Gartner Blog Network


Monetizing “Personal” Big Data – Second stage of Digitalization?

by Peter Sondergaard  |  December 28, 2013  |  19 Comments

Our behavior online, and even offline, as the Internet of Things becomes a reality, generates huge volumes of data. Huge! But whose data is it exactly? You might produce it, but who owns it? Who profits from it? Who currently stands the most to gain from it? I’ll give you a clue — it’s not you!

It’s true that we’ve started to unlock some of the potential value that is contained within big data. It’s also true that we, the consumers, benefit from getting better recommendations, discounts on other products we might like and deals customized to our preferences.

But this is nothing, absolutely nothing, compared to the value of your data to an enterprise today or in the near future.

Right now, in this first wave of what we at Gartner call the new digital industrial economy, we are giving this hugely valuable data away for very little in return. Discounts, offers, recommendations, deals.

But all this could change.

In the second wave of the new digital industrial economy, consumers will shift from being largely ignorant of their data’s value to being highly intelligent, protective and selective about how they collect and manage it.

In this second wave, consumers will be enabled and empowered to own and thereby monetize their own data, effectively wrestling back the control and driving up the value equation for themselves.                                                            

I know this represents a polar shift from where we are today — from companies aggregating and owning data to consumers owning and managing their own data and most importantly monetizing their data. And as is the case in most major changes, the reality will probably lie somewhere in the middle.

Regardless, the impact on the technology industry will be profound. It probably won’t be another Google or Amazon or Microsoft that comes along to challenge established leadership positions. It won’t be a bigger, better, fresher, newer version of these successful companies. Leaders in the new digital industrial economy will most likely be an organization, or even more likely somebody, completely different. When I say somebody, I actually mean us. That’s you and me, multiplied by a couple of billion individuals.  

Consumers will no longer be satisfied with trading their highly complex personal data for simple discounts. They will find ways to wrestle back ownership, and thereby control, of their own data. Their personal big data. They will have software that enables them to monetize their data.

The result? Consumers will have the power to sell, exchange or barter their data in return for products and services of equal worth. With this change, we will see the start of the next wave in the new digital industrial economy; A wave of change that will means everyone becomes a technology company.

We are conducting research into this field today to find answers to some fundamental questions. What or who will act as a catalyst for this change? How will consumers manage their data? How will the market or exchange operate to provide a platform for information to flow between the consumer and the provider? What new opportunities will exist for consumers, brokers, technology providers and industries of all types? And how will this shift impact established industries, providers and consumer behavior?

We look forward to this conversation continuing for some time to come, and I’m interested in your point of view. Do you already see demand for this shift? Do you see early examples of the transition of ownership taking place? Or do you think data will continue to be owned by the enterprise and that the current status-quo is too powerful to be threatened? I look forward to your comments.

Category: 

Peter Sondergaard
Senior Vice President and Global Head of Research
25 years at Gartner
29 years IT Industry

Peter Sondergaard is a senior vice president in Gartner, where he is the global head of Gartner Research. Mr. Sondergaard is responsible for people management and the direction of the global research organization, which includes Semiconductors, IT Infrastructure and Operations, Communications, Software and Services Management, Business of IT, Research Operations Management, and IT provider and end-user organizational roles.


Thoughts on Monetizing “Personal” Big Data – Second stage of Digitalization?


  1. This is a thought-provoking post Peter. Thanks for presenting the idea! I’d be interested to learn more about your theory and why you think this shift will come. It seems to me that we have very little value for our private information and, therefore, have already set the bar extremely low. We’ve already established that our data is worth access to an app that most will only use once, or the convenience of “relevant” search results. Most of the juicy PII bits have been captured and not necessarily managed well by various enterprises and government agencies. This leaves the ongoing data generated by our actions and interests. While there’s value to this data, by what units will it be measured (keeping in mind our dismal record of applying consistent measurement standards across media)? If the information is already out there and relatively accessible, how are we to pull it back in and throttle access based on some new (negotiated?) value? I’m only two cups of coffee in this morning, so I’m sure I’m missing something obvious, but what examples do we have where a previously undervalued commodity is successfully corralled, repackaged and marketed by the masses? Best wishes for the new year!

