As the common adage goes, “if the product is free, you are the product” but how true is that? A common practice in free products is to sell your data to third-party advertisers in exchange for content or ads personalized to you.
So what is your data worth? Most people have no idea how much their data is worth. It might be a whole lot less than you think. Some of us freely give it away without even thinking about it. We share our addresses, birthdays, and phone numbers with businesses and organizations all the time. We post pictures and updates about our lives on social media without a second thought.
How much is your data worth in reality?
It's tough to say for sure. It ranges depending on what the data is, its quality, and how it is used. In the case of Facebook, the data of an active user is worth $2 a month. Whereas Equifax, famous for their 2017 data breach of 147 million individuals (exposing names, birthdays, addresses, social security numbers…), was fined $525 million, which comes down to a $125 minimum payout for each person for their data.
From a marketer's perspective, their willingness to purchase your data may be less than what you may think. For a marketer to buy an email list, it may cost them between $100 and $400 per thousand emails targeted to consumers, which means each email is only worth a few cents for the marketer. According to a calculator by Financial Times, even if you’re a millionaire in America with high purchase intent, your demographic data might just be worth around $2. And according to a Wingear/Sunstein study, there is a huge discrepancy between willingness to pay (for data) as a marketer versus willingness to sell (data) as a consumer. For something as private as health data (physical/mental health data), the willingness to accept for giving away data privacy is $100/month for a consumer, whereas the willingness to pay for a marketer is just $5/month according to the survey. Do you find that surprising?
While your data might be worth less than you think to companies in monetary value, it may be worth a lot in terms of having privacy and control. Here's a closer look at how your data could be used and how you could start taking steps to protect it.
The Recent Epic Games' $520 Million Privacy Fine Fiasco
In December of 2022, Epic Games settled a lawsuit with the FTC over allegations that they mishandled user data and were charged $520 million US in fines and rebates to affected players. Epic Games is the company behind the popular online multiplayer game Fortnite. They violated the Children’s Online Privacy Protection Act (COPPA) by collecting personal data from players under the age of 13 without parental consent, they then used tactics that encouraged kids to download in-game content for costs real-world dollars. This is just one of many examples where companies utilized your data to maximize profit.
Does this mean a 13-year-old’s data is worth more? For Epic Games, since the majority of their users are young adolescents, the data of a 13-year-old with a gaming habit would be worth more than a middle-aged person with little to no interest in video games. Take this data elsewhere, it may not be worth much anymore. For example, a company selling yachts would have little use for a 13-year-old’s data since they would likely not have purchase intent, whereas a middle-aged person may be.
What can You Do to Protect Your Data?
In the modern world, it's essential to take steps to protect our data from being accessed and used by others. Other than using strong passwords for all of our online accounts, and making sure not to repeat passwords across multiple sites, there are more deliberate ways to protect your data and take back control.
It is first paramount to understand how data is stored and could be used by companies. While browsing the internet could feel like a private experience, your every move could be tracked accurately and all data you input could be stored on that company’s server for eternity. For example, when browsing YouTube, every click on a video, your watch time, where you are, when you watched the video, or even scroll-stopping moments are data that is stored on Google servers that allows them to create value. These data are utilized with the overarching goal to improve UX. In most free products, these data are also provided to advertisers to allow segmenting and better serve ads tailored to your preferences. On the other hand, when you input a phone number to purchase a product, unethical companies could take that information and sell it to a third party, and that is usually how scam call centers buy your number and know your preferences.
In a perfect world, we could discard these products and lead a life with no online footprint, but these products often add a lot of value to our life. Just think of a time when your friends shared wedding photos online or you learned baking by watching a YouTube video. To adapt to the times, it would be a good practice to fine-tune the settings to block tracking, avoid personalization or create anonymous accounts that are not linked to any of your accounts.
To take it a step further, you could use private search engines like DuckDuckGo instead of Google to preserve anonymity or use a tool like haveibeenpwned.com to see if your email has been leaked to unwanted third-party companies. When it comes to sharing your personal information with companies, it's important to be selective. Only give your data to reputable companies and make sure to read the terms of service (TOS) before agreeing to anything. For example, when coming across an online store on social media (sites that are outside the app), be sure to check the TOS and validate their credientials before inputting your credit card number. This will give you a better understanding of how your data will be used and help you make an informed decision about whether or not to share it.
The Future of Data and its Impact on the World
The future of data is an exciting and intriguing concept. With the advent of technological advancements like artificial intelligence, data analysis will become an important factor in decision-making processes in our day-to-day lives. An easy example would be Tesla using driving data from their users collected from a variety of built-in sensors, cameras, and radar systems to improve their autonomous driving technology. While self-driving cars would be very convenient, the same data (such as your routine driving route, and how safe you drive) could potentially be funneled to insurance companies which could dictate your insurance premium rates. The implications of data collection would be hard to measure given its use case could vary so much between industries.
Data will also play a major role when it comes to predicting trends, forecasting performance, and spotting potential problems. By using data patterns and correlations to gain new insights, businesses have the potential to make smarter decisions faster than ever before. The implications are far-reaching; from reducing operating costs to improving customer service, the potential benefits from data can have a huge impact on society. The global community must work together to ensure that the maximum use of data is combined with responsible regulation to maximize its benefits and decrease risk.
In conclusion, the value of our data can vary greatly depending on the type of data, its quality, and how it's used. However, in reality, your data might be worth significantly less than you think as compared to how much companies are willing to pay them for.
It's important to understand that while the internet has made our lives more convenient, it has also made it easier for companies to access our personal information. For now, there will always be a trade-off between user experience and the amount of data we have to provide. To protect our data, we must take extra steps to control who has access to it, and how it's used. If privacy is a true concern for you, here’s food for thought: how much would you be willing to pay every month to be completely private on the internet? For peace of mind?