My Response to “Putting a Price on Data” by Ian Hitt

Here is my rapidly put together (and therefore apologies for it not necessarily being totally thought through) response to Ian Hitt’s post over on Reputation Online about “Putting a Price on Data.”

Many marketing professionals think that client data is something they own, have a right to or an ability to sell. Most data professionals will know they’re wrong.  Good data is indeed a corporate “asset” and if utilised appropriately have a high monetary value but…

The thing about client data is that most people in the marketing profession just don’t really understand “data” – sure they can get all righteous about lifeblood, insight and segmentation but actually data itself is not that simple; data is not a database.

Let’s break it “client data” down and see if we can’t get some clarity.

“Client” who’s client?

cli·ent  n.

1. The party for which professional services are rendered, as by an attorney.

2. A customer or patron: clients of the hotel.

3. A person using the services of a social services agency.

4. One that depends on the protection of another.

So from a marketing database perspective there are two clients; the first being the paying customer of the agency (ala point 1) and arguably the data subject, the end user about which data is collected (ala point 4).

It doesn’t take a rocket scientist (or a data professional) to work out that actually when marketing companies talk about a “client database” what they are actually referring to is the later; a database of stuff about any number of individual people, often collected overtime under various pretences and situations.

In this context the client (albeit often unwittingly) is an individual for whom they rely upon the protection of data about them by the database “owner” – or data controller.

“Data” who’s data?

da·ta  pl.n. (used with a sing. or pl. verb)

1. Factual information, especially information organised for analysis or used to reason or make decisions.

2. Computer Science Numerical or other information represented in a form suitable for processing by computer.

3. Values derived from scientific experiments.

4. Plural of datum.

The key part here is point 1; data is factual information organised for analysis or decision making and is surely the cornerstone of marketing?

And so to my thoughts on Ian’s post.

A business does not “optimise the value of its database” it seeks to gain value from the quality of the analysis of the data held within that database.

Looking at a couple of Ian’s individual points;

“Volume is important but data quality is paramount. Every record has a value and the whole list needs to be viewed as part of the corporate asset.”

Quality of data is indeed paramount but the very traditional process of acquiring, storing and analysing personal data undertaken by the marketing industry is counter-productive to achieving high levels of data quality.   Why?  As an example think of some of the simplest personal data held by marketing databases; contact information.  My email address, telephone number, even my physical address are not concrete – they change in time.  It doesn’t matter how rigid one’s checking for a valid postcode or email address may be when gathering personal data is, if the data you are gathering naturally decays then you’ve failed.

Several marketing insight groups are starting to see the light here.  Why pay to acquire and store stuff that is by its very nature junk.  Far better to ask for the information as and when needed, never to store it (for anything more than easing end-user experience) and to just accept that 100% cleansed data is a myth – it can’t be done.

As for being a “corporate asset” well not really.  Firstly as with the example above, it is patently a liability to pay cold hard cash to gather, store, analyse upon and market to data that is incorrect.  Secondly a corporate doesn’t “own” the data per se.  I won’t get in to the philosophical arguments over whether data is in fact even “ownable” here but the asset lies not in the data but rather the relationship with the data subject and their willingness to maintain that relationship.

“Customer relevance is key, and marketers need to understand consumers in order to appropriately segment them and track their behaviour over time, so that they receive market information which is relevant to them.”

There is, in my opinion, value in trying to understand consumers over time – especially where the level of financial risk (normally through long product lead-times) is high.  However this is becoming harder and harder to do.  Aside from regulatory restriction the simple fact is that consumers are spreading their attention more thinly across an ever increasing number of online and offline properties.  To capture a picture of that consumer through any single database is likely to become less and less accurate.

Loyalty schemes are a good example of this failing.  Not your local coffee shop and their paper based card but the big ones, the Nectar cards of the industry.  To the consumer they offer a perception of value exchange based on their loyalty to certain brands, in reality they are price discriminators trying to force consumer choice into any single outlet within a vertical market – that’s why you only ever get a single supermarket, garage chain or clothing outlet per scheme.

