The Value of Information
Posted by: Scott Kitun, Class of 2012
It is turning out that MSC 525 is turning into a very useful class as it relates to our cultural experience, whether in the business world or personal. We as a class were all assigned an extensive research project and given the platform to explore without any real constraint. The topic my group selected was Data Mining as it relates to Data Marketing. One factor of which is the process of applying a monitory value to information.
Information has always come at a premium, but unlike past valuations, that premium is now calculated in the billions. Recently (as of February 2012) Facebook decided to hold a public stock offering and its subsequent valuation ranges between $75 and $100 billion, depending on what day you ask. But unlike most billion-dollar corporations, Facebook doesn’t possess an inventory of tech gadgets, fast cars, and jewelry. Instead, Facebook’s inventory consists of personal data, 845 million users worth of personal data. According to University of Chicago-Kent Law Professor, Lori Andrews, Facebook made over $3 billion in advertising revenue last year, approximately 85 percent of its total revenue. Yet Facebook’s inventory of data and its revenue from advertising are marginal in comparison to others, such as Google. Google reportedly took in more than ten times as much as Facebook by analyzing what people sent over Gmail, and what they searched on the Web, and then using that data to sell ads. (Works Cited: Andrews, Lori. The New York Times. “Facebook Is Using You”. Feb. 4, 2012.)
Now, if you consider the wealth of information that is available based simply on your Facebook profile and through your Gmail accounts/Google searches, corporations might now more about you than your spouse. From the perspective of the you the consumer, it becomes important that they spend the time to educate themselves on the data mining process. American consumers may not be able to completely control their information and thus thwart unwanted marketing attempts, but they certainly can take back some of the control by limiting what they publish online. Throughout our research, one of the most common trends noted among consumers and online users alike was a lack of seeing the correlation between the information they volunteered and the subsequent data related marketing. Simply put, in many cases, the aggregators do not have to work very hard to collect information on individual consumers, because the consumers are freely donating their personal information via social media and online shopping websites.
Again, for both current and future MSC students, this is a topic we cover that