How Much Is Your Personal Data Worth?
It’s no secret that companies are consistently increasing the amount of intel they collect on Internet users in order to target ads effectively, but have you ever wondered what that information is valued at? One user, who’s been unashamedly hiding from advertisers by using blockers, has decided to calculate just how much money giving up his privacy could make him.
Writer and software engineer David Auerbach posted an open letter on Slate on Tuesday addressed to the “Lords of Internet Commerce”—Facebook, LinkedIn and Foursquare. There, he comically creates algorithms that allow him to measure how much these companies should pay him for his work history, popular likes, political views, whereabouts and DNA. Auerbach explains his method, thoroughly and glibly:
I calculated starting bids for each category of my information based on market capitalizations of leading companies who hold that type of information (i) on millions of consumers. I have divided market cap (MC) by the respective company’s number of consumer profiles (P), then applied two multipliers:
1) Desirable demographic multiplier (D): 4x. In the words of Homer Simpson, “I’m a white male, age 18 to 49. Everyone listens to me, no matter how dumb my suggestions are.” And those opinions can be awfully dumb indeed if, thanks to an unprecedented 34 years of growing inequality and wage stagnation, your household income is over double the national average.
2) Psychographic multiplier (1/U): 5x. This information—which encompasses not just my gender, age, and income level but my personal tastes, values, and opinions—is far more specific and accurate than what most companies possess enabling far more unique identification and targeting. To hear your PR reps tell it, psychographic targeting is the key to the next advertising revolution, promising far better click-through rates. A 5x multiplier may seem generous, but to read the hype around psychographics, you get 5x as many click-throughs from even the most minimal demographic information. And remember: The more you buy, the more you know!
Remember: no refunds.
As the icing on top of the big data cake, the writer concludes by offering up his firstborn, claiming “You’ll eventually get all this information from this child anyway, so why shouldn’t I cash in on it now?”
—Posted by Natasha Hakimi