20 December 2012

Kenya: Transparent Use of Consumer Data Can Grow Market


I recently went upcountry and had a chat with some rural folks about voter registration. I sought to understand why the uptake was slower than anticipated - at least from their point of view.

Someone explained that there was suspicion that the info collected in the process would be shared with other government departments.

Thank fully this was clarified by the electoral body. The consumer concern is however no unfounded. If you have a credit card, a mobile money account, and a super market loyalty card, then its possible for me to map out your transactions and consumption behaviour.

Combining disparate information about the people we sell to, we can relate one piece of information with another. The more sources and the more correlation the clearer a picture we will be able to draw.

The term "Big Data " has been used to refer to this phenomenon. It is mainly driven by consumer use of electronic and mobile data storage and service.

By virtue of these services capturing data on their users the companies obtain detailed information on their customers. According to a paper by Gerd leonhard, the value of the information gathered and how it is used will be so vast as to equate to data becoming the new oil.

Owners of data will be able to address consumers based on inferred or collected data. They will also be able to save huge amounts on marketing costs due to lower wastage levels as they address customers likely or ready to buy.

While consumers often feel spooked at the idea of someone watching their every move, the trend globally is for transparency to underpin the use of data.

Consumers necessarily must know how and what the companies are doing with information they collect about them. Many companies now give free products in exchange of information about consumers.

A car company can for instance provide free service or engine examination in exchange for a data base of the owners of a specific model. The cost benefit of the use of data is thus partially passed on to the consumer.

The collaboration of various holders of data also serves to make it more valuable. A car company that collaborates with an airline or travel agency will build a better picture of the travel needs of its car owners, combine these with data from a petroleum company and a wholesome story may be told about driving and vehicle use.

Social networks will also work to build more information to data users. While such access to information is unlikely to go unregulated, there are already non regulatory structures in existence, these include guidelines by associations that aggregate direct marketing and on-line marketing companies (DMMA and MMA ).

Governments around the world are also building regulatory structures around data collection and usage. The US government's battles with internet companies are famous and this is likely to spread to other parts of the world. Of importance as earlier stated, companies will need transparency in managing this new oil.

Frank is lead consultant FMC and CEO at Mobile agency Sponge EA. Frank.Maina @spongegroup.com