But the reality of life is that average consumers don’t just use a single supermarket.  Take me for example.  I use our local Co-Op on a day to day basis, but they don’t sell a particular brand of cereal that #1 son likes, so we do a weekly shop in Waitrose or Sainsbury.  Of course if we are over the river in Thurrock we might pop in to the Tesco superstore or if at Bluewater we might hit up the local ASDA.  We are kind of loyal to Co-Op but situation matters.

So our share-of-wallet spending in Sainsbury (on the Nectar scheme) is not actually representative of our food spend.

And the same goes for any insight gathering activity.

The “simple” answer actually lies in flipping the model to where the consumer requests stuff from the marketing agency.  It’s a wonderful utopian idea, but one which I’m sufficiently pragmatic to accept is unlikely – at least anytime soon.

For me the mid-term solution lays in a third party providing aggregation for consumer behaviour at the bequest and under the control of the data subject, the consumer themselves.

This intermediary, a broker, would offer a service where the consumer can easily record, augment and share their data with businesses they want to.

This doesn’t mean the end of marketing insight – but it would spell the end of marketing databases.  The playing field would be levelled with marketing agencies competing on their ability to analyse the data to which they are given privileged access rather than who can build the biggest database.

“Emails and resulting data should be collected as a matter of course. There are numerous opportunities to collect emails from customers and it’s surprising how many companies don’t prioritise this activity. Emails should always be as personal as possible. It doesn’t take much effort to have one-to-one communications with thousands, or even millions of customers.”

The enlightened have long since realised that email based marketing really isn’t the way forward.  Sure if you send out a million emails for £1 and get a handful of responses it seems like great R.O.I – but honestly I don’t want to get into this, you all know there are better, smarter, more elegant solutions out there.

“Ensure compliancy.  It sounds obvious but ensuring your email collection policy is compliant with data law is even more important when you remember that the ICO has the power to fine you up to £500,000.”

For anyone that knows me, or even hears me speak on this issue, I apologise you already know what’s coming.

Why is it that whilst many CEOs “think that client data arrives on its own, costs nothing to source and has little or no value” that many Marketing Professional’s think that data compliance is;

• only worthy of a fourth place mention in a list of deriving value from data,
• a purely legal issue,
• and in the event of failure only going to cost £500,000?

Compliancy is at a minimum two part.  Sure remaining within the legal framework set out by the ICO matters – A LOT.  But don’t forget that actually any business holding personal data in the EU is also beholden to the higher and more punitive powers of the EU.

The second part to compliancy is the real sting though, and the one which is often (as here) forgotten.  Breaching data protection legislation may result in fines or restriction BUT it will most assuredly have a greater effect on a business’ reputation.

Consumer trust in businesses holding personal data is already under great scrutiny, breaching that trust could very well cost an awful lot more than £500,000.  Just ask Phorm.

Are We Ever Really Without Identity?

Last week I attended a Mashup Event in London on The Value of Your Digital Identity.  There is plenty of write up available online with this piece from Jude Umeh from the BCS being amongst the most rich.

In Jude’s post he restates a question raised during the panel session by Ben Hoyle, a European Patent Attorney;

“What about those lacking an identity? There are many still without bank accounts or fixed addresses”

It’s an interesting question simply because it highlights what I believe to be a common misunderstanding of identity; that identity is something we have, create or obtain.

I don’t want to get into the philosophy behind identity or indeed into the technicalities – those are well discussed by people far more knowledgeable than myself but a simple viewpoint here may be helpful to most.

Identity is generally accepted to be “an aggregate of all those views, opinions, thoughts etc about the self from third parties.”

Confused?  Okay think of this;  One’s name is not one’s identity.  I have many names none of which I have given myself.  My parent’s called me Barnaby, my friends Barney, my kids Dad and any number of other less repeatable names by various people over the years.  The point here is these are identifiers for me.  More importantly they are identifiers for me in particular situations or contexts from other people’s perspectives.

In marketing speak these are persona, they are the various roles I play in life.

My identity is all of these mashed up together.  It’s just that a third party may only ever see me in one role, or persona and so to them that is my apparent identity.