  2. Hi Peter,

    Great blog to get 2014 underway with, I’ve done some work looking at this from a telecommuncations vertical viewpoint and documented much of this on garethpricejones1.wordpress.com, probably the post that caused the most discussion in this series was the stages of evolution, which are all a part of the shifting use of personal data from exploitative to the control shift you talk about of personal clouds and personal information management services.

    I documented this in 6 stages, would value your input and please feel free to use the content as part of your work if you feel it appropriate.

    http://garethpricejones1.wordpress.com/2013/12/09/stages-of-maturity-of-the-personal-data-market-for-telco-players/

    Gareth

  3. madhuban kumar says:

    So, I agree with this. I there will be those who act as guardians for protecting data. We will see a new type of B2B2C company come into play instead of individuals monetising there data directly.

  4. Madhuban, I tend to agree with your view on the monetization angle, I doubt it will be at the individual level, but it will hopefully be more about empowerment of the individual to drive the data transaction.

  5. Nadav says:

    Peter, I am not sure how this is different then the traditional pre-internet world when consumers own their own data?

  6. Mukul Chopra says:

    This is a provocative piece, we expect nothing less from Peter. If I were to play devil’s advocate for a minute, we have had personal data (particularly in terms of how we shop and the brand choices we make) for a long time. Yet as individuals, we have little control over it and other than the occasional coupons -monetizing this in a significant way has not been successful. Today, Amazon has very good information on what I buy online from them, yet I have not been able to get them to provide any special goods/services to me as a result of that – other than the “recommendations” to buy more. Thoughts?

    • Peter Sondergaard says:

      The second era of the digital industrial economy will lead to consumers more directly involved in the monetary flow of their personal big data. So a world beyond coupons. This will require the new software environments, and consumers moving away from existing environments. However, the latter digital consumers have shown they do willingly very often.

  7. David Cowan says:

    Jaron Lanier is also a thought leader on this subject. I recommend his book “Who Owns the Future.” His basic premise regarding personal data and privacy: monetizing personal information would put people in control of their own data, enabling them to choose their own level of privacy; meanwhile data would become too expensive for businesses and governments to hoard and mine indiscriminately.

  8. Arush says:

    Hi Peter,

    A great blog to start the year with.

    The Idea of second wave is very interesting. As the data growth is enormous it will be an interesting thing to speculate the consumer control over the data.

    I think it will vary as per the Industry too. for some sectors it can be applicable but for some it will be on the high level note. E Commerce will be the biggest benefactor seems like.

    Slowly big data is changing the operational patterns in multiple dimensions, both towards the revenue and cost side of the business.

    Wish you a Happy new year!

  9. Peter,

    Great post and very thought provoking. What really pique my imagination was the notion of big data moving past discounts and such.

    it really begs the question: “what is post consumer big data”. I’m not thinking about selling my personal big data for things of equal value, (which certainly will happen as you point out). I’m wondering if there is a scenario in the personal space analogous to examples as SKF or GE where the big data transforms traditional products into services.

    There is a personal business moment there if we look hard enough, as all jobs become “information / knowledge worker jobs” even the information that the guy at the Home Depot has about what pipe fittings will work for my weekend project becomes monetize-able.

    Leigh.

    • Peter Sondergaard says:

      Leigh,

      Your comment around “personal business moments” is very interesting. We are looking at moments where we can monetize our personal big data. In this first era of digitalization large organizations are doing so, on our behalf or often instead of us. In the second era of digitalization we, as digital consumers, will be more directly involved in that monetization. Personal business moments will happen all the time in the second generation of the digital industrial economy.

      Peter

  10. mass markets of one, while not entirely a new concept (see HBR circa 2000), the evolution of digital marketing is unleashing infinite possibilities for aggregating and constructing entirely unique perspectives that will generate individual markets and personal ownership of the collections of information that tell a uniquely personal story.

    will I have exclusive access to my personal medical history – almost certainly no, I will not. And I will also not have unique access to my financial and purchasing history. But I might have unique and exclusive access to my personal fitness history generated on a combination of wearable and implanted electronics and connected devices in my car, home and office. I will have the ability to pull together all of this data so it is meaningful to me, and can be utilised by me to construct a unique personal profile.

    how would I use this and benefit from it?

    health programs tailored to my unique personal situation. My implanted diabetes monitor, connected to my smart-phone, collecting information from my exercise monitor will connect to the grocery store to recommend purchases suitable to my own needs. These purchases might be offered to me in a combination of offerings which is advantageous to me exclusively, and different to the offering that you might receive.

    an analysis of my personal financial situation, my purchasing habits, and perhaps even health records, will provide me with “shopping” options for new financial products. Financial Institutions will publish their financial offerings, including terms and conditions using a defined format (perhaps a readable XML format) that I could access and assess at my pleasure when and where I am interested. I would be able to assess the offerings which match my own personal needs – or better yet, I could construct a financial profile and publish that as a “reverse tender” seeking proposals from financial institutions interested in my business – from anywhere in the world.

