The Next Economy
What Internet Citizens Should Know About the Personal Data Economy

John C. Havens is founder of the H(app)athon Project, a contributing writer for Mashable, and author of the upcoming book, Hacking Happiness. At Sustainable Brands ’13 last month, he spoke on the main stage about “Unleashing the Personal Data Economy,” and we later dove further into the subject.

What exactly is the personal data economy?

In one sense, the personal data economy has existed for 20-30 years. It refers to data that exists about you right now that in the past you have not been able to access. For instance, with the Affordable Care Act, American doctors are rushing to comply with new mandates with regard to making healthcare data available to patients. This will be more relevant come January 1st because you as a patient will be privy to data, previously inaccessible, about you and your family. It also encompasses the Internet data economy — the business model companies like Facebook and Google utilize where citizens of the Internet might falsely believe the service is “free.” I do not mean to demonize these companies because they provide good services, but we need to move away from systems where data is tracking users without their full understanding of how that data is being used.

Why should people be concerned?

People keep saying they don’t care their data is being shared. I keep telling them they should care. There is a dark side of the data broker industry regarding how consumer information is collected and shared. Right now, the FTC has sanctioned a number of data broker organizations, asking them to permit consumers to see the data they’ve collected about them (this is similar to people asking credit card companies to get a copy of their data). To this day, there are still types of data collected about consumers by brokers they aren’t permitted to see — their own data. This lack of transparency and the overt actions by the FTC to change these practices should be a cause of concern.

Let me give you an example. Imagine you go to your next job interview and they find out about a pre-existing condition like hypertension or stress that became publically available through data brokers. An HR person may discover this information about you because aggregated data about your online actions may include information related to your medical history or health. So the HR person may not hire or even interview you.

Who profits from the personal data economy, a****nd how big of an economy is it in dollar terms?

On the data broker side, it is at least in the billions. Having worked in marketing, the service provided by companies who use publically available data and scrape it to form pictures of certain sets of individuals can be a helpful service. But people should have the right to access data relating to their personal identity. Now there is this concept of data vaulting. I think that’s where things are going, and that’s what I’m encouraging. Largely because I think the data brokerage models have had their day, and I don’t think it will encourage the next wave of innovation in Internet marketing if we keep with this freemium model.

People are used to the fact that Google and Facebook are “free.” Do you think people would be open to paying?

Shane Green, CEO of a data vaulting company called Personal.com, refers to the cavalier nature of this freemium model as Stockholm Syndrome, where hostages begin to forget they are captive and become enamored with their captor. People think they are getting services for free, and then may even be okay with their data being shared, in theory. But a person’s preference to privacy is different from her right to privacy. People may say, “I don’t care. Anything I share, I know I’m sharing, and I don’t care if anyone uses it.” My response is, “I think you do care.” You don’t care if it’s used in a way you understand. If you knew how your data was being sold to a second and third party without your consent or knowledge, then you would care.

What, if anything, will cause people to wake up and care about how their personal data is being used?

What will happen soon is publically available data about a person will essentially be floating above people's heads in a digital format. When augmented reality comes fully online, people will really wake up because you will see someone take a picture of you that is out of context or someone misquotes you and puts a virtual tag on your back. Health will also be a big issue because if you have a chronic disease and go on a date, then the other person might learn you just had a bone marrow transplant and decide they can’t deal with that right now because they see information that’s become publically available you weren’t ready to share. Your health data, your image, work-related data, and where this data is going to be used for commerce — it’s critical to say these are core aspects of your identity in the same way that your social security number is. Start thinking about where you’d share your data in the same context as your social security number. The fact that it may be publically available isn’t the issue — it’s the context of where it’s available and for whom (government agencies, etc).

At the conference, you talked about services such as Personal.com — why do you encourage people to use these?

Personal.com has a tool where you enter your personal information and sign-in — much like Facebook has done where you can sign into online services using Facebook validation — this is similar, but the data is now owned by you. The reason Personal.com is so smart is often you want to share data about you in a finite situation. It’s a one-time transaction of your data, and you allow specific people only in that instance access to your data, only to use it for a specific thing.

What do you think is the message for brand owners and marketers? How can brands start to integrate with the personal data economy and do so in a responsible way?

Having worked with a lot of brands, I deeply sympathize with the question of how to get ahead of data and privacy issues without freaking people out. For some brands, it will be easier to talk about identity issues than others. In the case of a telecom like AT&T or Verizon, it is a value-add conversation to talk to people about data and identity because people want to understand how their communications can remain private. The companies that move forward with this data vault conversation and do it first are going to have a massive opportunity to earn some serious trust with people by showing they would rather have information provided directly from you, as opposed to second- and third-party data brokers where context and circumstances may position you/your identity in a light you don’t feel is an accurate reflection of who you are. Imagine three years from now you record or stream video of your day on Google Glass, and you might choose to filter out certain aspects of your day or certain activities. When you’re running errands during other times, then the movie of your life you’re cool with selling could be open for marketers to insert product placement or conduct research. To a marketer, this is gold. It’s the same model that exists now through surveys — ask a person to relate what they’ve done with their day to see how their actions and behavior would reflect how a brand could improve their lives. But now you pay that person directly for this research versus going through a data broker. They may only get $12 a day or week from one brand via this research, but once they aggregate a number of their favorite brands to study their life they might have part-time revenue. That is where the resources that currently go to data brokers could instead go to individuals who really need it, like college students flooded in debt or people with expensive medical conditions.