Just to make this a tad more confusing, strictly these identifiers (names) are for the relationship (role) that I play with others.  Whenever I interact with someone (or indeed something else – say a business) a relationship is created and intrinsically so is an identifier.  For example when I first shop with a business I play the role of customer to which I am assigned a customer number as an identifier – the weird thing is I as the customer may never even be aware of that identifier as it may be nothing more than “he was the one hundred and thirtieth customer in store number 6 on that date.”

Okay so identity is everything you do, created about you by others for the purposes of defining a relationship of some sort.

So back to the question of “What about those lacking an identity? There are many still without bank accounts or fixed addresses”

Given the above view on identity I would posture that there are a very very very small number of individuals in the modernised world who have NO identity.  Strictly speaking everyone the second they are born (not going to argue the whole conceived thing here) has identity as they have a direct relationship not only with their mother but also with whomsoever played midwife / OBGYN.

We get given a name, our birth is registered, we enrol in school, start work and get a National Insurance Number in the UK (think SSN in US).  Every time we interact with another person, agency or business yet another identifier is created.

So in a modern society we are never really without identity.  With regards to the question posed by Ben the problem isn’t a lack of identity but more a distinct absence of transferable identity.

Curiously this is a problem well understood by large web properties and in particular social networks.  I may have an account on say Facebook with a huge wealth of Barney invested but when I want a new Twitter account I  am in effect an “identity less” new user with little baggage or ability to transfer my self from one service to another.

The web space has been pondering this for years.  OpenID was and is (post it’s blog spam prevention conception) touted as a solution for porting and identifying one’s self from site to site.  Today OAuth, Google FriendConnect  and FBConnect offer a glimpse of what identity portability may provide in the future.

Back on topic though.  If I wanted a bank account I would be asked for identification to which I could produce any number of pieces of information; from drivers license to passport to a fingerprint of my social graph – a map of all my personal relationships. The fact is any identity identifying details could and should suffice (bank regulation accepting).

So because a person doesn’t have a bank account or a fixed permanent address does not render someone identity less at all.  It’s just that current structures for identifying an individual are tied to far too strict a set of minimal options.

As a byword; in New Zealand the driver’s license is ONLY acceptable in law as proof of entitlement to drive on public roads.  It is NOT a piece of identification that can be legally relied upon for any other purpose.  Yet I have clear recollection of opening a new bank account with KiwiBank – a state owned and run bank, where it was THE ONLY form of identification they would accept.

The is one situation though where people do appear to be identity less – the refugee, and more particularly the stateless individual.  In a series of conversations and arguments with Vinay Gupta during early 2009 he was able to convince me of situations in his experience in Africa where people without papers or any physical form of identification were held in refugee camps after crossing borders.  To the hosting country they were in effect identity less.  No one was willing to even go so far as to assign a case number or start asylum  proceedings.  They were no one in the eyes of others.

Probably Not – In Reply to Tepilo Ending Need for Estate Agents

Sticking comment here as can’t be arsed with yet another signup or login just to comment.

Let me start of with I’m not coming out to defend the Estate Agency industry as a whole.  Much of their reputation is well deserved there are a great many sharks.  However there are also plenty of super well trained, nice, kind, informed and helpful agents too.  Just like any industry I guess.

Today Mike Butcher has a guest post up on the Telegraph’s website entitled “Does Sarah Beeny’s free property website herald the end for estate agents?”

Well simply the answer is no it won’t.

The whole FSBO (for sale by owner) model is well understood in America, Australia and NZ where a homeowner takes control of the whole marketing and negotiation process in selling their home.

The system works for a percentage but the last research I saw this was something like < 10% of all FSBO resulting in sale.

The reasons are simple.  Most people are not trained in marketing and in English based cultures haggling (negotiating) is a skill long forgotten.  For anyone in the UK the latest adverts by MoneySupermarket.com starring comedian Omid Djalili even mention the “cringe gland” being prevalent in the English where haggling is concerned.

The problem for many is that, quite rightly, their house is not a property it is a home. Somewhere they are emotionally tied to and when it comes to the business of selling a home removing that emotion is critical.