    I would be in a position to create arbitrage between financial products – borrowing money in Japan at 0% interest, and investing it in Russia at 10%.

    buying shoes designed in France for my wife, having them printed at the local Kinko’s and paying for the purchase using bitcoins from my account in Iceland.

    the availability of, and access to information, has already changed the power relationship in purchasing consumer products such as cars, clothes, computers, washing machines, etcetera. And it will change the power relationship in an individuals relationship with financial institutions and ultimately governments.

    as products become bits and not atoms, the ability for governments and corporations to control distribution becomes weaker and the power in the relationship between consumer and provider shifts in favour of the individual which has greater access to more information.

    at the moment that information availability is tilting towards the individual, ensuring that it continues to strengthen the individual will be critical to a digitally empowered future

  11. Anna says:

    Lecture really interesting, I think that we are already in the middle of this first wave, because people agree all the conditions that google, FB, instagram, etc, impose you in order to install the apps o a new release. If you really read it, you realize that they are asking for accessing all of your “private” information (contacts, emails, locations, etcetera), and with every new release, there are more and more new requests.

  12. Evan Quinn says:

    An exciting idea, but based on an assumption of active, conscious participation by individuals which is the fly in the ointment. All the trends point to the opposite. People aren’t looking for more complexity, but rather more simplicity, we are already overwhelmed. Therefore, in order for individuals to take ownership of their data, and benefit from that ownership, there will need to be an app for that. Somebody will come along and build something like a reversed version Experian plus Google Ads for consumers, and it will start to interact with NFC-style systems to create new personalized digital commerce/experience models. Or something like that ;> And perhaps that will shift the equation of control back towards consumers. Until then, however, when no blocker can prevent the popping of digital ads regardless of device, we will continue to be at the mercy of the Googles and the woefully unsophisticated credit bureaus.

    • Peter Sondergaard says:

      Evan, you are absolutely right in your assertion that there needs to be an app, or software ecosystem that assists the digital consumer. That does not exist today. But that merely represent an opportunity for new software developers.

  13. Erwin Verstraelen says:

    After reading Jaron Laniers book ‘who owns the future’ I’m a big supporter for this line of research. In a post digital world where also robots and smart machines are on the rise, the monetary value of providing ones personal manual labor or brain capacity is eroding at an exponential rate. So, what can be replaced by what if we still want to maintain some of the features of our present economic model (if that is what we want but I don’t see much willigness to envision something else). Inspiration, opinions and ideas still have value, for sure in the social context where the might influence the (buying) behavior of others. The owner of that trigger is entitled for a financial reward, not just a set of siren servers that aggregate all the data and filter insights out of it. The entire concept is very illusive but my gut tells me that it’s fairly important to elaborate

  14. Ian Rowlands says:

    Peter, thank you for highlighting one aspect of a key issue. Two things used to be true about personal data that are no longer true in an increasingly digital world. We could trust people to respect our privacy, and it would be hard to exploit personal data for commercial purposes. Both propositions have been eroded and we are now at a tipping point, and we now have to consider how to take ownership of our own information. This must be one of the drivers for the emergence of services offered by those such as reputation.com … I, for one, now have a default expectation that nothing is private unless I take action to make it so. As to monetizing my personal information — I’m hoping that creative forms of inter mediation arise. I like, for instance, the idea of being able to subscribe to a service that would curate, aggregate and market my personal information …

  15. Hi Peter,

    I agree with the other commenters – this is a thought provoking post. My company, Kachingle, has an idea on how to implement a system where customers can easily take ownership of the ads that they are served, and be compensated for doing so. Are you available for a short chat? We would appreciate your input. Thanks.

    Cynthia Typaldos
    @kachingle @typaldos



Comments are closed

Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes, with attribution to Gartner. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.