Privacy is a Red Herring, Personal Data A Goldmine for Consumers and Marketers

The social graph. Data portability. Privacy. Data control. Peerset CTO and Co-founder Amit Kanigsberg has a few things to share on these topics in this second post in a series on the use of personal data.

Fish Anyone?

All of this hype surrounding online privacy is a red herring, especially as it regards Facebook. We learned this week that privacy is not the central concern for Facebook users. The "Quit Facebook Day" protest groups have barely gained membership. Quitfacebookday.com only managed to attract 35,000 members for their mass exodus yesterday. Next to Facebook's close to half a billion users, this just doesn't seem very significant (a good article considering this perspective).

If we were to believe the hype, we might conclude that privacy concerns are causing a universal disrupt in user experience. In reality, the average user doesn't seem to care or even think about their Facebook profile's privacy. And I think that the majority of social networkers likely share this sentiment.

It doesn't take too much investigation across a swath of users' profiles, wall posts and status updates to convince us that there isn't much that people are concerned about protecting.
So why sound the alarm? Is it an attempt to divert our attention from something of real value? Well, that gets into conspiracy theories, which, despite my fondness for I'll avoid and instead pose the question privacy pundits should be asking - why should people care about privacy? Which leads to the broader and more important question - why should people care about their data?

The value of data for users and advertisers

I believe a user reaction stemming from an increased awareness of their data is inevitable. Privacy may represent a gateway for some but will not be the impetus for this reaction. Once the average user, broadcasting their interest in Machine Head and gherkin-based appetizers, realizes that advertisers actually value their data, the advertising industry is in trouble. This user will demand a cut, with a "what's in it for me" attitude - and rightly so. Now, the industry will have to provide more than transparency, clear privacy policies and opt-in/out functionality. And they will be in trouble because there really aren't any clear pathways for them to satisfy this new and pressing requirement.

But I won't put it all on the shoulders of the advertising industry. I wrote in my last posting that people should be informed players in the publisher, consumer, and advertiser mix. They should stop pretending that advertising is pointless and just an annoyance and embrace the role that it plays in simplifying their personalized online experience and quality of life. The user must meet the advertisers and publishers halfway.

At this juncture, a user will be in the driver seat, and, with the right technologies in place, be able to centralize and divvy up all of their data (behavioral and UGC), balancing their privacy preferences against reward. So, by managing the degree and nature of the data they provide to advertisers, they can determine to what degree they will be inundated with crap ads where the more and better data they provide, the fewer and more relevant ads they will see. And, if they don't want any ads, they should be able to pay for the privilege. It will become a useful and meaningful way to reach users based on their true preference--privacy included.

The tools and frameworks necessary to bring all this together are beginning to emerge and are largely part of the decentralized social networking proposed by a number of groups. Key to the user data piece will be personal storage people can use to maintain their data and apps that they can use for its creation and sharing. Because this capacity will come with the convergence of a number of currently developing elements, it will be most interesting to watch its initial formation and subsequent evolution.

Early services pioneering this model will have to find that ineffable value-add and solve for more challenging socio-economic challenges such as arresting data from the current custodians, establishing mutual trust between advertisers and users and finding adequate rewards for users to engage. I don't believe that pushing privacy is the way. People won't choose a path by being told what to do, they must find their way through experiences that prove there is value.

Amit Kanisberg is CTO and Co-founder at Peerset.