Selling Your Company Data - An Exploration of Ethics
Have you been considering selling your company data? Any business with a reasonably sized online and offline audience has the opportunity to profit. Still, the ethics of collecting and selling data needs close consideration.
Is it Okay for Companies to Sell Data?
In countries like the US and the UK, as long as a business informs consumers of its intentions to collect and sell data, it can proceed. Just about anyone (from a tiny sole trader with limited web traffic to a large enterprise with thousands of daily hits) can gather insights from these four categories….
Personal Data: Includes PPI (such as gender), as well as non-personally identifiable information (such as your IP address).
Attitudinal Data: Encompasses metrics on consumer satisfaction, purchase criteria, product desirability and more.
Engagement Data: Details how specific consumers interact with a business’s platforms and marketing materials.
Behavioural Data: Includes transactional details such as purchase histories and product usage information.
Although legal, the process of selling data would feel a lot more ethical if regulators forced businesses to offer an opt-in or opt-out option, similar to third-party cookies.
Since data insights have become an important contributor to decision-making, budget wastage has been cut across the board and the efficiency of marketing/advertising campaigns has improved significantly. Any company with the ability to collect first-party data inevitably ends up with a wealth of information at its fingertips, which many other companies stand to benefit from.
As we move into the year ahead, and third-party data becomes harder to collect following the death of the cookie, we may see a sudden surge in data trading. We believe that few businesses will like the idea of a world where they no longer have access to volumes of detailed consumer insights, with many willing to do anything to stay ahead of the curve.
The Positives and Negatives of Selling Company Data
Other than the questionable ethical standpoint of selling company data, there are a few other drawbacks. However, these are evenly balanced with a number of benefits.
Benefits:
Increased Revenue - According to Medium, the email address of a single internet user can be worth up to £89 to a brand. Imagine the amount of money you could bring in by making a long-term commitment to selling data privately.
Accessibility - When quality data is bought and sold legally on the private marketplace, it reduces the chance of illegal activity. Your internal term will not be forced to turn to seedier alternatives, reducing risk within the workplace
Business Partnerships -Following your decision to sell company data, you’ll unlock the ability to create beneficial agreements between yourself and other brands – ultimately giving your team access to more insights
Drawbacks:
Red Tape -In September 2015, Comcast was charged with over $33 million in settlement money for publically publishing the data of 75,000 consumers. They also paid a $100 compensation to each of the affected individuals (Source: Medium). There’s a lot of red tape involved with selling company data, requiring you to bring on an ethics manager and industry expert
Consumer Trust - Audiences aren’t exactly ecstatic about their data being sold. To date, we’ve never felt truly comfortable with our information being collected for internal company use (where 44% are picky about which cookies they accept) and it’s easy to assume your consumers won’t be happy with their data being sold for profit
Should I Sell My Company Data?
Due to the nuance involved with the ethics of selling company data, the only person who can make that final call is you. It can be a handy way to raise a bit of capital, but it can also be complicated; meaning you’ll soon find yourself navigating complex laws and regulations.
To proceed ethically, you’ll need the approval of your company’s senior leadership team, your stakeholders, and, of course, your customers. This last group will be much harder to persuade, especially considering you can’t offer them anything in return.
Your business will need to put together a concrete data privacy statement, making every effort to protect your audience’s safety. We recommend contracting an expert to write this or even bringing on a full-time employee who can commit to the promises you make.
As long as you weigh the negatives against the positives and make a decision that’s true to your brand and its values, you can make the best choice for your company.
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