The truism about free online services – Gmail, Facebook, et al (yes, Tumblr too) – is that you are the product, since it doesn’t cost you anything to use them.
But what if you are paying for something? Do you own the data about your behavior, location, etc.? Or does the service provider have the right to create another revenue stream (beyond what you pay them) by selling that data?
Anton Troianovki’s article (paywall) in the WSJ today highlights this issue in the context of phone companies monetizing subscriber data.
The idea, as he writes is this:
When a Verizon Wireless customer navigates to a website on her smartphone today, information about that website, her location and her demographic background may end up as a data point in a product called Precision Market Insights. The product, which Verizon launched in October 2012 after trial runs, offers businesses like malls, stadiums and billboard owners statistics about the activities and backgrounds of cellphone users in particular locations.
A potential use for this:
Clear Channel Holdings Inc., one of the world’s biggest billboard companies, has agreed to conduct a trial of the Precision service, according to Suzanne Grimes, Clear Channel’s North America president. She says the service could allow billboard owners to measure how likely someone driving by is to go to the store being advertised. “You’ve got an industry that was historically about eyeballs,” she says. “Now you know more about who those people are and what their behavior looks like.”
But, as the article goes on to say, there are privacy issues. Similar efforts in Europe have run into problems. And Verizon offers its customers a way to opt out on its website.
Two thoughts on this:
1. I think that Verizon could actually go a step further and offer customers say, a $5 rebate, if they opt into the program. In the age of Foursquare and geo-tagged Facebook posts and Tweets, I would imagine that younger demographics may find this to be very appealing.
2. Yes, this is a new way to monetize subscriber behavior…but how is this different from a magazine’s subscriber list being sold to other publishers targeting the same industry? Since I am not being coerced into buying something, if my behavior and usage data is used to serve me more relevant ads and promotions, isn’t that a good thing?