mercredi 10 avril 2013

Data: the price of our opinion

Let's start with three propositions:
  • There is an abundant supply of opinions : everyone can produce an opinion about anything, on any topic, at any time (change opinions). An opinion is the product of interrogation; it can also be expressed and observed through behavior:  a program watched (TV meters), consumer paths in a store, the location of a smartphone user, social graph, etc.
  • There is a growing demand for opinions from marketing research institutes and polling companies (advertisers).
  • There is therefore a marketplace for opinions.
Here is a look at the evolution in the various business models.

Business model 1 (M1)
At the beginning, people were willing to give their opinion for free. It was fun; there was a flattering illusion of importance. The business model was simple: a company collected opinions (polling, etc.), processed the data and sold the results as "public opinion". They did not buy opinions: people gave their opinions and were happy - if not proud-  to do so. Free labor was there for the taking. A bit like crowd sourcing.
To motivate and encourage people, esp. those taking part in a long time panel, the companies compensated (incentivised) panelists for their participation with a small a gift, a little money. Something symbolic.
But people are now less and less likely to give their opinion for free. There are too many phone surveys. They do not want to waste their time. Some do not even answer a land line anymore. They do not want to answer surveys on a mobile phone. They do not agree to answer long surveys (some might require more than 7 hours)... Consequently, marketers have to pay more, give better gifts: the average price of an opinion is increasing. Unless surveys are very quick and not intrusive at all.

Business model 2 (M2)
It is bartering, but stealth bartering; a service is first offered : the exchange starts once the service is used. The exchange is rarely explicit, so most people have the impression of using something for free whereas, in fact, data is taken without the user's knowledge.
Companies build services first (webmail, maps, apps for productivity, translation, directories, catalogs, games, weather, search engine, etc.). They offer these services in exchange for data. Do ut des. I give (you) so that you will give to me ("Gib, dann wird Dir gegeben"). This old maxim from Roman law could be the motto for the digital advertising economy. Data is collected smoothly while people use the service. Users pay for the service with their opinion. The research company builds knowledge with the collected data (raw material) and sells it once aggregated and processed.
Consumers become sensitive to privacy.
All the illustrations here are taken from e-mails received since December 2012 from Panel Institut.
Some even wonder now if it wouldn't be safer to pay cash for these services than to be "robbed" of their data / privacy., an ad-free social network, says: "We are selling our product, NOT our users".
Business model 3 (M3)
People sell their opinion. It is a clear and obvious transaction. This is the ultimate step.
See above and below a recent example from a French company. People are asked to turn their time - i.e. their opinion - into money ("Je convertis mon temps en argent").

"Votre opinion rémunérée" = "we pay for your opinion"
"Your opinion is worth money" ("votre opinion [est] rémunérée"). Answering surveys has become a job.
See also:
HitBliss: people watch commercials to collect points that allow them to rent movies
Panel App: collects location data and, in exchange, provides points redeemable for different incentives, including entry in a monthly sweepstakes.

This third business model is different from the free labor model as described by Pierre Collin and Nicolas Colin in their report on digital economy and taxes ("Mission d'expertise sur la fiscalité de l'économie numérique", January 2013, p. 2.).

  • Surveys in which people are asked to give their data for money could help determine the market price of any collected data.
  • Conscious of the market value (price) of their opinion, people might sell their own opinions, auction them and thereby "kill" the first business model. There could be opinion exchange platforms with RTB, etc. 
  • The competition in marketing research opposes two major categories of companies, i.e. two kinds of business models: the first with traditional marketing research firms (M1) and the second (M2) with Web companies (social networks, search, geography, mobile, etc.). The third category (M3 is only nascent)
  • The value of an opinion diminishes with time. Opinions change quickly and often. Who wants yesterday's opinion? What is the expiration date?
  • Who owns our opinion? It sounds like a Faustian question! Can we sell our soul? 

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