Establishing a Fair Market Value for Data
Establishing a Fair Market Value for Data
Trading zero-party data comes with a price. We're about to find out what that price really is, and my opinion...doesn't matter that much!
A little bit of a different newsletter this time around. Write enough case studies, and you start to lose your mind a little bit. On top of that, I’ve been hard at work preparing for the release of our new Shopify app. More to come on that a bit later, but the radio silence does not mean things have been slowing down here at TIKI. In fact, quite the opposite. There’s lots to talk about. But that’s the type of update for another time, and one I will reserve for Tiki Mike. Case studies will resume shortly in all their glory. Stay tuned.
Let’s dive into something I’ve been thinking about quite a bit. So, you wanna create a free market for data where users can transact data in exchange for discounts, benefits, and perks, do ya? Or maybe that’s just me talking to myself. Fine. We want to create a data marketplace. Many a-times the question has protruded into my thoughts: what exactly would a user be willing to trade, and what makes one of these exchanges fair?
The entire premise of TIKI was founded on the idea that the way data is collected and exchanged is broken—for too long the users have gotten the short end of the stick. Anyone paying attention could see that data was an asset sans proper protection for a long time, and even though a myriad of legislative changes and corporate policies have brought more protection for data, it is still entirely common to read headlines of data breaches and data misuse.
As we progressed with our product and elected to take the route of an SDK—one that was business-facing and was interacted with by users via the applications and websites they already use—it became clear that the role TIKI played in this exchange was similar to that of a pipeline: we provide the infrastructure to allow for the transactions. We do not govern over the transactions—we allow the businesses and their users to negotiate and transact in, what we hope is, good faith.
I have thought rather hard about what I myself would exchange and what I would be willing to receive in return. I would assume I am in (at least) the 95% percentile of the population when it comes to wariness over data, and with that comes (potentially) a more critical lens when it comes to transactions. Surely I’d look at transactions analytically. But how much does that actually matter?
At TIKI, we don't want to push customers to make decisions. Our mission is simple - provide the infrastructure for a new data exchange model. As a business, you simply need to make an offer users want to accept.
In this digital marketplace, businesses come to the table with tempting offers - customized discounts, personalized perks, and exclusive experiences. These incentives are meant to entice users to consider sharing their data. The true power lies with the users. We want them to have full autonomy in choosing what data they are comfortable sharing and what rewards they desire in return.
In this evolving landscape, the true value of data is far from fixed. It's a spectrum that reflects the diverse privacy expectations of individuals. Some users might eagerly trade their data, enticed by the offered benefits, while others may need reassurance before sharing. And, of course, there will be those who prioritize their privacy above all else and choose to opt out, asserting their data ownership.
This will be a mutual learning process for businesses, users, and us here at TIKI. What I would trade and accept personally is a moot point, and that’s okay. As with any new product, especially one with as much novelty as ours, there’s going to be an exploratory phase. The system needs to be learned, and the idea of valuing data in terms of benefits received needs to be integrated into the way the consumer thinks and behaves. We need to do our part in terms of the user experience to ensure consumers understand what they’re doing, but it lies with businesses to create the offers that get their customers to agree.
This negotiation phase sets a precedent for a myriad of potential benefits for businesses and consumers alike. For businesses, this new data model opens the doors to zero-party data - the information users willingly share. Authentic insights, built on a foundation of trust. Armed with these valuable insights, businesses can craft tailored experiences and create genuine connections with their customers. And in our model, it also means businesses can get paid for their contributions to TIKI. Not too shabby.
This transformative path reshapes not only how data is exchanged but also empowers all parties involved. By embracing this new ecosystem, businesses and users can transact with trust, leaving behind the old model that left users in the dark and businesses on the defensive.
We’re all going to learn together through experimentation. In time, we can establish industry standards, make recommendations to businesses, and finally give estimates of the value of data with the perspective of both businesses and consumers considered, not just the shrewd perspective of this blog’s author pondering his own willingness to transact data to whom and what for.
In the end, the fairness of these transactions is not for me to decide. And I suppose that’s the beauty of it. Free markets need to be free.
Interested in zero-party data for your business? Learn more about TIKI.