| Once again,
one of those articles appeared a couple of weeks ago about us “paying with our
data for the free services of Google and Facebook”. No need to hyperlink it
here as such articles are abundant nowadays. But what caught my attention is
that this time we are taken one step further, and the talk now is of no less
than “data capitalism”, which is supposed to supersede the good old “financial
capitalism”.
All right,
if the economic role of our private data is now upgraded to being a new world
currency, let us have a closer look at some numbers.
Google
sites have about 1,2 billion unique users per month, so let us suggest it will
be 1,5 billion for an entire year. Annual revenues of Google were about 60
billion Euros in 2014. This gives us an idea of how much old-fashioned money
can be potentially made with this new “personal data currency”. This amount
apparently is about 40 Euros per person per year. And that seems to be on the
upper side of all reasonable expectations, for comparison Facebook is only
making about 8 Euros per active user per year.
This is
actually not much. If we follow common economic wisdom in the sense that the
fair value of something is what people would pay for it at the market, we
should be embarrassed to see our highly praised personal data generating such
little business output. Even at the higher level of 40 Euros (45 US dollars)
per year, it is still at the level of statistical noise compared to the rest of
the world economy.
Can it be
that the “data currency” is traded below its real value? There are two ways to
answer this question.
If the only
use for the data is advertising (which is the standard assumption by most of
those “data capitalism” pundits), then there is a glass ceiling to its price.
Even if all advertising spending of this world (roughly 500 billion Euros) ends
up being driven by our personal data, we shall still have only slightly more than
100 Euros that can be made with the data from each of us.
The other
way to look at this would have nothing to do with Google or Facebook. If they
can only generate so modest revenues with our data, we should perhaps try
something better ourselves.
Finding a
better buyer for my data is not realistic, even if I would have no problem with
the concept as such. But I can use these data myself, and that looks much more
lucrative than the numbers cited here.
Just to be
straightforward, this is not a non-partisan discussion, and obviously I belong
to the proponents of personal analytics in many different fashions, one of them
being our OmniContext product. If I know certain facts about myself and if I
leverage this knowledge in the right way, there is my personal time to be saved
and there is my personal money (old-fashioned Euros or dollars) to be made.
The next
post will be about those numbers, and they will look much more attractive than
what you have seen above.
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