Transcription
Our personal data is so valuable that it's considered the new oil of the 21st century, fueling billions of dollars to big tech companies while, at the same time, carrying enough power to influence elections around the world. But this is your data we're talking about here; it's being collected whether you knowingly consent to it or not, and it's being monetized, traded, and used for nefarious purposes that go way beyond innocent marketing and advertising. By the way, you have absolutely no control over how your personal data gets used or whether it will eventually be used against you.
Because of how your personal data is being harvested and aggregated, it can be incredibly difficult to appraise; estimates could range from hundreds of dollars to literally hundreds of billions. But regardless of the valuation, shouldn't you get a cut? I mean, this is your data after all. Join my live stream on the value of your personal data this Friday at 2 p.m. Eastern Standard Time. But in the meantime, watch this video for a breakdown on how much your personal data is really worth.
Today on Governing Goliath, the 21st century has a verified oil boom, and it's called big data. Big tech companies have reached trillion-dollar valuations by harvesting it and selling it in the form of micro-targeted advertising. I have a video that takes a deeper dive into the subject here, but the long and short of it is: while micro-targeting can be used to present more relevant advertisements to you, it can also be used for nefarious purposes, like to gradually alter your beliefs and behaviors. It's really interesting stuff, and you should totally watch that video after watching this one.
Look, making money off advertising is nothing new. In fact, in America, you could say it's ingrained in our culture. If there were a patron saint of advertising, it'd be this guy—that's right, Benjamin Franklin. He's actually credited with, among being a founding father to our country, also owning the first magazine ever to sell advertising. With the launch of his General Magazine in 1741, Franklin brought in extra revenue by persuading retailers to advertise their goods and services in it. He would place those ads in prominent places and charge different prices based on the ads' size and location.
Over the next 150 years, print advertising completely skyrocketed, and it didn't take long for advertisers to realize that they needed to better target their ads to specific markets in order for them to be more successful. And this is how targeted marketing, as we know it, was born. By the time radio advertising entered the mix, it didn't take long at all for radio ad spend to overtake print ad spend. Then, of course, with the introduction of television ads in 1942, that meant there was even more opportunity for brands to reach targeted audiences. And a lot of this targeting was just exercising common sense; it doesn't take a rocket scientist to understand that you shouldn't air muscle car commercials in the middle of a soap opera episode.
Until the advent of internet-based advertising, TV represented the best opportunity for targeting large swaths of the population with relatively high-precision ads. But TV advertising was, and still is, incredibly expensive compared with internet advertising. Internet advertising can be cheaply executed and with surgical precision, so all of a sudden, small businesses and relatively unsophisticated political campaigns could harness the power of analytics to compete with much larger brands. And there's no way this could happen without Google and Facebook finding ever more intrusive ways to harvest and aggregate your personal data.
So let's get back to the question at hand: How much is your data really worth? Well, it turns out that's actually a very tricky question because we first have to define how much is your data worth to who or whom. The reality is we willingly give away our information for free, and we do this in exchange for convenience and information. But quoting some smart guy on the internet, if you're not paying for it, that means you are the product.
According to this MIT study, researchers consistently found that the average Facebook user would have to be paid more than one thousand dollars to deactivate their Facebook account for just one year. This means we value what Facebook gives us more than the personal information we give it. Meanwhile, according to this research by futuremajority.org, big tech companies are expected to make almost 100 billion dollars in revenue by the end of 2020 and almost double that by 2022. So, in theory, your personal information, in aggregate at least, could be worth hundreds of billions of dollars. I mean, these are incredible projections here, but you should know it's not just big tech that's getting rich off selling your personal data.
Credit card companies are making money off of you too, and I don't just mean by charging you those high interest rates. See, when you got that credit card, you also agreed to let these card brands sell your personal information. As a result, Mastercard and American Express are projected to make 2.4 billion dollars this year selling data related to your credit card purchases. And I want you to be honest: I bet you didn't even realize that they were doing this, did you?
Okay, here's another shocker for you: A company you've probably never heard of named IQVIA makes billions off selling your healthcare data, which, by the way, is supposed to be anonymized in accordance with HIPAA regulations. But according to this article by The Guardian, you can be re-identified with the skill of a first-year data science student.
So how much is your data worth to you? It's worthless; it holds no value because we've grown complacent to giving away our personal information—the very same information that then gets aggregated and manipulated to gradually alter our beliefs and behaviors—worthless to us. How much is our data worth to big tech firms, credit card companies, and healthcare organizations? Well, that answer is hundreds of billions of dollars. The gathering, analysis, and sale of people's personal information is a very big business—big enough that if each of us got a 50/50 revenue split off the revenue that's generated from the personal data that we create, every American connected to the internet right now would get $183 in 2020, and we get a raise up to $308 by the end of 2022.
Alternatively, instead of paying us a few hundred bucks every year, this money could stay in a pot that's used for communal services like infrastructure, healthcare coverage, or hey, how about even to reduce the country's insane $3 trillion dollar budget deficit? If our personal data is being taken from us and monetized whether we like it or not, shouldn't we expect more in return than just better targeted advertisements in this digital age that our data fuels? By the way, don't we deserve more than that? Leave your thoughts below, or better yet, join my live stream on the value of your personal data this Friday at 2 p.m. Eastern Standard Time. Hit that subscribe button in the meantime to stay up to date on my latest videos; I upload fresh episodes every Tuesday and I live stream about those topics on every Friday. Thanks for watching, and I will see you again soon.