Explainer: The Consumer Data Ecosystem

What It Is: The consumer data ecosystem is a concept which encompasses everything from personal data stores– online data warehouses where consumers aggregate, tag and store their own data– to “data wallets” which serve as granular-level trading desks for consumers hawking their  personal information such as shopping behaviors and brand preferences to brands, marketers and data mining companies. The concept, and the companies trying to bring commercial solutions to market, are relatively new, most launching within the past year.
How It Works: The method of these solutions vary, and many are still in the alpha stage, but most allow consumers to view and collect their own data from sites that share tracking information with the consumers that they track. This information is then pulled, either manually or via feed, to a personal data reservoir where it can ostensibly be monetized by the consumer in sale or trade or simply stored as a record of spending and web usage behavior. The idea of consumers tracking their own behavior is as old as bank statements, but the idea of consumers collecting their digital footprints from across the web is a new one that a handful of companies are betting will forge a new asset class.
Who Is Using It: Early adopters are few, but the start-ups are many. The movement has some leading Silicon Valley figures involved, such as Mary Hodder, who believes that consumer privacy may be the spark for a new, global data marketplace. Companies in this space provide tools to consumers for analyzing how they are tracked, provide data storage solutions and allow users to make their data ownership portable, making personal data tracking impossible on multiple devices. Some start-up consumer data ecosystem facilitators are; Singly, Azigo, Statz and Personal.com.
Why It Matters: Consumers handling their own data could be good, or bad for marketers, depending on how the industry reacts, and if the concept takes off. Companies that develop and successfully market tools which entice consumers to opt-in to new data-use structures with tangible rewards may do extremely well in the latter case. Brands and agencies that are dependent for revenue or data-flows on most users allowing themselves to be tracked are missing the big picture. Even a handful of companies with a user-friendly tools that offer Groupon-like value to consumers to pool their personal data “off-the-grid” should be considered disruptive enough to the industry to warrant an overhaul of existing targeting strategy.
Assessment: Consumer data experts and privacy advocates believe that the consumer data ecosystem is several years away. “This is not an over night process,” said Mary Hodder. Users won’t necessarily opt-out in droves, or at all, right away. The possibility that they might at some point, and the uncertainty of what start-ups and developers may dream up to make consumers see their data as a personal asset will define the shape of the behavioral targeting industry in the coming years. At present marketers need to build better strategies that are inclusive of the possibility of consumer resistance to being monitored, not more sophisticated tracking which may in the end, court the more restrictive legislation that some marketers fear.
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