FEATURE2 July 2013

Exchange rate

Want someone’s data? Then what are you going to offer them in return? Colin Strong examines the quid pro quos of the Intention Economy.


On 4 July, 50 volunteer donors will sit in a room, poised for action. They are not donating their blood or money, but their personal data. These donors will be working with organisers of the Midata Innovation Lab (MIL). They will enter details of their utilities, bank accounts, telecoms companies, and so on, in order to access the huge amount of transaction data that is held about them. They will also be entering other data about themselves such as their date of birth, whether they have a mortgage, and their attitudes and purchase intentions.

MIL is a collaboration between the UK government (led by the Department for Business, Innovation and Skills), the Open Data Institute, and UK businesses, designed to build a test-bed for developers of new personal data services. It’s designed to explore the sort of services that could be built around personal data: for example, a service that would allow people to specify what they want and ask retailers to bid for their custom. Another service could join up data on health and holiday spending so that a travel company could check and plan vaccination and prescription needs for people. Or customers could agree to let their energy companies track their mobile phone location data so that heat levels could be adjusted automatically when people are away from home unexpectedly.

“Will the emerging personal data ecosystem make people less likely to simply give away their information to research firms?”

So what does this mean for market research? One can imagine a scenario where individuals, sitting atop a rich source of personal data, may choose to release some of this to a research company as, say, part of a study into energy usage. Having very accurate and granular information on energy usage to accompany a survey on attitudes and intentions could be hugely beneficial for a research programme.

But will this emerging personal data ecosystem make people less likely to simply give away their information to research firms? As we start to curate data about our lives and use services which leverage the value of that data, the balance of power subtlety shifts to the individual, triggering a move from customer relationship management to vendor relationship management. The term for this shift, coined by academic and commentator Doc Searls, is the Intention Economy. If we are to give away details about ourselves that assist brands then what tangible benefits are we going to see in return? The nature of the value exchange shifts, with consumers left wondering: “What’s in it for me?”.

Surely we already see this in the research industry, with our declining response rates. Respondents want a better understanding of how they will benefit from donating their time and information. Of course, the industry has done a lot to address this, with better engagement, incentivisation, gamification of surveys and so on. But in an era where the balance of power shifts further to the respondent, will these be enough or will the research industry need to start exploring entirely new business models to address the changing nature of the value exchange?

Ways forward
An example of the kinds of new business models that may emerge is provided by Noddle. This is a credit report service offered by Callcredit, which allows consumers to have access to their full credit report, free for life. Noddle then enables consumers to use their credit report to guide searches for new products and services by requesting a ‘confidence rating’ that relates to whether an application for credit is likely to be accepted. Consumers assess the most suitable deal for them – from loan applications to purchasing credit cards – before the sales process begins. Having this information upfront saves a huge amount of time and helps to improve the overall decision.

“There is a role emerging for a new type of company which facilitates the value exchange between brands and consumers”

This service effectively provides a currency, which authenticates some key information about the person, which is then used to enhance their engagement with brands. A different but related example is the Cheap Energy Club run by MoneySavingExpert.com. Here people can enter details about their energy usage and their current tariffs, and they are then asked about the level of savings they would like to make in order to consider switching energy suppliers. Every month the service undertakes a search on the consumer’s behalf to identify tariffs that can help people save money. Again, information is provided upfront by the individual which is then used to shape the nature of the engagement with brands.

The lessons from these examples is that there is a role emerging for a new type of company which facilitates the value exchange between brands and consumers. Surely this was the original intention of market research – being the representative of the consumer so that businesses could shape their products and services to best meet consumer needs. While the intention has not changed, the environment has. Consumers have become more cynical and now, perhaps, they consider the function of market research to be more about helping businesses sell to them rather than being their champion.

New plan of action
However, there are already a couple of interesting examples of the ways the industry could adapt to the Intention Economy. Consider VisualDNA and nFluence. These companies ask participants to complete personality tests and lifestyle surveys. The information is then analysed to generate new perspectives on that data, such as typologies that brands can understand and work with. This provides the participants with a better understanding of their own personality, buying habits, preferences and desires, which they may not have been conscious of or able to articulate succinctly. Importantly, it then helps them to negotiate their relationships with brands so that online publishers and advertisers can direct more relevant materials to them.

“It’s perhaps not that difficult to imagine services where a research agency provides a currency to negotiate engagement with brands”

It’s perhaps not that difficult to imagine other services along these lines. Couples expecting their first child, for instance, could receive a ‘research audit’ to scrutinise their personal data, combining it with a survey about their purchasing attitudes and intentions. The research company can add value to this data, combining it in interesting and innovative ways to derive unique insights. The sophisticated online ‘token’ that the couple then receive could be used to provide nuanced information to brands about what they should or shouldn’t be offering the couple.

But where’s the remuneration? As with Noddle, the brand that makes the sale provides a commission to the agency that generated the ‘token’.

These are clearly controversial ideas but the Intention Economy is coming – and it’s at the heart of the fundamental question of the value exchange. If we accept that this shift will increasingly impact the relationship between brands and consumers, then we need to start asking: What role does market research have in this?

Colin Strong is managing director of GfK’s technology division in the UK