Why?  Well for a start the biggest killer in selling a property is price.  Too high and no one will even view the place, or at least if they do they will most likely be disappointed having expected it to have been better than it is – after all it is priced in a higher bracket with better properties.  Too low and most people will avoid it thinking there is something wrong.  Pricing is key.

Without training or at least access to decent quality comparable sales data it is really hard for a homeowner to get the pricing right.  Sure there are valuers or surveyors but they cost money and the whole point of FSBO is to avoid cost, right?

The second part to removing emotion from the process problem lays in mentally detaching oneself from the home and treating it as a commodity to be sold.  Trust me on this, it’s hard.  And without that detachment even the simplest of selling tools such as presenting the home for sale is a tricky task.  Home prep is not about clean and tidy, it’s so much more. Sure clean and tidy matters but it’s more about creating a space which prospective buyers can visualise as being their own not yours.   Try removing all personal effects, photo’s, pictures, that lovely family heirloom brass plate from the wall and living in the space for a while.  Your home stops being your home.  It’s hard.

And so back to Beeny’s new website, Tepilo.  I’ve seen a number of these “market your own home and save on fees” sites along with magazines, papers and even shops come and go over the last 10 years.  Sure this one has a “celebrity” name behind it.  Sure people are becoming ever better equipped with internet based resources for pricing, marketing and finding property.  But…

An estate agent does this for a job often 7 days a week. The good ones are formally trained (and where available qualified) and armed to the teeth with better information, better skills, more time.

There are amateur mechanics out there who will tinker with their cars.  I don’t.  Sure I could learn a few skills but when it comes down to the safety of my family I’m the first to throw the work to a local garage.  It’s no different in the internet space.  Anyone can get a copy of Dreamweaver or Frontpage (they still do that?) and knock up a website – will it be any good?  Maybe.  Could a professional have done a better job, probably.

Finally every agent understands fees are a sticking point when competing for business.  You can always try to haggle just don’t forget they haggle for a living.  More importantly find yourself an agent who can offer you more value in using their services than they cost, they should be able to prove their track record on this so just ask.

Screencast of Models, Ownership and Privacy

Okay here is a screencast of my presentation from the recent BEUC Forum on Consumer Privacy.  It has taken longer than hoped to get up and running (call me a luddite – I’m just not a video person and so learning new tools has been a steep old learning curve).  BTW sorry for the slightly iffy sound quality (inc the slightly monotone narration), a super snotty cold is never going to help.

Proper thanks must go to the masses of wonderful people who make their photographs available under Creative Commons (especially those good enough to allow commercial use) without whom this just would have been a non-starter with stock art websites charging way beyond my means.  That and really I needed to hammer the CC license thing home – you’ll see why.

On the subject of Creative Commons, this screencast is available for you to take away, use & redistribute (yup even for commercial stuff) at will as long as it doesn’t get edited, attribution is given and all the licenses of embedded works respected (i.e. no nicking bits of other people’s stuff).

So to all those whose works I have used, here’s credit where it is due:

For anyone needing/wanting you can also download the presentation in 3GP format (approx 7mb) for your mobile/iPod here.

Should You Validate Your Twitter Following?

I followed someone today on Twitter, a real person in fact I had just had a coffee and a long chat with them.  Nothing new there I agree but within seconds of committing the follow I received a Direct Message from a service called TrueTwit asking me to validate my profile.

The premise of the service is that by asking all new followers to jump through a few basic hoops (captcha’s and such) TrueTwit can validate that the profile belongs to a proper person rather than a spambot.  Seems a smart enough idea providing some provenance but it got me thinking…

1. Do I really care if accounts following me are real people or bots enough to ask new followers to place a barrier to them following me?
2. By not validating oneself as a person how does TrueTwit preclude that account from following other than by simply applying a “block”?
3. Even blocking a profile does not prevent an account on Twitter from @ replying anyway as it is not follow/following dependant.
4. What about those bots I actually want to follow me, those which I use for automated functions?

What would be more useful to me would be the ability to validate those that I wish to follow, or at least selectively.  Of course the problem there would be akin to the first point above, “do I care if you follow me enough to validate myself to you?”

Any thoughts on Twitter or any other SocNet validation usefulness?