some user data. New marketplaces for directly trading user data.

RECOMMENDATION VALUE (Amazon, Netflix)

Leading brands in this segment are growing; this will become trickier as their products/services diverge and start collecting even more personal and descriptive private data (eg. home assistants, store cameras); the pressure to deliver on-going service improvements grows exponentially with ever more data collection.

Incumbents: continue focus on service innovation and scale successes; respond quickly and transparently to user feedback, build trust around new forms of data usage

New entrants; vertical specific offerings with deep mining of user data to genuinely provide better quality services tailored for individual users (medical, sport, nutrition, media)

BRAND VALUE: (Apple Logitech)

The leaders in this segment are challenged with maintaining high levels of brand/product desire and delivering a high quality of service without direct access to user data.

Incumbents: continue product led innovation whilst strengthening private data position/service

New entrants; develop vertical specific services with data privacy at their heart (healthcare, sports/fitness/wellbeing, insurance)

USER VALUE: (Signal, others?)

This segment is appearing with open source projects, like the encrypted messaging app Signal, built around the provision of free to use private services that do not have access to your data. This segment could also start to contain a suite of discrete services from the leading global brands as part of a wider portfolio offering (ie. the provision of a range of services with varying pricing and privacy options).

New entrants: opportunities for decentralised platforms to enter data management and services market alongside more philanthropic endeavours. This may be where some block-chain entrants will break through? It may end up being a space for public service provision (NHS, HMRC etc) alongside more open source projects

The tensions of ‘user’s vs advertisers’ have always existed but the market conditions are now ripe for change.

Is it time for the early disrupters to start disrupting themselves

Why I wrote this:

I’ve been pushing at the intersection of user insight / product & service design / technology adoption and market creation for the last 18years. Early on with Nokia as we added imaging / gaming / music / social and business services to mobile, then with Autographer where I led the creation and launch of the World’s First Intelligent Wearable Camera (a consumer device that automatically captured social moments and kept them private), the creation of an AI based private photo and video management box for your home (Pholio - www.pholio.io) and currently with Pimloc where I’m the co-founder and CEO of a start-up that is providing cutting edge deep learning based content intelligence services that still allow businesses to maintain full privacy and ownership of their visual data.

I’ve been tracking the changing attitudes and behaviours of consumer and business markets in relation to data privacy and service provision very closely. I decided to start penning this article to share some more detail on the underlying shifts that are occurring.

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