Big Firms Lose Control of Your Data
Companies are spending millions of dollars to gather data that identifies you and your online behaviors, analyzes your behaviors, reports on them, and even predicts your future behaviors. Salesforce.com even spent $326 Million dollars to buy social media monitoring platform Radian6 in order to help firms listen for opportunities to sell you something and then try to engage you to extend offers that they believe may be relevant to you. Here's the problem, start-ups like DataBanker and Personal aim to turn this market on its head.
Let's take a quick look at how things are done now: Social media monitoring/ listening platforms mine the entire internet as well as their clients' private data in order to build a profile of potential consumers; i.e. You. Anything that you share publicly on Twitter, LinkedIn, Facebook, company Facebook pages, internet comment boards, etc. gets tagged with metadata, and then that data is analyzed to understand how you feel about products, companies, events, or anything that you can think of. That same data can be linked to account profiles that you voluntarily filled out when making a purchase. If firms do not have information about you that you volunteered to fill out (called self-identified information), then some firms are even able to use sophisticated algorithms that cross analyze your data trail (think liking or following) to try to identify you without you volunteering. Again, all this effort is expended so that they can better understand your behaviors and ultimately so that they can identify opportunities to sell you something.
A major inefficiency with that herculean effort to create a profile of you and sell you something is that much of that effort goes to waste. You may ignore the flashy banner ads that all of a sudden are eerily relevant to your recent online discussions or not open the email from a firm that believes that you are excited about the new widget that they are selling. Personal.com even cites a study by the Direct Marketing Association claiming that "over 97% of online advertising fails to reach the right person at the right time".
The disruption that is coming to this market affecting online marketers and social CRM firms alike is that firms like DataBanker and Personal aim to place you back in control of your data. What's more valuable to a firm looking to sell you something; the hope that you'll click on an ad that they cleverly placed or having you share your needs with them and getting the opportunity to directly engage with you regarding those needs?
How does it work? Let's say that you are planning to go to Paris. You log-in to your secure account, fill out some profile information as to where you want to go, the types of activities you enjoy, the types of products and services you'll need while you're there, and style of lodging that you prefer. The data-broker then shares the applicable information to vendors who can fulfill those needs, and they send you targeted competitive offers that actual fit your exact needs. From an investment standpoint, this marketing effort is more valuable because you are already in an emotional state to buy these products, and vendors know that their offer will make it to you.
Do you think that this is a stretch? This is not a foreign idea; LendingTree built a highly successful business brokering your mortgage needs to lenders. Why wouldn't this model work for your other needs? Need more of an incentive? Some of these data exchanges will pay you a percentage of the revenues that they gain from brokering your data. Would you rather be served with ads and offers in which you are not interested, or would you like to get paid to receive offers that do fit your needs?