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Latest insights and trends in Personal Analytics, Operational Intelligence, and Workplace Productivity.

Jul 21
The Real Price of Personal Data (Part 1)
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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