It’s common for me to read an article and think there is a huge question needs to be asked that is the biggest part of the story, and that question goes unasked.
It was no exception when I read Brad Stone’s article Apple Edges Into Selling Of App Ads today in The New York Times. The article explained that Apple is now making it easy for application developers to serve up ads through the applications they develop. The message is that this is a way to keep the price of applications low while giving a new source of revenue to the developers. OK, I get that.
The big question that wasn’t asked was who owns the data?
It’s no secret that the holy grail of marketing is to know more about your customer and what will cause them to buy your products and services. That’s the entire business model of Alice.com, that’s why MasterCard has set up the MasterCard Marketplace. At breakneck speed we are getting to the world depicted in the movie We Live In Public, where our data about who we are and what we buy and don’t buy is information we don’t own, but someone does – and it’s worth a lot of money.
The organization that can be the most effective at sitting between the marketer and the consumer, is able to collect all of that information and then sell it back to the marketers – which is HUGE. There isn’t just going to be one company that does this, but given their current position, Apple is in a really good place to be an 800 pound gorilla in this space. But it’s not clear to me that Apple owns the data. AT&T is the only carrier (at the moment) for the iPhone – do they own the data? Do they share it with Apple? Does Apple’s licensing agreement with the end users allow them to sell the data?
To be clear, marketers in most case don’t care about your name, they just want age, gender and ZIP code. People who are getting lathered up about privacy issues here need to switch to decaf and relax.
This data is not only the holy grail of marketing, but it’s going to transform “how” business is done because it’s, for all practical purposes, a net new asset in the world of commerce, and it will change prices which will make things more accessible to people and it will ripple through lots and lots of industries in ways we can’t (or I can’t) yet imagine. It’s the same reason I have said Amazon should buy Netflix – because overnight they get an engine that is great about soliciting customer feedback about what customers like and don’t like, which then makes them much smarter about recommending things (which Amazon is currently cartoonishly bad at – they could be making so much more money and building so much more customer loyalty it’s numbing). My sense is that is what MasterCard is trying to do, my hope is that as they get “smarter” about what we want to buy, they will ask for our input as well. The big thing about Amazon and Marketplace that is different from Netflix is that I will often buy things like gifts for other people, and those kinds of things should be mapped into my preferences profile differently from the things I buy for myself and unless I say it’s a gift they have no way of knowing that.
Anyway – this is a HUGE change in business and I continue to watch it with great interest – still mostly cheering for alice.com.
-Ric
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