There’s a digital game of Robin Hood being played: Funneling data from the rich—like Facebook and Google—and transferring it to brands that are thirsty for information on consumers. 

That’s the basic premise for a company called DataLucent, which wants to be a middleman in the booming data trade. DataLucent developed a new type of data brokerage that incentivizes internet users to download their personal information from platforms like Facebook, Google, Twitter and LinkedIn and share it with brands. In exchange for their internet history, consumers are being offered rewards like airline miles, hotel rooms and subscription streaming discounts.

DataLucent wants to be the platform where consumers can share their data across a central exchange with brands, and “essentially disintermediate the social networks,” says Brad Davis, co-founder, DataLucent. It's certainly an ambitious program to get as much consumer information as possible by taking advantage of a little-known data backchannel. 

Recent internet regulations within the U.S. and the European Union have forced websites to make personal data available and portable, meaning the data can be downloaded and transferred. DataLucent partners with brands to inform consumers of their right to tap into the data, which can include every click a person made on Facebook, every search on Google, every location logged, every video watched, every ad they ever saw, and every post they ever liked. This data is the bread and butter of the digital platforms; it powers their advertising engines.

DataLucent enters the marketplace as platforms lockdown access to more information on their users, making brands desperate for data. Just this week, Apple rolled out its long-awaited iOS 14.5 software update to iPhones, which was a harbinger of the coming data freeze. On Apple devices, all apps now have to show a prompt that explains exactly what data they collect and how they use it, and a consumer has to consent to tracking. There is a fear that a large chunk of consumers will block tracking, cutting off the companies that have relied on such data for personalization and marketing. Apple has implemented similar restrictions on tracking through its Safari web browser, and Google is following suit on its Chrome web browser and on Android devices.

Now, DataLucent's solution may sound like a privacy fiasco waiting to happen. But executives at DataLucent say they are just empowering consumers to take control of their own data to generate value from it, instead of giving it away to Facebook. In exchange for the data, consumers are earning rewards and offers.

So how much is it worth? In one promotion, DataLucent paired with a sports league, which operates its own streaming app, and offered fans a month of free streaming—valued at about $10. The league had some success, and then upped the offer to a year of free streaming—or about $100. 

The company has to comply with all the latest regulations like the California Consumer Privacy Act and EU’s General Data Protection Regulation, which requires direct permission from consumers to collect and use their data, says Tim Moynihan, co-founder at DataLucent. “I’ve worked with very large data companies that build valuable data sets that they license out for lots of money,” he says. “We’re doing the same thing for consumers.”

DataLucent declined to name the brands it is currently working with to develop its data exchange, but they include luxury apparel makers, sports leagues, alcohol and soft-drink conglomerates, and restaurant chains. In one case study, with the sports league, DataLucent said that it targeted the league’s fans by email, and that 6.7% of the consumers participated.

That amounted to “hundreds or thousands” of consumers going to Facebook and Twitter to download their data, and then they uploaded it to a website designed for the sports league to ingest the data. 

On Facebook, Google and Twitter, there are data download options, and DataLucent says it will also be able to use Amazon and Apple data in the future. The process to access data differs depending on the platform. It’s not a lengthy process, but there are multiple steps and settings to navigate to retrieve the data and hand it over.

For most internet users, they need a handy explainer on how to even go through the motions. So far, DataLucent has only led “thousands” of consumers through that data journey, according to its executives. Obviously, the more consumers who participate, the more valuable these data sets become, but the ability to scale is still a looming question mark. 

Information overhaul

Also, it’s unclear how well received this program will be by the platforms. By law they are required to comply with data requests from users, but they don’t have to make it easy for DataLucent to integrate with that data seamlessly. The ease of using the data depends on the types of computer files they create and the software language they use, and it’s not always easily converted to the exact program brands use in their own proprietary systems.

“It sounds like a heavy lift to me,” says Tim Glomb, VP of content and data for Cheetah Digital, which is another customer engagement management platform that is in the business of brand data. He questions just how many brands will actually use the tool and how willing everyone involved will be in adopting a new unified programming language. 

DataLucent is not the only company popping up to teach brands how to forge direct data relationships with consumers. There’s a rush among brands to set up channels that hit customers through websites, email and text messaging, to establish one-to-one communications and build new data connections. 

Cheetah Digital, for instance, runs campaigns that go direct-to-consumers and rewards them for sharing their personal attributes and taking surveys. Cheetah Digital says it has worked with Hilton, Walgreens, Godiva, Williams-Sonoma and others.

Glomb says that DataLucent’s concept seems promising, but there are reasons consumers could be reluctant to hand over raw data about their internet behavior. “Cookies and behavioral and tracked data, marketers are addicted to it like heroin,” he says. “And now all of a sudden we’re looking for the next heroin. We’re looking for Fentanyl.”

Still, Glomb acknowledges that if a program like DataLucent could scale, with millions of consumers participating, that would be a supercharged data exchange. The scale is another hurdle though. “Why would you want to go to Facebook and Google and take these things that you’re pissed off that they were already tracking you on, and hand it to a brand,” Glomb says.

DataLucent says it put a safety net in place, allowing consumers to revoke brands' access to their data at any time, Moynihan says. 

Who needs it?

The marketers that are most interested in these types of data sources are ones like beverage and apparel brands that don’t sell directly to consumers. “They really want to develop first-party data relationships with consumers who are engaged with their brand, and that’s been hard for them,” Davis says.

There are a number of ways brands can apply this data, according to Davis, and they don’t necessarily need millions of consumer profiles. A representative panel of consumers could provide insights into the characteristics of the customer base.

“What we have seen is that the wines and spirits brands, the beauty brands, the large apparel and accessory brands, the multibillion-dollar brands that invest in advertising heavily, they need segments, they need micro-segments, they need audiences," says Milton Pedraza, CEO of Luxury Institute, a retail consulting and research firm that’s working with DataLucent to recruit luxury brands for the program.

DataLucent’s program was shown to privacy and data watchdogs to see if it passes their standards. Augustine Fou, of FouAnalytics, is one of the digital advertising experts who has examined the program. At first blush, DataLucent’s protocols seem to pass the basic tests of giving consumers choices and control over data, Fou says.

“I can’t say whether it works or not but I think it’s helpful for privacy,” Fou says. “Right now, most consumers don’t know who is collecting their data and where it’s being collected, and they certainly didn’t give consent.”

Still, there are some concerns, Fou says. Most privacy advocates think of Cambridge Analytica as a cautionary tale for what can happen when large amounts of consumer internet data is abused. Cambridge Analytica was a third-party that used Facebook applications to get consent from people to collect their and their friends’ data. The data was then put to nefarious political purposes. The case was one of the reasons Facebook agreed to a record $5 billion fine with the Federal Trade Commission in 2019.

The case shined a light on how data brokers could run amok with access to too much personal information, and Facebook began to crack down on sharing data from inside its vaults.

To prevent similar breaches of trust, DataLucent has to make sure it can track where it shares its data, and not give access to irresponsible third parties, Fou says.

“Our contracts have to govern that and there have to be penalties for brands that would abuse the data,” DataLucent’s Davis says.