What Stays in Vegas (36 page)

Slow Start

Green, Saracevic, Kurspahic, and two others founded
Personal.com
in 2009. For the first two years they designed the site and the software behind it, which encrypts user data and promises never to share it without permission. People can upload personal documents and information such as house and car insurance policies, credit card and frequent flyer numbers, alarm codes, bank accounts, tax records, medications, passports, and other ID details—even clothing sizes and other minutiae of daily life.

By the end of 2013 Green had raised $20 million, including from AOL founder Steve Case, who now leads investment company
Revolution.com
, and Ted Leonsis, the majority owner of several Washington, DC–area professional sports teams. By contrast,
Reputation.com
raised $65 million in capital over several rounds.

In his pitches, Green—whose rimless glasses, trimmed beard, and short hair recall one of the best-known photos of a middle-aged Steve Jobs—stressed that his company would establish a fair market value for personal data. “We believe the average U.S. consumer can earn $1,000 or more annually,” he told potential investors.

His pitch cited car buyers as an example. “Declare your intent to purchase a new car, add relevant criteria to your existing car data and let the world compete for your attention and your business,” his investor prospectus said. Marketers would gain direct access to customers just as they were ready to buy; he cited, as an example, “213,000 consumers with luxury cars whose leases expire in the next 90 days.” Another projected use would enable people to advertise their travel plans and allow marketers to send them discounts ranging from 10 percent
to 30 percent. The company expected to make money by charging a 10 percent commission.

Personal.com
's cofounders, Edin Saracevic, Shane Green, and Tarik Kurspahic (from left), at the firm's Washington, DC, office. Source:
Personal.com
(reprinted with permission).

Personal.com's
initial investment did not translate into many customers after its November 2011 beta launch. Fewer than six thousand people signed up in the initial months, and many who did found it daunting. Those who persevered needed hours to enter all their data and documents, a process as satisfying as sorting bills into an accordion file.

Personal.com
received a fair amount of media coverage, but some of the articles set unreasonable expectations that users would soon be able to cash in on their self-curated personal information. “Unless you have millions and millions of users, no one cares about you—and, in fact, they scoff at you,” Green says. “It hasn't always been easy: there have been some really rough ups and downs.” Part of the problem stemmed from their inability to make users money. “I was more bullish at that time than was warranted about the willingness of partners to work with
us,” Green says in retrospect. “That was a miscalculation on our part. And [we] never ended up launching that side of the business.”

With relatively few users signing up, the
Personal.com
team discussed more than a dozen other ideas to attract more interest. One idea proposed using information from a person's vault to fill out forms when buying airline tickets or prescription eyeglasses, or when registering on e-commerce sites. Green initially resisted, as did his technology guru, Kurspahic. “When you look at cool tech companies and the kind of stuff that they do, this does not sit at the top of the food chain. And from that perspective that wasn't appealing to most of us. We all want to do supercool stuff,” Kurspahic says.

But people who saw demonstrations of the feature really liked it, and
Personal.com
launched “Fill It” in 2013. For the first time, entering all their data into the encrypted vault directly helped users.
Personal.com
started signing agreements with entities such as Geico insurance, schools, and the Department of Education, which placed a copy of users' insurance information or student loan details into the vault. The idea was to get businesses to pay the $30-per-user annual subscription as a service to attract customers. Another company called FileThis connects data from users' bank accounts, credit card statements, phone bills, mutual funds, and other merchants, and places a copy directly into their
Personal.com
vaults. Slowly, the service was coming alive.
⁷
By spring 2014, one hundred thousand users had signed up for
Personal.com
. The company also created a second site,
fillit.com
, to help promote the service, and it continued to map thousands of website forms every week to expand its capabilities.
⁸

Out in California,
Reputation.com
, focusing on its core business, delayed launching its own data vault, with Fertik hoping it would go live later in 2014. Other companies with similar ideas—such as
mydex.org
,
ownyourinfo.com
,
qiy.nl
,
myinfosafedirect.com
, and
datacoup.com
—have not taken the world by storm. In 2014,
datacoup.com
actually started paying people for their data, but it has struggled with the same chicken-and-egg problem that has vexed others.
Datacoup.com
offered as much as $8 a month to users, but on average paid just $1.56 in February 2014 as it sought to find buyers for the data.
⁹

Selling other people's data with or without their knowledge remains far more profitable than protecting and selling data on behalf of consumers, at least for now. Yet the ideas are intriguing and may continue to evolve into an empowering solution for consumers. In 2014, even Acxiom was talking about the possibility of paying users for their data, especially to know when they were in the market for a car or other big-ticket items, a move that could herald a major transformation of marketing and advertising.
¹⁰
Because it already has hundreds of millions of files on people and many clients, a data broker like Acxiom could overcome the chicken-and-egg dilemma.

Todd Cullen, a former Acxiom vice president for global data products, is convinced the balance of power will ultimately shift to consumers, away from anonymous data brokers and middlemen. He says companies such as
Personal.com
will crawl, walk, and then run, meaning it will take time. “The model today is completely backwards,” says Cullen, now the chief data officer at advertising firm Ogilvy and Mather. “Consumers are beginning to realize data itself has value.”

