Magazine article Marketing

This Time It's Personal

Magazine article Marketing

This Time It's Personal

Article excerpt

Two services that enable consumers to profit from their personal data are shaking up the direct marketing sector. David Murphy reports.

The trade in personal data, be it names, addresses, postcodes or email addresses, has grown by stealth. The direct marketing industry has mushroomed over the past 30 years, partly thanks to sales of data and a general ignorance among consumers about the value and, indeed, ownership of their personal contact details.

From the moment people realised that such data was indeed theirs, and that companies did not have a divine right to use it, the direct marketing landscape became a lot tougher for businesses. The rise of opt-out services such as the Mailing Preference Service (MPS) and the Telephone Preference Service (TPS) have gradually and systematically reduced the number of consumers in the prospecting pool for companies engaged in direct marketing.

Despite this, the industry rolls on, and while direct mail volumes have fallen as brands shift activity online, there is a still a huge market in the sale of personal data by players such as Experian, Acxiom, CallCredit and Equifax.

Now, however, a former key figure in what some saw as the aggressive mailing of consumers by financial-services companies, ex-Capital One marketing director Justin Basini, is shaking things up with the launch of a service, Allow, that enables consumers to profit from the release of their personal data to companies.

When consumers sign up to Allow with their name, address and email address, the details are validated and, as a first - and most controversial - step, removed from the big-four data providers' databases. 'We do this to show people that their data is valuable, and to create some scarcity around that asset,' explains Basini. 'We can then increase the value of that asset, and create liquidity in the market.'

Buying intention

For people to make money from their data, they set a buying intention, and agree for this to be released, either to specific brands only, or generally. Allow then asks the consumer a series of questions to qualify the intention. The data is then sold on to brands, with the consumer receiving 70% of the money, and Allow 30%.

Basini refuses to name any clients, but cites the example of a consumer who sets a buying intention of purchasing a mobile phone. In response to the questions, the consumer declares that he wants a smartphone on a contract and will spend up to pounds 50 a month on the tariff. The consumer will earn a few pounds for providing the data. If he subsequently takes out a two-year contract for a smartphone on a pounds 50 tariff, he could earn a one-off payment, of about pounds 60, for the data supplied.

The obvious apparent flaw in this sort of circumstance is that of the self-selecting sample: namely, that the sort of people who sign up for such a service are not the sort of highor even moderate-wealth individuals who many brands are interested in. Basini concedes this could be the case, but says the signs so far are that it is not.

'These things will be proven out,' he says. 'But I can tell you that the 10,000 people currently on the system are representative of the UK population; the only difference is that the skew is slightly younger.'

Basini argues that the point of Allow is more about control than cash 'We are not really a (cashback and voucher site) Quidco; it is all about targeted offers around your intentions. Initially, you will get cash, but we see this evolving into bespoke packages, products designed for you.'

He adds that, far from being responsible for the blanket mailing at Capital One, he halted it. 'When I joined, it was a top-three mailer and top 50 digital marketer in the UK. By the time I left, it was a top-50 mailer, and top-three digital,' says Basini. 'What I saw at Capital One was the start of this mega-trend toward empowering people with knowledge. …

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