Dollars for Your Data: Paying Customers to Share

With the IoT blazing full speed, some consumers are becoming increasingly guarded about voluntarily sharing their personal info with businesses.

In response, companies that recognize the value of such data are starting to provide incentives like credits, discounts and coupons to consumers who provide it.

Initial  research indicates consumers may be amenable. In a global consumer study in 2016, for example, 54 percent of all respondents (and 63 percent of millennials) said they might provide companies data from their smart home in exchange for money.

“Such strategies challenge the dominant model of data collection without any monetary benefit,” writes Cassandra Liem on “(They) clearly illustrate data can be considered — even from a consumer’s point of view — as a currency for their online activities and transactions.”

Businesses centering around search engines, social networking sites, online videos and content sites have been using such data for years. But it’s increasing in value as marketing personalization becomes a competitive necessity.

 Many consumers are apparently on board with the use of their data for personalized marketing; in fact, a recent Microsoft survey found 56 percent of respondents were much more likely to buy from companies that allow them to “shape their products or services.” Similarly, 55 percent were interested in “adopting technology that would offer up suggestions and recommendations for new experiences, connections and activities that fit [their] personality and needs.”

Barriers exist, however. In another global study, 36 percent of mobile phone users said privacy concerns might keep them from downloading more mobile apps and services, and 47 percent would pay extra for apps that guarantee their data won’t be shared with third parties.

What are some companies testing such incentives?

  • Earlier this year Seattle-based technology firm Placed Inc. launched an Android/iOS app called “Frequent Flyer” enabling consumers to automatically exchange their location data for airline miles. The firm already launched two similar apps to allow for the exchange of consumer locations for money and charity donations; at least 10 million have been installed to date.

  • A Shopkick program automatically rewards consumers with gift card points when they walk in or shop at a targeted store.

  • A platform called Datacoup pays users for their personal data in proportion to advertiser demand; the advertisers receive the data in an aggregated and anonymous format.

  • An app called the Screenwise Trends Panel offers points on e-gift cards in exchange for info on what sites users visit, what apps they use, etc.

  • Handshake is a platform allowing consumers to sell their data directly to companies.

What’s the economic impact?

One way to look at the economic value of personal data to online platforms can be extrapolated by looking at average advertising revenue per user (ARPU). For 2015, reported the following annual global revenues and averages:

Yahoo: $4.98 billion from 800 million users = $6.23 per user

LinkedIn: $2.99 billion from 443 million users = $6.75 per user

Twitter: $2.22 billion from 310 million users = $7.16 per user

Facebook: $17.93 billion from 1.65 billion users = $10.85 per user

Google: $75 billion from 1.2 billion users = $62.50 per user

Overall, applications built on personal data are expected to generate as much as $1.1 billion worldwide by 2020, with one-third accruing to private and public organizations and two-thirds to consumers, predicts Cassandra Liem on That translates to a business benefit of some $359 billion annually in three years’ time.


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