Here's My Personal Data, Marketers. What Do I Get For it?

Web Startups Bank on Future Where Consumers Broker Information About Themselves

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In a vast, minimally policed web where people are increasingly mindful about whom to trust with their information, personal data is being pointed to as the currency of the 21st century. The question is : Who controls that currency?

A number of startups are launching with the argument that consumers themselves should be in control. The potential promises of restoring transparency and control over data to users range from lower health-care premiums to better deals on vacations and, in some scenarios, even cash in exchange for the purchase-intent data that marketers crave.

Upward of $2 billion a year is spent on third-party data about individuals in the U.S., according to a Forrester report. And in a tally of potential global bogeymen, erosion of personal privacy ranks second only to fear of the financial crisis deepening, according to a study on consumer privacy concerns, conducted by McCann Worldgroup.

"People are getting more savvy about the fact that there is value associated with their data," said Laura Simpson, Global IQ director for McCann Worldgroup. Ms. Simpson believes there's an opportunity for marketers that offer deals and discounts in return for personal information and are transparent about the exchange -- notifying consumers that they'll receive a customized newsletter near their birthday if they provide their birth month, for example. She also pointed out that Amazon is the most trusted U.S. brand, which she attributes partly to the company's using data to tailor recommendations in a way that customers perceive as beneficial to them.

It's in that context that personal "data lockers," or online information repositories designed to be the digital equivalent of a bank with security infrastructure in place, are forecasting a marketplace where consumers have considerably more leverage.

Personal is a startup in open beta aiming to recast the consumer-marketer relationship altogether. With $7.6 million in funding and 42 employees, the site works by allowing users to enter their personal information in structured-data fields within individual "gems" -- or buckets of data in categories ranging from banking particulars to liquor-cabinet contents to babysitter instructions. They can share gems with selected individuals, and it's also intended to be a tool to auto-populate forms.

Personal plans to launch an anonymous marketplace early next year, where marketers will be able to target users based on their personal information. It envisions a scenario in which consumers are compensated for buying products or viewing ads for products that are likely to be relevant to them.

"What we envisioned was effectively creating a matchmaking marketplace, and it's very predicated on online dating," said Personal president-CEO Shane Green. Consumers will assume the role of women, who are typically the choosier sex on dating sites, and the marketplace will employ a ranking methodology to show which deals a user is most compatible with, Mr. Green said.

Another take on the data locker concept is being formulated by Singly, a startup in closed beta. Singly is an open platform where people can store a copy of their data after pulling it in from sources ranging from social-media feeds to purchase histories from brands, and developers can build apps to leverage that information.

Singly co-founder Jason Cavnar foresees users eventually reaping benefits such as lower health-care premiums based on data they choose to share with insurance companies to show that they're physically fit. Or, on the more pedestrian end, better recommendations from review sites such as Yelp. While he declined to disclose how much money it's raised, Mr. Cavnar said that Singly, which has 10 employees, is planning to allow a certain amount of data to be stored for free, beyond which amount a user would pay.

According to Fatemeh Khatibloo, a senior analyst for Forrester, it's also conceivable that personal data will have discrete monetary value in a future marketplace. For example, auto marketers looking to sell a car for $30,000 could find it worthwhile to buy data from potential buyers if it enabled them to zero in on the ones looking for specific features.

It's possible that government regulation to address online privacy could help push data lockers into the mainstream. While in the U.S. the Federal Trade Commission has delegated anti-tracking initiatives to the ad industry to self-regulate, the U.K. adopted "do-not-track" regulations earlier this year and gave businesses a year to comply.

In fact, it's not so much data collection that has consumers worried, it's how that data is stored and safeguarded. The combined forces of consumer demand and government regulation could ultimately impel data vendors with a significant consumer-facing business, such as Experian, to become a data locker or a portal facilitating the sharing of personal data in order to remain competitive, Ms. Khatibloo said.

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