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If someone wanted to bid on your personal data, how much would you auction it off for? At frog, we are seeing lots of business models that depend on analyzing data trails (also known as “digital exhaust”) left by all of us as we navigate our way through the connected world. What we want to know is, how much is each piece of information actually worth.
Of course just asking people outright won’t offer much insight— after all, if I asked you, “How much money would you want for your Social Security number?” or, “What can I give you for your Web browsing history?” you would rightly be suspicious. Even if I managed to convince you that I was doing some legitimate research and you wanted to help me, you would likely have trouble giving me an answer. So, to get the answers we needed, we decided to conduct an experiment. People were offered the choice of two services, like Web mail, that were free, but one service collected some personal data and the other didn’t. In each case, almost all the respondents rationally chose the free service with no data collection. Next we offered them the same two services, but the service that didn’t collect data had a small fee associated with it, ranging from 50 cents to $20 a month. By tracking how people changed their mind as the price of the service changed, we determined what people thought their data was really worth. In effect, we asked people to “put their money where their mouth is.”
The following chart depicts the price at which 50 percent of people would pay to protect a given piece of data.
The three tiers of value
There seems to be three tiers of data that people are inclined to protect and think are valuable.
The top tier includes social security and credit information. No surprises here—we’re trained to guard this data, and most Web service providers wouldn’t have a legitimate reason to ask for social security numbers or credit card information (we could not get 50 percent of users to give us their social security number within the $20/month bounds of our experiment, so in fact the value is more than $240). We would suspect nefarious purposes!
The middle tier contains digital communication history such as instant message or chat sessions, Web browsing history, real-time location information and health information. We can think of this as true “digital exhaust.” This is not information we purposefully create. Rather, it’s information that’s generated by our actions and interactions. The thought that people want to make use of this information makes American consumers a bit cautious—we instinctively feel that communication should be private and, perhaps, we are a tad ashamed to make it all public. There may also...