Why Data Collection Is the Perfect Area for Entrepreneurial Intervention Consumers are becoming aware that their data is worth every penny.
By Henny Yeshanew •
Opinions expressed by Entrepreneur contributors are their own.
For the past ten-plus years, consumers have sat idle and allowed platforms to farm their data and generate billions of dollars in revenue. Now, let's not try to put all the blame on them; it was us who signed their terms of service and accepted the reality that all our information will one day be sold to whoever comes knocking.
For the past five years, as a marketer, I was one of those individuals who came knocking and used your data to better serve my clients in generating revenue. We thrived on using your data to help our clients grow as a marketing agency. We were able to use your data in hopes that you will spend your hard-earned money on products and services.
Before the scandals and new privacy laws, harvesting data was the main priority for social media platforms. Now, harvesting data is not all bad; they can serve you targeted advertisements that cater to your needs and wants. In reality, it became the new way you would watch commercials when they were on TV. However, with TV commercials, they spoke to a broad audience regardless of whether you were interested in the product or not.
Breaking it down further
When we spend hours scrolling on Facebook, Instagram and TikTok, the algorithms start to learn about the content that keeps you glued to their platform. TikTok is an excellent example of this, from the UI layout (that makes it full screen and removes your status bar) to short viral videos to keep you wanting more as you swipe up. It could be said the same with Instagram with their move from chronological order to content catered to your preferences.
These algorithms can create an avatar bio of you, which can include everything from your age, gender, location, education, occupation, previous purchases, links you visited on your phone and apps you have used. With this avatar bio, the platforms can start aggregating you into specific groups or audiences in hopes that advertisers will use it within their campaigns.
There is a reason why marketers could help their clients generate ten times their returns in the early days of Facebook advertising due to the invasive data collections on consumers. In 2022, that has changed drastically. It has become more challenging for the platforms to collect the same data type they used to before.
Putting a price on your data
What price would you put on your data for these platforms? Look back at all the purchases you made due to an ad you saw. Many of you would say you spend thousands of dollars. Were those purchases justified?
Putting a precise value on your data can be complicated because there is no primary metric to rely on. And if there was, would it be like a stock market method where one day the value will increase and another day will plummet due to your lack of content consumption?
This will be the dilemma in the coming years as web3 makes a presence in our daily lives. As for now, there is still an opportunity for you to be compensated for your data.
When there is a dilemma, leave it to an entrepreneur to make it into an opportunity and find solutions. If the platforms won't reward you for sharing your data with them, it is a shame, but that does not mean you stand idle and accept it as the norm.
Related: The How-To: Protect Your Business From A Data Breach
Final thoughts
I anticipate that more and more companies will start to roll out a reward system to entice consumers to share their data in the coming years. As for now, these companies seem to be solving a more significant issue than the respective social media platforms have done in the past. As for the consumer, educating yourself on where and how your data is being used is crucial and having that control of sharing it or not is even more critical.
Related: Marketers, Turn Your Data Literacy into a Data Superpower
