BIG DATA
The next phase of the internet revolution will concern Big Data. Coupled with that will be a ‘Big Debate’ about privacy.
Big Data, a Californian gold rush for the internet age, is all about the potential of the vast quantities of data generated online. It is only now that the brainboxes of Silicon Valley are beginning to harvest, store, transfer and analyse in ways that could prove extremely valuable to companies and governments among others.
Silicon Valley is well known for its liberal sprinkling of fledging firms whose business models are built around Big Data. AdParlour, for instance, set up in 2008 by young entrepreneur Hussain Fazal, is designed to build an advertising network for Facebook.
Whereas traditional advertising is transmitted to those who are not remotely interested as well as to prime potential customers, the new generation and streams of ads can be targeted at people based on personal data gleaned from their online activities.
As Fazal says: ‘Almost everywhere you go on the web, you are being tracked.’
The difficulty for companies such as Facebook, which styles itself as a trendy firm in tune with users, is that increasing numbers of people are uncomfortable with having their every online move observed and used for commercial gain.
Last week, the Wall Street Journal ran a prominent article headlined ‘Give Me Back My Online Privacy’, which highlighted findings by the Pew Research Centre suggesting more than half of Americans are concerned about the amount of personal data online. Potentially there is big money in all that minutiae about our lifestyles and shopping habits.
The anecdotal evidence is important to note. The annual value to Facebook of an American woman who is a light user of the site is just over $12. This doesn’t sound a lot until you multiply this by the millions of users and factor in those online advertising techniques – many of which are still in their infancy – and are likely to become more sophisticated and effective over time.
The public mood among Americans about being watched online is more sensitive than it is in the UK following the revelations about the National Security Agency. Many Britons, though, do feel a sense of unease at the snooping of their personal data, and how the information may be exploited.
From the corporate point of view, probing into customer lifestyles and behaviours is not a novelty. Firms have always, and quite legitimately, wanted to know as much as they can about consumers, so they can target their products and prices to best advantage.
Loyalty cards have been tracking people’s purchases and giving stores information on shopping habits for years. Credit scoring for loans and plastic cards, which monitors behaviour in terms of how, when and whether people repay their debts, has also been a feature of the commercial landscape for some time.
At the moment, the use of Big Data to target ads is relatively crude, which is why those spawned by your previous purchases often miss the mark.
At this point in time, however, it is only scratching the surface. Once the so-called ‘internet of things’, where everyday objects are connected to the internet, takes hold, even your fridge will be tracking your habits, making known all about your clandestine food intake. Privacy is not an absolute, but a concept that changes according to time and place.
The internet is redefining some existing social norms: the generation that grew up with the internet and those that come after may be comfortable sharing information their parents and grandparents would have considered wholly personal.
At the moment, it would seem that many users either do not know or do not care that they might be giving away valuable information about themselves online. The online economy has unarguably brought significant consumer benefits.
Shoppers can easily compare prices and obtain the best deals, and can buy goods from anywhere in the world. Users value their experiences on Facebook and Twitter and may feel the surrender of some personal data is a price worth paying.
Set against that is the reality that the details of our day to day lives, hobbies, friendships, work and interests, is being mined by companies as if it were just another commodity.
Yet, it is an exchange in which the terms of the deal are not clear – we have no way of knowing how valuable our personal information might be to companies, and whether the benefits we receive in return are a fair deal.
The debate about privacy and commercial profit will become more pressing as the online world becomes smarter.