November 5, 2016

Data Monetisation, do you back Admiral or Facebook?

By Paul Laughlin

data monetisationHeadline news items can have, more frequently in recent years, direct bearing on the world of data & insight. Increasingly including topics like data monetisation.

One such story was the recent news that Facebook (FB) was preventing Admiral insurance (in the UK) from using social media activity data as a means of assessing risk. Admiral planned to enable FB users to not only logon via their FB id, but also opt-in to giving Admiral access to their data, in return for potentially lower car insurance premiums.

Given the higher cost of car insurance for younger drivers, the idea had real appeal.

However, it appears at the last-minute, Facebook has announced that it is not willing to allow such data from its users to be shared with Admiral, citing ‘data privacy’ concerns.

If you missed it, the full BBC news report is here:

Facebook blocks data for discounts deal

Facebook has blocked plans by an insurer to view young drivers’ profiles to help set car insurance premiums. In a planned trial, insurer Admiral wanted new motorists’ permission to look at their posts and likes to judge their safety as a driver. Were a young driver considered to be low-risk, a discount would be offered.

Why should such news matter to customer insight leaders? This dispute gets to the heart of a new battleground, for both service providers and those collecting significant amounts of user provided & user-generated data/content.

The issue at stake

Sadly this appears to be another example of today’s data barons relying on an old-style command & control mindset. To reach the potential for greater data democracy we need to see a move in corporate culture to greater collaboration & transparency.

We may never know the rights & wrongs of Admiral’s negotiations; whether or not they were naive in failing to contractually lock down access to the required APIs. However, Facebook’s behaviour still appears heavy-handed & betrays an arrogance in regard to data ownership that is disappointing. But then perhaps the leopard, who thought it was fair to experiment on its users without permission, has not really changed its spots.

It is an interesting object lesson for other firms aiming to create value from social data & data sharing between businesses.

Customers should own their own data

The core of my concern however comes from a customer perspective. As more & more firms, from Admiral to TripAdviser are looking at data monetisation plans, firms should remember whose data it is. Hiding behind fine words about protecting privacy does not mask where consumers are being denied decision-making power about their own data.

Hopefully truly customer-centric organisations can learn from this bad example. People deserve to be educated about the reality of data monetisation in our changing world. Many applications, with permission, will have the potential to make people’s lives easier or save them money (for the price of their data).

Infantilising customers by deciding what is to be allowed is ‘Nanny State’ thinking. What our industry & society needs instead is clear communication giving people the opportunities & choices of what to allow with their data. I suspect many young drivers would have chosen to share their Facebook data with Admiral in return for cheaper premiums.

Changing mindsets, to think in terms of customers as more active data owners, also happens to be the mindset to adopt in preparing for GDPR.

A controversial issue

However, it has also been interesting to see how this news item has divided opinion.

The active hub that is My Customer, promptly ran an opinion piece on this news item (to which I contributed towards the end of the article). As you’ll see there are strong views on both sides:

Facebook fracas: Were Admiral’s social data plans inappropriate – or innovative?

The news that Facebook has blocked Admiral Insurance from profiling users for insurance discounts and quotes has caused quite a stir, with the story dragging up familiar controversies surrounding customer privacy. Admiral Insurance was planning to utilise personal Facebook data when calculating the cost of car insurance policies for its customers.

I can see the need to raise awareness of social media data being used by other companies. Too many conferences laud the potential of Big Data without an equal emphasis on data protection & permission based marketing. But I’d still come down on the side of giving the customer the choice.

Closing reflections

So, let’s just reflect that this might be an example where the US tech giant is not embracing the free market & the U.K. insurer could be the customer champion. Strange times indeed…

Let us know if there are other news stories that have grabbed your attention, or on which you’d like to know the Customer Insight Leader view.