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.

Ads in My Twitter Stream – What Happened to Informed Consent Hootsuite?

A couple of days back I chose to follow my normal course of behaviour and play with any new Twitter clients for my much loved HTC Hero.  As yet there has been nothing on par with the truly awesome Gravity client on Nokia’s Series 60 by @janole so anything new gets a fair go.

I’d seen reviews of Hootsuite’s new client and after throwing a nice shiny baked ROM at the Hero I was able to download and install Hootsuite Lite.  There is a paid for version ($1.99 at time of writing) but as the only additional benefit I could see was the ability to handle more than 3 Twitter accounts (and I use but 1) there was little point in spending the cash just to see if it works.

Setup was simple enough, even though the you get hassled a couple of times to create a new Hootsuite account before being offered a connection to your Twitter account.

Now I’m not going to review the application other than to say it’s very usable, has some decent thinking around navigation and handles a Twitter account admirably – at least on par with the current leader Seesmic in my opinion.  But something odd happened after a feed refresh sometime on Saturday.

I was out and about, hit refresh and a curious new message appeared in my stream from someone I don’t follow.  This in itself given Twitter’s problems of last weeks with random tweets appearing was nothing too odd but this tweet had a different coloured background and the format of the message was odd.

I quickly sent out a tweet to the crowd asking if anyone else had seen these “ads” but everyone who responded hadn’t. Was this the first inkling of the much talked about Twitter advertising model.  If so it was pretty well exactly what I had expected it might be but had no knowledge of it having yet been enabled.

Of course being out and about research was a little hard to do.

So yesterday I sat down for half an hour and did some digging.  It turns out that Hootsuite have partnered with a third party Twitter advertising agency called 140Proof who’s model is to sell advertising messages injected directly into one’s stream by the client application.  They look and feel like tweets but they aren’t – they are put there ONLY in the application stream.

They are inoffensive and not at all obtrusive, as I said they pretty well looked and felt how I would expect a Twitter ad to be BUT I hadn’t asked for them and more importantly I couldn’t recall ever being informed that I was going to get them.  There were no signup T&C’s with the mobile app, no details easily found on Hootsuite’s web page, nothing.

A little more digging and it turns out that, according to this article on Techcrunch that,

Twitter clients pass 140 Proof a user ID list (with no names) and the public information contained in a Twitter users profile, and on the advertiser side, advertisers bid on ads to be directed toward users based on keywords in tweets, followers, as well as device, location and platform. 140 Proof’s algorithms calculates Twitterer’s “persona” based on public tweets and who they follow and serves ads to users based on this data.

YOU WHAT?  So without my permission Hootsuite passes my PI and graph to a third party who then does their thing with it, sells that bundle (anonymously granted) and throws back a targeted advert!

Now sure my stream is public and viewable by all but that doesn’t make it acceptable for a business to utilise that information for their own gain without at least first asking for permission.  What happens if you have a private non-publicly viewable Twitter stream?  Does Hootsuite not work or do they just blindly continue to pass that data on to 140 Proof?

I don’t mind the ads, they make sense, they (in theory and assuming I pay them attention) pay for Hootsuite to offer up their client for “free” (read no money there) but informed consent is required.

For the record NOT one of the adverts I  have seen over the last couple of days has been even vaguely “relevant” nor have I clicked through on any.

I’ll be having a chat with some people over just what consent they should have obtained as surely there must be a requirement in the EU but it’ll be more interesting to see just what sort of lifespan the 140 Proof model will have once Twitter actually do get their advertising live.

UPDATE: I am interested to hear from anyone who has knowledge of the BT/Phorm case being brought by the CPA;  specifically the abuse of Regulation of Investigatory Powers Act (RIPA).

If Hootsuite are intercepting my profile and tweet stream and shipping it off (hashed or not) to 140Proof for analysis and spam would this constitute a breach also?

Don’t get me wrong I don’t want Hootsuite punished I just wonder if this is/were the case what would be their knowledge of the issue and how would the choose to address it.

Spotify Premium Now HALF-PRICE!

UPDATE 15 June 2010: The logs show this is still one of the most read posts on my site despite having been originally posted last October.  The half price offer was short lived BUT it transpired it was also only an introductory offer.  After six months Spotify just cut me off, no warning, no offer of renewing, nothing.  One morning (same day as their “social” features went live actually) it all stopped working.

I still think £9.99 a month is too high a price point for the service and so have not resubscribed.   Sorry but there are NO half price (or any other) offers coming out of Spotify right now.

Only a couple of weeks ago I posed the question on Twitter “would Spotify double uptake if they halved the price?” To which, of course the answer was no, and it was pointed out quite clearly.

Last week we had confirmation from 3UK that they would be releasing the HTC Hero with Spotify Premium baked in next month and hey guess what I’ve just had in my inbox…

Now I am really really tempted.  Having bought 5 or 6 albums in the last month alone at £4.99 a month with offline cache the Spotify model is starting to look attractive.

UPDATE (17:50):  Having just dry run the offer it looks like it is a one-time-use discount code so it is entirely possible the offer is only being made to i) existing Spotify users and ii) even that group may be in some way limited.  Let me know if you had the offer.

Was Vodafone’s PAYG Outage in Bad Faith?

Not being a VF UK user I was a little late to hear that apparently their PAYG topup mechanisms were out for the weekend – probably the busiest period of the week for PAYG users.

Mobile operators are not known for being the nicest of fairest of companies to deal with I know but given the ubiquity and essentialness of their service in modern life it does seem a little poor on VF’s part to not allow normally willing paying customers just to utilise the network whilst VF fanny around with their billing systems.

3UK – Resolution Reached

Okay I promise to try to keep this short(ish) but felt it only fair to actually post a note to say that a resolution has been reached over my protracted escaping from the clutches of the black-hole of customer service that is the mobile network 3.

Quick back-story for those not wanting to read the 2 part monster posts (here & here); I had cancelled, tried to leave, was prevented from doing so and then charged for the privilege of remaining an unwilling Customer.

I’ve said it before and I’ll say it again – I am a very lucky person.  Lucky in that I have the great privilege of having met and maintained contact with plenty of really cool (and useful) people in the mobile industry.

I made a phone call to a senior 3 PR manager (who was on holiday), recounted the story and by the opening of play the following day the mythical 3 Executive Office was calling me to discuss.

Long story, cut short they were very apologetic, ensured the correct cancellations and credits were applied and sent me on my merry way.  Job done.

So to that lovely 3 pr manager, thank you.

To the delightful chap from 3 Executive, I thank you also.

To the senior 3 director who rang me afterwards to discuss the sneaky, underhand and downright dirty tactics of the UK’s mobile industry as a whole over the number portability – a huge thanks.

As a note: the limp and ineffective Ofcom are releasing their draft paper on number fast-portability in August, which will make for interesting reading.