That's the way it should be. Customers should have the final say in how and with whom they share their data. Privacy tools can help, but they are only part of a solution that protects consumers against possible abuses. Companies have to be open and responsible about what personal data they gather, and government rules may be needed to assure certain intimate data are not abused.

19

Empowerment

Insiders' Mixed Emotions

The harvesting and use of personal data across businesses of all kinds are now a reality, whether we like it or not. That does not mean the public should passively accept every new effort to expand their collection. Customers should know what companies are doing, and should have the final say in how it is shared. With societal boundaries on personal data still largely undefined, the potential for abuse is strong.

Fears that marketers will violate private spheres long predate the Internet. In
The Hidden Persuaders,
Vance Packard wrote, “It is about the way many of us are being influenced and manipulated—far more than we realize—in the patterns of our everyday life. Large-scale efforts are being made, often with impressive success, to channel our unthinking habits, our purchasing decisions, and our thought processes by the use of insights gleaned from psychiatry and the social sciences.”
¹

Later he added, “The most serious offense many of the depth manipulators commit, it seems to me, is that they try to invade the privacy of our minds. It is this right to the privacy in our minds—privacy to be rational or irrational—that I believe we must strive to protect.”
²
Packard wrote those words not about Google, Facebook, or other digital-age corporations. He was writing in 1957 about the growing sophistication of marketing and advertising.

A decade after Packard's book was published, Lester Wunderman, who is often credited with creating the term “direct marketing,” described a future in which companies would gather vast amounts of
personal data to further their marketing strategies. His 1967 speech makes fascinating reading today because much of his vision has long since come to pass:

A computer can know and remember as much marketing detail about 200,000,000 consumers as did the owner of a crossroads general store about his handful of customers. I can know and select such personal details as who prefers strong coffee, imported beer, new fashions, bright colors. Who just bought a home, freezer, camera, automobile. Who has a new baby, is overweight, got married, owns a pet, likes romantic novels, serious reading, listens to Bach or The Beatles . . . Those marketers who ignore the implications of our new individualized information society will be left behind in what may well come to be known as the age of mass production and marketing ignorance.
³

Wunderman, ninety-three years old at the start of 2014, was still working long after his vision became reality in the era of big data. I called him to discuss the current marketing landscape and heard a mixed assessment of how marketers use personal information today. “I get mail that I discard or I get some that offends me, where they are misusing the information that they have. But I think there are always outlaws and the outlaws in the marketing business are obviously those who would misuse data,” he said. “Now we have all these dating sites or people-meeting-other-people sites. And those, I think, would be subject to abuse, where people who feel isolated may, in fact, enter data that could come back at them. . . . In a data-driven world, the potential for abuse may be something we have to spend more time considering than we used to where such information was not available.”
⁴

The potential for abuse makes many marketers cautious about what information they share about themselves. They know from experience both how useful personal data are for their work and how revealing they can be. “I don't know if I want all these websites to know I am visiting them,” said Netta Kivilis, who for a time managed online marketing for Amazon's MYHABIT, a flash fashion sales site. “Most of online marketing is evil. . . . On the flip side, as a marketer, it is super useful.

“I sometimes find myself appalled to see where the line is constantly being moved,” she said. “The line is getting farther and farther away.”
⁵

Changing Norms

As businesses try to move the line, social norms will evolve. In some cases, practices that once appeared invasive or creepy may become accepted. “User expectations change over time, and this decade they have changed more than they probably have in the last century,” says Emanuel Pleitez of people search site Spokeo. “For example, five years ago location data on people and people's behavior—it would have been crazy to think that people would be updating it themselves and putting it out there and sharing it across networks. . . . Now anyone can aggregate Foursquare and all these other location-based—Instagram—and all these other data-aggregating systems,” he says. “Any example you can give me today, in two years can be different in terms of user, consumer expectations.”

In other instances, industry practices will provoke public outcry and government and legal action that may rein in certain practices. Spokeo paid an FTC fine in 2012 related to the marketing of its information for job employment purposes. At that time the site sold especially detailed dossiers that included a person's ethnicity, political affiliation, religion, hobbies, education level, wealth level, and credit estimate as part of a low-cost subscription. Since then Spokeo has decided to eliminate some of these details. “Spokeo deleted certain content from its services in 2012, in order to help stem potential misuse,” cofounder Harrison Tang said.
⁶

The line on what is fair game in personal data can move both ways, even if the overall trend is in the direction of more data gathering. Mary Culnan, a senior fellow at the Future of Privacy Forum and a professor emeritus at Bentley University, has been working on consumer privacy and marketing since the 1990s, when mailing lists and database marketing were the big concern. “Every time I think I have seen it all, something new comes along. There is a big flap about the latest new thing, and then people get used to it (or maybe never really
knew about it), and life goes on,” she says. “Sort of like the frog in the pot of cold water and you turn on the stove and the frog eventually boils to death as the water heats up slowly. The information collection proceeds the same way.”