Stephen Robertson, founder of Metis Partners
Stephen Robertson, founder of the award-winning IP valuation firm Metis Partners, discusses the use and value of consumer data as an IP asset.
How many companies hold your data? If that’s a question you are able to answer both honestly and accurately, then you are a special case indeed, for the data collection landscape has rapidly changed over the past few years.
In the days of old, data collection amounted to names, post codes and phone numbers. Travelling salesmen would analyse their contact lists and personalise their sales chatter using the names of their audience. Cold callers would operate under similar tactics, leeching large contact databases and piecing together amalgamated lists of surnames and phone numbers to facilitate their roulette-like sales techniques. Although these practices led to occasional successes, their deployment was as blatant as it was clumsy. But things have changed. The advancement of technology, rise of the internet and recognition of privacy has made the data collection of old child’s play. Today’s complex databases are capable of holding data both vast in quantity and complex in design – and the ways in which the companies are utilising them has evolved, too.
The true innovation of the noughties was the introduction of a new form of data collection; one which transformed the entry-specific data gathering of the past into a passive iteration based upon tracking a user’s activity, rather than their direct response. With internet protocol addresses traceable and web browsers caching the habits of their operators, websites can now track user activities and, even more impressively, use that data to predict a user’s future activity.
In practice, this amounted to e-commerce websites displaying advertisements of products that they knew specific online shoppers would be interested in – sometimes even before the shopper would know themselves. When these marketing tactics are deployed within a self-contained virtual environment, it’s hard to see a downside for the end user. It paints a picture that is both palatable and grounded in reality. Although the collection process itself is shrouded in mystique, it takes place in a signposted environment which users can choose whether or not to explore. Many users may be unaware of the permissions they are granting and the data they are handing over when they access these websites, but even the most tech-illiterate of consumers must realise that some form of information gathering is taking place when they enter these sites.
This information gathering allows professionals to build vast banks of data and analytics which are becoming increasingly valuable in business models, and influencing the assumptions underpinning financial forecasts. This is a new form of IP asset.
Fast forward to 2017 and the environments these data collection tactics operate within are no longer closed ecosystems. The continued, almost unrelenting growth of Facebook and social media as a whole has changed the rules of the game when it comes to information gathering, and companies have changed the way they play it in response. A person’s Facebook account is both a technological pastime and an accurate character profiler for companies and large organisations to exploit.
The information actively entered by users, such as friends, favourite movies, restaurants and hobbies etc., brings with it a whole host of analytical possibilities. More impressive, and, perhaps terrifying for the oblivious, is the passive collection of data that takes place on these social media websites. Facebook, for example, knows far more than your list of two hundred or so “friends”. It knows your social circles. It can separate your close friends from distant acquaintances based on your online communication and activity.
If you use your smartphone for anything other than phone calls, then it knows where you’ve been and where you’re likely to go, too. Taking a picture in a restaurant, for instance, and then uploading that picture to your Facebook account can enable the site to calculate your exact location when the picture was taken, notify the restaurant’s own Facebook page and then tailor future advertisements around your eatery preferences. Activities such as these signal a new dawn of the use of consumer data.
The Age of Consumer Data
Consumer data is changing the very landscape of our society. Its impact is universal, such is the nature of today’s ever-connected world. Although digital mammoths such as Facebook are often the mothership when it comes to data gathering, microcosms designed to interact with larger entities are able to pick and choose the data they wish to extract and exploit, with the user’s permission of course. These microcosms range from gaming apps on smartphones to websites with social media APIs. Although they may seem unconnected, permission requests are streamlined and spoon-fed to users to enable the sharing of their data across multiple platforms. This data sharing and slight-of-hand permission gathering can leave consumers bewildered as to how certain entities obtained key information about them, causing the everyday consumer to slowly lose track of who has access to their most valuable and private information.
One of the cornerstones of the IP100 is data management; i.e. how entrants best manage, protect and exploit the data they have. Many of our IP100 entrants have demonstrated that they take tremendous care when handling their customer data, with companies such as Good-Loop, Digitonic and Metail – all of whom scored well in this year’s “Critical Databases” IP asset class of the IP100 – using their collected data to enrich user experience. Not only does this improve their customers’ experience, but it also drastically increases the potential monetary value of the data that these companies hold. Investors and acquirers want to know that a company has taken appropriate measures to protect and manage their IP, and data is no different.
Storing data in comprehensive, regularly cleansed and easily transferrable databases is a must for companies operating in this area if they wish to effectively monetise the data they hold, or if they hope to do so in the future. Consumers, too, can learn from good practices such as these, by taking more care of their personal data and protecting its integrity and use by others. Doing so will save consumers both time and money by not only reducing the quantity of spam emails, junk mail, cold callers and phishing emails, but also by reducing the likelihood of identity theft and financial fraud as a result of data leaks. Your data is valuable. Protect it as such.
So, how many companies really hold your data?
Our BQ Bulletin emails will land in your inbox at 7.30am, Monday to Friday, with a mix of the latest local business news, national news, and features to inspire you. Sign up here!
Click here to read our privacy statement