Thinking of Data as an Anti-Rival

What Are Anti-Rival Goods?

Last week I had the pleasure of speaking with Pekka Nikander, Professor of Practise, Aalto University in preparation for our MyData presentation in December 2020. Pekka and his team have been researching why conventional markets for trading in data have failed due to data being an ‘Anti-Rival Good”. Watch this 5 minute video introduction to the concept.

What About Personal Data?

The web has evolved since inception into a plethora of consumer services largely available for free. Think search, email, social media, news content, and video – where the costs of providing these services is paid for by running advertising. A sophisticated Adtech industry has been a driver of innovation and growth for businesses providing online services, allowing consumers to gain access to valuable content and indispensable services for zero financial cost.

The cost to consumers has been largely hidden, in the collection and trade in personal data between companies collecting the data and creating individual profiles based on click histories and other data available on the open market. The more the personal data is collected and processed, the greater its total value in capturing consumers’ attention. However, this from a consumer perspective results in increasing noise, yet the amount spent by consumers on goods remains relatively constant.

This has resulted in the advertising driven web that presents consumers with a huge amount of advertising noise as they consume free web content and services. Marketers are spending more money trying to acquire and convert customers for the same value of goods sold. The AdTech industry has created a new inefficiency, except for itself.

This is now explained by the Anti-Rival model presented by Professor Nikander’s team.

Something Needs to Change, But What?

If consumers paid for content and services on the web, then ad’s would not be a requirement to produce, target and sell high quality content and services. But I would argue that neither advertising nor personalization are bad. Advertising can be informative, enjoyable and relevant. Personalization is a matter of convenience and welcomed in many situations.

Yet the downsides of today’s advertising model is declining efficiency for marketers and increasing noise for consumers. The bi-product of the personal data industry happens to be personal privacy and security risk.

The trade in personal data and the creation of the advertising profiles that are being used intrusively needs to change, but can we continue to target advertising and create convenient personalized content at the same time? Is there an alternative intermediary model that will allow merchants and consumers to connect, and that will allow consumers to access reasonably priced content?

If zero-party data were available and we had to begin building AdTech again, what would we do?