MARKET | Dec 12, 2018

How much are data on Internet worth?

The datum is a power in the hands of a few: spreading knowledge among users can stem the drift

We all put a huge amount of data on the Internet, knowingly accessing the Web or social media and without knowing it simply in living everyday life. 40 years ago Bill Gates promised to put a computer in every home and 30 years later Steve Jobs upped the game by promising instead to put the Internet in everyone’s pocket. This has practically succeeded in the economically advanced countries, bringing about great improvements in every aspect of our existence, but also introducing side effects.

How are data produced?

Technology allows people and increasingly “things” to produce data with a trend that appears to have no limits. Even the latest product launched by Amazon, Alexa, has as its aim the facilitation of interaction with the digital world that surrounds us (PC, telephone, domotics, TV and many other connected devices) through bidirectional data packages.

The collection and management of data are the real business of the moment because they make it possible to reduce the possibility of error for those who must make decisions and increase the influence of those who operate on markets. Who owns data, and is able to use them profitably, has the possibility to reduce their costs and increase the average value of customers, creating a real iterative process.

And what about data security?

A central issue is that not everyone knows that their data are being used and, in any case, many are ignorant about how this is being done. Despite repeated alarms, ordinary people are not yet aware of the real importance of their data. This is highlighted by a study carried out by Kaspersky Lab, according to which only 59% of respondents recognize that companies could try to make profits from the sale of personal data to third parties, while 50% of them are unaware of what these same data could be worth for both companies and cybercriminals.

Our life is now a mix of analog (real) and digital (virtual) life, an envelope for many processes of acquisition of uneven data. Distinguishing the aspects belonging to one or the other area is also becoming complicated. What is perceived by listening systems and by people is mainly the result of what is present in the various digital channels, creating an overall picture that is not completely controlled by the individual.  The tendency is to pay much more attention to digital than analog identity, because it is the one that is most known. Certainly, much information about us is acquired and spread irreversibly. The website even updates in real time the statistics of events that happen all over the world (births, deaths, consumption and much more).

Over the years, the development of technology and systems has not taken into account aspects related to privacy, creating a series of flaws that jurisprudence is currently hastening to regulate. Our identity, together with the data we generate, creates the so-called “data subject”, that is, that set of information that the EU has chosen to defend, for example through the right to consent and processing for the use of data.

How are data used?

Decisions based on facts and analysis enable the definition of one’s strategy with greater precision and being successful. Thanks to data, today’s organizations can be more profitable, achieve better performance, increase market share and improve operations.

In reality, there are many aspects that characterize Big Data and can be summarized in the so-called 7 V’s: volume, which simply expresses quantity; velocity, because data must be accessible in real-time; variety and variability understood respectively as the different types of data (often unstructured) and the different meaning that a datum can bring with it depending on the use made of it; veracity, which concerns the level of accuracy of the datum; visualization, understood as the ability to use it through appropriate technologies and methodologies; finally, the most important V, that is value, because it is fundamental that, once collected and analyzed, the value necessary for the company or in general for those who “consume” the data can be derived from them.

Data are just one of many factors to consider when embarking on a coherent and effective path of Digital Transformation. They are certainly an excellent starting point for a transformation that is primarily of business, because a conscious use of data brings with it a series of related consequences, including a new approach to the customer, a change in corporate assets and new organizational models that substantially change the business model.

What is the value of data?

Until today, when people talked about the economic value of data, they always referred to the static data of people, that is, to the socio-demographic data that characterize them and which tend to remain unchanged for one’s entire life, or at least for many years (name, surname, gender, profession, etc.).

According to the average market prices of databanks that track the static data of people, the data of a male manager are worth 1 euro on average, while those of a female manager are worth 0.89 euro on average.

Considering that on average a person started to enter their data online about 15 years ago and is likely to continue releasing data for at least 30 years, InTribe estimates that each of us potentially emits millions of data over the course of their life, for a value of over 50,000 euro.

Certainly nothing of what is obtained from the Internet is free and often the bargaining chip is precisely the granting of our information. Profit can be generated from advertising, from automated upselling mechanisms, from the increase in turnover and loyalty obtained from meeting the needs of consumers or from the reduction of costs thanks to processes optimized through predictive algorithms.

It is no coincidence that the five companies that hold most data to date are the world’s largest giants: Google, Facebook, Apple, Amazon and Alibaba. These companies obtain our data, promising that they will not be disclosed and usable outside their systems. Thanks also to this, they now have a commercial value higher than the GDP of a state; they cannot be influenced through any economic counterpart, but in fact determine the fate of the world.

This is a disturbing scenario: those who have data increase their power and the ability to direct people’s habits. The trend seems to be an irreversible one, even if history tells us that, in the end, everything has always been overcome. As usual, the only way to try to stem the drift is to increase the spread of knowledge of these issues in order to induce awareness and consequently decrease the vulnerability of those who access the Internet.

Gianluca Polegri