If headlines are any indication, data breaches have made off with consumers’ most sensitive bits of information, such as Social Security numbers, credit card info and bank details. Advertisers pay Facebook to display targeted ads, and Facebook shares data (though it maintains it doesn’t sell it). On and on it goes — and it seems, to the casual (or even sharp-eyed) observer, that there’s no shortage of companies busily tracking everything a consumer does, sees and buys.
At times, lots of people make money off that same deluge of information — that is, except the consumer, said SRAX CEO Chris Miglino. SRAX, formerly known as Social Reality, is a marketing technology company that launched a blockchain-based platform last year (its blockchain identification graph [BIG] technology, called BIGtoken), which seeks to make digital marketing more transparent, putting consumers in charge of what he called “their identity” and making sure they are paid for that data.
In terms of high-level mechanics, compensation itself comes in the form of points, which can eventually be redeemed for cash, gift cards and charitable donations. This compensation, the company said, represents a right to take a slice of the revenues generated across the platform, gleaned from the company’s advertising and marketing customers (think ad agencies, for example).
In an interview with Karen Webster, as part of the PYMNTS Matchmakers series, Miglino said his firm has been in the business of aggregating and selling data for the past decade, and he offered this insight: “The consumer has zero idea about how much data is being sold about them on a daily basis, and how much data is being aggregated against them. If they knew, they wouldn’t put up with it,” he said. “Everything is being tracked.”
The long-term solution, he noted, is that the consumer owns their information, and decides who can get access to it and when — by using a toolkit from SRAX that aggregates permissioned data from all those consumers, and brokers payment from advertisers that want to reach them.
SRAX said late last month that it has integrated mobile banking applications from several banks in the United States — including Citibank and Bank of America, among others — that will link accounts to BIGtoken, billed as the exchange for verified consumer data. Users can opt to share actions tied to those accounts (i.e., spending done across checking accounts or cards, which merchants are getting the sales and when, etc.) with brands across anonymized advertising that targets consumers across different parameters.
New Model (As Yet Untested)
If the SRAX model were to prove successful (and, as with all new platform endeavors, there’s a big “if” in the shadows), it would represent a sea change from the way we interact with the digital world in everyday life.
As Webster noted, the parameters, the give and take, and the expectations of people’s interactions with platform economies are fairly well-defined. We are, after all, 30 years into the World Wide Web.
Customers know their data is being used to advertise to them — and, in return for offering the data that creates ad campaigns, they get virtually unfettered access to the services that keep life humming along, like search engines, messaging services, low-cost or free apps, and streaming content. Name it, and it’s funded —at least, in part — by some revelation of who one is and what they like. Conversely, SRAX is asking users to link bank accounts to a relatively untested platform in exchange for defined payments for their data.
In reference to what might be the most readily recognized issues of data (and bank accounts), SRAX has maintained that the data is encrypted and that personal data is not shared with the other “side” of the platform, comprised of the brands that want to market to users. The CEO told Webster that consumers can choose to opt out of data sales, and even delete data piecemeal or altogether. The data is sold, according to Miglino, in segments — defined, for example, in terms of location, income or even whether shopping is done at a particular retailer.
The crucial difference is that — where the consumer once might have been unaware that such useful information was being pulled into such well-defined buckets of data that have always proved useful to advertisers — individuals are now, with conscious data ownership, stating that “you have the explicit right to market to me, and here’s all my validated information. I’m validating this information by connecting my bank accounts. So, now you can see where I’m shopping [and] what my income is, if I validate it on the platform … my information that I’m providing is much more valuable than any predictive modeling.”
The blockchain piece of the equation, Miglino said, validates that an advertiser is buying access to data. Consumers know how data is used, and advertisers benefit by using verified data for targeting purposes.
As for the conventional wisdom that a successful data management platform needs millions of segments (and, thus, millions of users) to reach critical mass that would be valuable to brands, he said, “this is not necessarily true. You just need a good set of good data.” He pointed to the fact that SRAX sold its SRAXmd healthcare business, which had data on a few hundred thousand healthcare practitioners, for more than $52 million last year.
“You, as a consumer, have a right to your data,” he told Webster, “and you should be compensated for that right. Inevitably, within the next three to five years, every consumer will own all of their information and get compensation for that information. We are providing a tool that will allow that to happen.”