How can users' personal data be monetized?

by reed   Last Updated July 09, 2019 16:04 PM

I haven't found a better community for this question, so hope it's on-topic. I'm trying to understand how websites can profit from the personal data of the users. Everybody knows what they do in general, but the exact details are obscure to me, and probably to most other people as well. So to turn this question to something more appropriate for StackExchange, I'll ask it as if it was about my own website or app. Note that I don't intend to sell anybody's personal data or violate any privacy laws, it's just an example.

Suppose I have a website, or an app, where I can gather a lot of personal data. For example, think of an e-commerce (names, addresses, purchases, etc.) or a web forum (email addresses, interests, ad clicks, etc.). Now suppose I want to profit from this personal data. A large part of the internet seems to work based on such business models, where you get free services in exchange for... what? Nothing but your data. The question is: how do I do it exactly? I can only think of two ways:

  • Sell the data to somebody else. But who is going to buy it? I'm not aware of many companies that do this. Googling "sell personal data" I found Lotame among the first results, and it sounds like they can buy your data. I suppose there are other companies like this that do the same. Insurance companies might be interested in health data, but can I really call them and be like "Hey, I have some data, do you want it?". I guess it doesn't work that way. Corporations like Google or Facebook might actually call them like that, but I suppose that's not going to be a feasible way for smaller websites like your personal e-commerce.
  • Provide a service to advertisers. This probably requires that you have a huge website that is interesting for the advertisers, or a huge platform (like Facebook and Google), otherwise nobody will pay to put ads on your website. But I'm not sure I understand the advantage of having the personal data. You can use personal data to provide tailored services for advertisers, but in the end you could also do the same without using any personal data at all (ads will not be targeted, they will be less effective, but in the end they might still be worth it if they are cheap enough). On second thought targeted ads are probably used to maximize the number of clicks (and therefore money), while non-targeted ads would sit there wasting everybody's time and resources.

So, can anybody tell me more about the possible methods and what exactly they involve?



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