We’ve been giving tech giants free rein over our data for far too long. It is genius on their part. They’ve created services that are so ubiquitous that we now use them without even really thinking about the consequences and trade-offs. Companies like Facebook and Google have done such fine jobs creating online experiences that people rely on them for all their digital needs.
All the while though they are actually building profiles about each one of us to feed into their advertising engines and make billions of dollars in the process. Big Brother is certainly watching you and I’m not talking about the TV reality game show syndicated internationally.
Just visit your Google Ads settings page and you would see how well Google has nailed your profile down is. Facebook also has something similar. Even Amazon has been carefully taking note of all your product views and purchases that the recommendations one sees can be pretty spot on.
Now if you have been using these services sufficiently enough, the results can be pretty downright creepy. And, given that some of these companies have recently expanded their omnichannel presences, there is little doubt that they will continue using these profiles - even for brick-and-mortar marketing.
It’s only recently that the campaign to reclaim control over personal data and promote privacy has gained significant traction. There are a couple of popular positions in relation to this.
One advises preventing these “centralized authorities” from getting data in the first place. Privacy browsers such as DuckDuckGo are gaining users year-on-year as increasing numbers of people have become more conscious about privacy.
Another position aims to control how user data gets monetized. Some are quite comfortable with sharing their data as long as they are compensated for it.
Blockchain can be an influential technology given either position. It - Distributed Ledger Technology (DLT) - can provide both data security through encryption and the means to monetize data through smart contracts and cryptocurrencies.
Several blockchain projects are leveraging these capabilities to give users better utility of their data. Decentralized data marketplaces like Wibson empower data owners to securely monetize their information.
Elsewhere, Shping allows shoppers to be engaged directly by businesses rather than through profile-based ads displayed by intermediaries. BitClave is also building a new search engine that allows users to be incentivized when participating in search advertising.
If successful, such services could have the potential to challenge these tech giants’ continued dominance. But it won’t be without challenges along the way.
My Data, My Money
One of the biggest criticisms against centralization stems from the way big tech companies profit from their users’ data. Being able to use services like search, email or social networks without having to pay for them appears to be a fair trade.
However, once you consider how much money these companies are making from your data, you may have to take pause and reconsider.
Google’s advertising business, for instance, which relies heavily on user data to be effective continues to be the company’s key moneymaker. Facebook’s market capitalization of over $500 billion also shows how much value is placed upon owning people’s personal and social information.
Indeed, Facebook generated nearly $27 billion in revenue in 2016 via its advertising products, which is equivalent to around $20 per monthly active user (MAU) per year. And, it has been broadly estimated that an average U.S. consumer can make $240 per year monetizing their data for digital advertising.
Blockchain may soon test this. When it comes to privacy, the technology provides users means to encrypt and secure their data and even choose who gets to access their information. Blockchain-driven data marketplaces also create a means for data owners to sell their data to whom they choose and to provide data access to more parties.
“Consumers don’t want to replace Google and Facebook with a new, even more powerful data broker. They want to be in control. They want to understand how their personal data is used and participate in the value it generates,” shared Mat Tavizano, CEO of Wibson, a blockchain-based decentralized marketplace that seeks to empower individuals to monetize their data.
He added: “The beauty of the blockchain is its ability to let the consumer control how, where and when their personal data is used, supporting a whole decentralized consumer data marketplace.”
Wibson provides a decentralized means for data owners to share and earn from their data. Through the platform, users will be able to securely and anonymously sell their information. Blockchain helps facilitate transactions ensuring that buyers and sellers receive what they are due.
A decentralized approach also favors individual data owners by creating a fair market for their data. No single entity can readily set the prices in the marketplace. Wibson also offers validation mechanisms that makes sure buyers get reliable data.
For its part, BitClave is able to add this monetization dimension to its decentralized search. Like Google, the service logs user information and builds profiles and buying personas. However, unlike Google, users are given full control over their data including having the choice on how to monetize it.
Alex Bessonov, Founder and CEO of Bitclave, commenting said: “Traditional search systems are collecting data about users, about their preferences and interests. This personal data then is used for targeted advertisements. Businesses have to pay fortunes to the owners of the personal data in order to reach their target audience.”
He added: “BitClave allows users to share some of their personal information and businesses can respond with targeted offers that are based on the personal information that user provided. Business in turn will decide how valuable is the user to them and will decide what offer they are going to extend and how much they are going to pay to the user for the fact that they are was using user’s personal data.”
Cutting Out the Middlemen
Today, marketers and advertisers compete for their products to be associated with keywords that you may use when searching for products or services. What this creates is a system where the most visible product or brand is not necessarily the most relevant to you. Rather, it’s the one that paid companies like Google or Facebook the most.
This affects both consumers and businesses. For consumers, they are often bombarded with ads of products and services that they may not really care about. For businesses, they are pressured in entering a spending war just to be visible.
“Today’s digital advertising model short-changes the consumer whose data and attention has become a hot commodity for media giants to literally on-sell to the highest bidder. This has created a scenario where hyper-targeted advertising almost feels invasive,” remarked Gennady Volchek, CEO of Shping.
He added: “You might, for instance, update your status on social media, and all of a sudden, you’ll be seeing ads for products and services that the algorithm thinks you want at a volume and intensity that feels mechanized and unsettling.”
A blockchain-based platform like Shping allows for more direct connections between retailers and consumers. The firm touts that it aims to build a Global Product Database. And, using this database, the platform enables users to see product information that are most relevant to their needs.
All consumers need to do is scan a product’s barcode and they will be able to receive pertinent information such as quality reviews, authenticity and warranties. While the platform does track information for the purposes of analytics, consumers are rewarded with crypto tokens for their use of the platform.
BitClave also provides mechanisms for users to deal with advertisers and advertisers directly using smart contracts. The platform uses its own tokens to compensate users for sharing their data and for performing relevant searches that are linked directly to advertiser’s goods.
These tokens can also be used to purchase goods and services from participating merchants. Advertisers and retailers can then directly reap the benefits of their campaigns, rather than having to deal with third-party ad networks as intermediaries.
Brands then get a new choice on where to invest their marketing and advertising budgets. They can shift to using a more direct form of engagement that platforms like BitClave and Shping offer, instead of continuing to rely on intermediaries like ad and social networks.
Rewarding Economy
These blockchain-based platforms poke at the dominance these large tech companies like the 'FANGS' (Facebook, Amazon, Apple, Google, etc.) have over the means to make money from user data.
But if users realize that there are ways for them to earn and be rewarded, then they are likely to become more discerning in how they manage and share their data. And, the more restrictive users become with their regard to their personal and behavioral information, the less fuel these tech behemoths would have for their income generating mechanisms.
While it may still be a stretch to say that this will soon spell the demise of these large companies, a shift in user attitudes towards favoring these new blockchain-based services may be what is needed to shake up the market. For some users, knowing that they now have means to take control of their data would already be a welcome development. The success of these efforts may actually usher in a new data revolution. Carpe noctem.