Value of Data, Data Sensitivity and Data Privacy

The document discusses the value of data, data sensitivity, and data privacy implications for customer relationship management. It notes that while an individual's data may only be worth a fraction of a penny, the aggregation of large data sets has high value for targeting consumers. Sensitive data requires special protections and its definition evolves over time. The document outlines seven principles of data privacy including designing for privacy by default, transparency, and keeping the user's interests first.

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Value of Data, Data Sensitivity and Data Privacy

Uploaded by

Sharan Menon

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Download as PPTX, PDF, TXT or read online on Scribd

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Value of Data, Data Sensitivity and

Data Privacy: Implications for CRM

Value of Data
While the multi-billion data broker industry profits from the trade of thousands
of details about individuals, those bits of information are often sold for a
fraction of a penny apiece.

The average person’s data often retails for less than a dollar.

General information about a person, such as their age, gender and location is
worth a mere $0.0005 per person, or $0.50 per 1,000 people. A person who is
shopping for a car, a financial product or a vacation is slightly more valuable to
firms that are eager to pitch those goods.

The data are only as valuable as the value they help create for businesses and
consumers.
Value of Data
The real value in sharing my data with marketers is receiving more relevant offers
and content.
Reputable firms such as Acxiom, evaluate consumer data for commercialization, by
asking questions up front to help understand the path to value and potential
financial opportunity including:
• How was the data originated/sourced?
• Were consumers given appropriate notice of the potential uses of their data and
choice in the matter?
• What permissions and restrictions come with the data that create risk or
opportunity?
• What value-added effort, subject-matter expertise and resources are required to
make the data actionable for its intended uses?
• How will the data be distributed, managed and tracked?
• And most importantly, what are the data-driven applications?
Value of Data
To estimate the value of a data set, three key measures are evaluated.
Coverage – What percent of the marketable population does this data set
cover? Who are we missing and what are the biases?
Quality – How accurate is the data in reflecting reality?
Recency – How current is the data relative to how often it changes? While
the year you were born never changes, your tastes in music or food for
example may evolve significantly over time.
Targeting Application: selecting the right consumers to engage – has the
biggest impact on marketing ROI and therefore provides the largest financial
opportunity across channels for data providers.
Digital targeting is the fastest growth area for consumer data, and is
generating both a lot of interest and new entrants.
Value of Data

CPM: Cost per thousand

The data are only as valuable as the value they help create for businesses and consumers.
Sensitive Data
Defining “sensitive” may seem like a simple one, but in reality it is quite
complex.
For example, Social Security number has always been sensitive because it is
a key piece of data that identity thieves need to steal our identity.
Other examples include financial data, such as bank account and pin
numbers, or health records. This kind of data is typically considered
sensitive because it either aids identity theft or could otherwise embarrass
us if it were disclosed, in the case of our health records.
Some definitions of sensitive data are codified into law. Health, Driver
License, Library records etc.
Sensitive data evolves over time as new types of data are created, usually
through advances in technology. Biometric data and precise location data are
sensitive because it can reveal about what we do and where we spend our
time.
Sensitive Data
Vulnerable Populations: Here the data could be defined as sensitive given
the vulnerable populations.
Children under the age of 13 have special protections because they are a
vulnerable population.
Others include older generation who due to degenerative disorders, like
Alzheimer’s, are unable to avoid being scammed, and hence they could be
considered a vulnerable population.
Extra precautions should be taken when collecting data and marketing to any
of these vulnerable populations. Know the law, and offer appropriate
products and services.

All CRM professionals should be aware of how they are using sensitive data.
Principles of Data Privacy
1. Proactive not Reactive; Preventative not Remedial: The Privacy by Design
(PbD) approach is characterized by proactive rather than reactive measures.
It anticipates and prevents privacy-invasive events before they happen. In
short, Privacy by Design comes before-the-fact, not after.
2. Privacy as the Default Setting: Privacy by Design ensures that personal
data are automatically protected in any given IT system or business practice.
If an individual does nothing, their privacy still remains intact. No action is
required on the part of the individual to protect their privacy – it is built into
the system, by default.
3. Privacy is Embedded into Design: Privacy is embedded into the design and
architecture of IT systems and business practices. It is not bolted on as an
add-on, after the fact. Privacy is integral to the system, without diminishing
functionality.
Data Privacy
4. Full Functionality – Positive-Sum, not Zero-Sum: Privacy by Design seeks to
accommodate all legitimate interests and objectives in a positive-sum “win-win”
manner, not through a zero-sum approach. Privacy by Design avoids the pretense
of false dichotomies, such as privacy vs. security, demonstrating that it is possible
to have both.

5. End-to-End Security – Full Lifecycle Protection: Privacy by Design should extend

to the entire lifecycle of the data involved, from start to finish. This ensures that at
the end of the process, all data are securely destroyed, in a timely fashion.

6. Visibility and Transparency – Keep it Open: Privacy by Design seeks to assure all
stakeholders that whatever the business practice or technology used, it is in fact,
operating according to the stated promises and objectives, subject to independent
verification. Its component parts and operations must remain visible and
transparent, to users and providers alike.
Data Privacy
7. Respect User Privacy – Keep it User-Centric: Above all, Privacy by
Design requires architects and operators to keep the interests of the
individual uppermost by offering such measures as strong privacy
defaults, appropriate notice, and empowering user-friendly options.
Keep it user-centric.