J Cromack
May 9, 2023

It’s (finally) time for a data revolution

Consumers want better brand experiences but aren't willing to share their data – a stalemate that presents a serious problem as we move towards a personal data economy.

It’s (finally) time for a data revolution

Data sharing is long overdue a revolution. Especially when it comes to marketing. The lack of transparency on how consumer data is gathered, analysed and shared has caused trust issues. While 71 percent of consumers expect companies to deliver personalised interactions, 73 per cent are worried that the data brands collect will not benefit them, and instead will only be used to help the brand.

The result of these incongruous statistics? A loyalty paradox: consumers want better brand experiences, but aren’t willing to share their personal data. That’s a problem if personalised experiences have become an expectation. These simply aren’t possible without giving brands access to personal data.

This situation doesn’t suit anyone, and there’s only one way to fix it. It all starts with putting consumers back in control at the centre of a new model of data ownership.

A human-centric data model

We are already moving towards a personal data economy. Consumers are increasingly developing a greater understanding of the value their data holds for brands – and will expect to be appropriately compensated in exchange for access to it.

At the same time, very few of us would have the time or inclination to sift through dense and repetitive data access requests, or to manually keep track of which organisations have access to specific information across multiple touchpoints. 

So, businesses and consumers are locked in a stalemate.  

Something has to give. And it seems fair that personal data should remain in the custody of the individual rather than with brands. But if a data revolution is to happen, and thus unlock value for both parties, then that data needs to be decentralised. 

A hub-and-spoke model with consumers at the centre would facilitate data portability, access and reuse. It would even pave the way for individuals to move beyond simply controlling their existing data, allowing them to create their own uses. For example, people could add information about the sports teams they support to their personal data vault to receive tailored experiences from brands based on this. But this shift would need to be underpinned by legislation to ensure compliance. 

The EU Data Governance Act could serve as a useful starting point for creating a level playing field for individuals sharing and pooling data. All relevant stakeholders (both data subjects and data holders) would need to be represented and engaged so that the rules of the sharing game become clearer for everyone. 

How would a decentralised data model work, exactly?

Decentralising data would bring us closer to a true Web 3.0 as envisioned by Sir Tim Berners-Lee. The term has been adopted by bitcoin and blockchain, but that’s not what it truly represents, the father of the World Wide Web would argue. Instead, Web 3.0 should be based on a common web protocol layer that allows an individual to preside over their own database – a bit like a digital ID card.

Everyone would have their own vault that third-party apps could access in an open source way. Applications would be able to read and write to the vault (with the permission of the owner), constantly mining and generating data. This would allow the data to be regularly updated and enriched, increasing the value to individuals and third parties alike.

A net benefit for all

A human-centric data sharing model is not without its challenges. Language standardisation for data dictionaries would be one. Developing a simple, intuitive UI for consumers could be another. But the many benefits it would offer far outweigh these (comparatively) small hurdles.

Importantly, it would allow brands to intervene and offer consumer rewards unprompted and at the right time. For example, say a fitness tracking app logs the number of miles a cyclist has completed since purchasing a bicycle. This data could benefit a bike shop by allowing them to be notified when the bicycle might need a service. The bike shop could then contact the cyclist and offer a discounted deal, which would benefit the consumer.

Data shows that consumers are more habitual than loyal. Rewards such as this encourage and maintain purchase patterns. They remain the most powerful motivator for data sharing, and make the value exchange for consumers explicit rather than implicit.

Data decentralisation would also benefit brands by reducing the costs associated with storing vast quantities of third-party information, as well as the security and compliance risks associated with doing so.

Getting the revolution underway

The stage is already set for a human-centric data revolution, but it will be iterative rather than instantaneous. This means brands that act now to take steps in this progressive direction have the potential to gain a first-mover advantage.

Some of the large supermarket retailers that offer additional services including banking, insurance and mobile networks have already taken steps to integrate data via loyalty cards. Decentralising data could build on this by incorporating information from beyond the immediate house of brands to build a more nuanced customer profile. 

These organisations are already in the perfect position to invite third parties to join this pre-populated pod of information (again with consumer consent) to deliver further value for the individual. For example, integrating a fitness tracker into the equation could allow the supermarket to make healthy product recommendations based on fitness goals, while the fitness app could offer recipe suggestions based on purchased products.

A data revolution would allow us to strengthen digital human rights while opening new opportunities for businesses to develop innovative, personal data-based services built on mutual trust. It won’t happen overnight, but it’s in the interest of brands and individuals alike to make a collaborative effort now.


J Cromack is chief growth officer at Edit

Source:
Performance Marketing World

Related Articles

Just Published

8 hours ago

Amazon CEO Andy Jassy on using AI to win over ...

The e-commerce giant’s CEO revealed fresh insights into the company's future plans on all things consumer behaviour, AI, Amazon Ads and Prime Video.

9 hours ago

James Hawkins steps down as PHD APAC CEO

Hawkins leaves PHD after close to six years leading the agency, and there will be no immediate replacement for him.

10 hours ago

Formula 1 Shanghai: A watershed event for brand ...

With Shanghai native Zhou Guanyu in the race, this could be the kickoff to even more fierce positioning among Chinese brands.

13 hours ago

Whalar Group appoints Neil Waller and James Street ...

EXCLUSIVE: The duo will lead six business pillars and attempt to win more creative, not just creator, briefs with the hire of Christoph Becker as chief creative officer.