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If personal data is the “new oil” of tomorrow, it needs to be treated as such. We should start viewing it as a precious resource and develop a new way to incentivize and reward individuals for contributing to the data economy.

Viewing personal data through a larger lens

Recently, John Thornhill wrote an interesting article in the Financial Times on how platforms like Facebook can help establish a universal basic income via data. Here’s the crux of his argument:

“The most valuable asset that Facebook possesses is the data that its users, often unwittingly, hand over for free before they are in effect sold to advertisers. It seems only fair that Facebook makes a bigger social contribution for profiting from this massively valuable, collectively generated resource.“

In 2011 The World Economic Forum classified personal data as a new Asset Class, along with property, investments, cash, etc. This offers a new way to think about data and the value it can give its owners and originators, not just end users. In the original report issued by WEF and Bain, they call out both the technical and philosophical challenge:

“Utilizing a ubiquitous communications infrastructure, the personal data opportunity will emerge in a world where nearly everyone and everything are connected in real time. That will require a highly reliable, secure and available infrastructure at its core and robust innovation at the edge. Most importantly, it will demand a new way of thinking about individuals. Indeed, rethinking the central importance of the individual is fundamental to the transformational nature of this opportunity because that will spur solutions and insights.”

As Thornhill pointed out, today consumers’ data is used without direct reward to the consumer. It’s a barter system: “let us use your data so we can try to sell you more stuff, and in return you get access to these nifty technology platforms.” But why not offer real financial gains for consumers, instead of just value? We need to stop treating data as a free commodity and start paying for it as a precious resource — and we need incentives and rewards to help kick-start this new system.

The pieces of a personal data economy
Fundamentally, people do things because they get something out of it. Game Theory and Behavioral Economics have taught us that a system of incentives and rewards are necessary to engage humans. This system can be boiled down to a few key categories:
  1. Social: Connects us to others for fun and social interactions. Think of all the games on Facebook or online game networks.
  2. Financial: Delivers a direct financial reward such as research incentives, discount or deal networks, personal data lockers or recommendation systems.
  3. Values: Altruism, charitable causes, political or social campaigns and anything else that is aligned to our values.
The ideal system combines all of these. The personal data economy would do well to borrow from the market research industry’s model that utilizes online communities. It would look something like the example below:
  1. A brand wants to engage in a long-term dialogue with a subset of consumers to explore new product ideas.
  2. Participants are identified via profiles established in panels or in social media.
  3. Targeted consumers are recruited and paid a financial reward for engaging.
  4. Exercises are “gamified” and participants are sent on missions, earn badges/rewards and discuss their ideas and the ideas of others in forums within the community. 
  5. Results are shared back so participants can see how their contributions help create new solutions to issues that impact their lives.
Using incentives to spark the change
A system that pays consumers for their participation with real incentives and rewards isn’t only fairer — it also lays the groundwork for a new way of thinking about the personal data economy.

Whether it’s getting a “data access annuity” from Facebook or Google, direct compensation for participating in research or receiving goods and/or services as a “lease” on consumer data access, each model has incentives at their core.

At Virtual Incentives, for example, we use a robust enterprise API system to deliver real time, customized reward options from scores of partners through multiple consumer channels. We’re a combination e-tailer, bank and stock exchange, processing millions of transactions at scale — all driven by consumer demand.

That kind of technology is a vital key component to build the personal data economy, and the thought leaders behind it need to be part of the debate on what the future should look like. Incentives and rewards won’t just be a big part of that dialogue; they’ve already gone so far as to solve many practical issues. Building on these firm foundations, the future of the personal data economy looks bright indeed.

About the Author

Leonard “Lenny” Murphy is a market research expert and founder of Greenbook, an online market research publication, with nearly 20 years of experience in various senior level roles, including CEO of Rockhopper Research, CEO of BrandScan360 and Senior Partner of Gen2 Advisors. A major focus of his work is the advancement of innovation and strategic positioning within the market research industry. He also specializes in utilizing emerging technologies to maximize the potential of insight generation, consumer/brand engagement and marketing ROI. Lenny lives in Atlanta, GA with his beautiful wife, six children and pack of beloved pets.

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