Tuesday, 28 February 2012

Identonomics part 2: Law and enforcement, conflict and confusion

Exploring the economics of online identity

Skip to: [part 1] [part 2] [part 3] [part 4]


In part 1 I explored the concept of personal data as a currency. Personal data has assumed more importance to the online advertising industry in particular than mere audience; data capture has somehow become an essential component in online advertising.

Yet this isn't a fundamental law of the market. There is still value to advertisers in raw audience; after all we still have billboards on the M4.

Online, the market is currently working in the interests of those paying for personal data or data dependent products like advertising; the few handing over cold hard cash.

It's basic economics: the only group making purchasing decisions are advertisers and those who buy personal data, therefore a competitive market will act ultimately in the interests of advertisers, driving up quality of product and driving down price.

But quality of product if today's trend continues will require gathering and sharing even more sensitive data about us, the users of online services.

If the market is to work instead in the interests of the public, the public must start to make their own purchasing decisions. They must chose to use or avoid services based on how their personal data is used and protected.

In many respects personal data is a currency.  It might not be the only currency, we can still choose to pay in pounds or dollars, and in many cases simple participation may be sufficient.

We can build a market which acts in the interests of the end user, but only if users regain control and start to make informed decisions about the currency they hand over.

Law and enforcement, conflict and confusion

Today the public are not in control. They are conflicted and confused.

This is described by some sociologists as cognitive polyphasia: we want privacy but we want the benefits of sharing. We choose to use privacy-invasive services because they bring rewards, despite privacy worries.  And less invasive alternatives seem slow to emerge.

And they're confused by the mechanics of data sharing: what is being shared, with whom, for what purposes; the length of time data is to be retained and who can see or access the data.

So can and should the law play a role in protecting consumers?

Thursday, 23 February 2012

Statement on our PAC president Eric Joyce MP

Eric has shown tremendous insight and interest in the internet and digital policy-making and I was therefore thrilled when Eric last summer agreed to be the president of our Policy Advisory Council.

I have come to know Eric well, having worked with him and Pictfor - the Parliamentary ICT Forum - over the last two years on a variety of legislative areas.

I was shocked to hear news of the alleged assault this morning. Eric has in the past invited me and other Open Digital PAC members to numerous events in the Commons, including drinks in the Strangers' Bar at the centre of last night's incident.

On our numerous meetings I've seen nothing but an honest, hard working and passionate MP who genuinely cares for the issues that interest me, Open Digital and internet users in general.

Importantly, Eric has taken great interest in opening up the workings of Parliament, giving a voice and insight to many interested parties.  He has hosted and attended many internet-themed events inside and outside Parliament, such as a Social Media Governance panel I sat on with Eric during Social Media Week.

Again, the news this morning came out of the blue and the allegations levelled against him are totally out of character for the man I know Eric to be.

It's clear Eric now faces a serious accusation. Above reiterating that Open Digital values Eric's input and commitment to digital policy issues there's little else I want to say or do until the police investigation concludes.

James Firth

CEO, Open Digital Policy Organisation

Tuesday, 7 February 2012

Search neutrality at Pictfor, 6th February: did Google abuse its market position? Should we even care?

Search neutrality broadly describes the subject of skewing search engine results to favour one website or category of websites over another.  The skewing can be done by hand, i.e. maintaining lists of sites to favour or penalise, or by tweaking the algorithms that derive search results.

Discussions tend to fall into three brackets:
  • Should search engines "clean up" results to remove infringing or unlawful content? 
  • How can accountants and business owners quantify and mitigate search engine dependency risks for businesses whose income is highly dependent on the secret ranking algorithms of search providers, algorithms subject to change without notice? 
  • Antitrust and whether search engines abuse their role as gatekeepers in order to promote their own goods and services above rivals, and what if anything can be done about this?
Last night's event at Pictfor in the Grand Committee Room at Parliament focussed on the latter - the potential for market abuse - and heard from Shivaun Raff, co-founder and CEO of Foundem, a British vertical search engine (categorised search - a type of price comparison site for any product), security consultant and blogger Alec Muffett and internet veteran entrepreneur Mark Margaretten.

Monday, 6 February 2012

Policing and social media, the Surrey Police App, Digital Surrey 25th January

Below are the videos from January's Digital Surrey, which Open Digital sponsored with the help and support of Surrey Enterprise and the University of Surrey.

Surrey Police have created a mobile phone app to help with neighbourhood policing.  I won't take anything away from Chief Superintendent Gavin Stephens, (@CCuptStephens) and developer Angus Fox (@nuxnix), you can hear them describe the project themselves and answer questions in the videos below.

Thanks very much also to the team at thebluedoor for help with organising and London Corporate Media for kindly donating the videos.

Surrey Police view

Developer view

Open Digital sponsor's Talk

Thursday, 2 February 2012

Identonomics - the economics of online identity, part 1: personal data is the currency

Skip to: [part 2] [part 3]

Facebook's IPO reveals the value of online audience today. Each registered user is worth on average $4.38 per year in revenue, or $1.18 in profit.  The business is hugely profitable, making $1bn profit from $3.7bn revenue.

483m people use Facebook every day, and we know from previous data released that Facebook gets around 100 billion hits a day.  Together these stats give a very rough idea of the very low revenue per page impression and per daily unique user it receives. Around 2 cents revenue per active user per day; or, about a dollar from every 10,000 hits.

It's worth noting that not one cent of this income comes from Facebook's core users. Its services are free at the point of access.

But its users are paying in one way or another. EU Commissioner Viviane Reding said in a speech last Wednesday (25th January, video here):
“Personal data is the currency of today’s digital market”
On one hand, Reding is wrong; for ad-funded services free at the point of access, the value is in the audience and participation is the currency.

But on the other hand she's spot on, as our "spending decisions" when choosing how to use free online services must be based on how much we are prepared to reveal about ourselves.

Personal data must start to be seen as a currency - if there is to be any hope of market forces conspiring in the public interest rather than the interest of advertisers.