Image by crazynd via Flickr
News recently that online personal finance application Mint is considering selling anonymized aggregate information. We can see this as a tacit acceptance of the fact that in these trying economic times, free services have no option but to find alternative revenue streams. Zoli commented on this in his post, using the word “hidden” to indicate it was a value proposition somewhat unknown to users.
Lincoln Murphy then took up the baton with a concerned post, pointing out that “hidden” is a somewhat emotive to use in this context as it indicates something covert and underhanded – he gives the example of aggregate credit card data, aggregate financial results and aggregate (and obviously anonymized) health data being “real world” examples of the same sort of data use.
I find the initial concern around Mint’s plants really interesting on a couple of levels. Firstly the fact that anyone could seriously expect a free service to not monetise in some way. Mint makes commissions from financial institutions when users sign up to particular products – this is no different to the real world where so called “independent financial advisors” receive commissions for signing up customers. Let me say it once again – servers and bandwidth cost money, web services can either charge users, or find someone willing to pay for the information they can aggregate – there’s no such thing, as they say, as a free lunch. This post isn’t however a dialogue against free, rather it’s a plea for calmness around aggregated data.
It surprises me that people seem to be concerned around an online property selling aggregate user data – how many of us have the same qualms about the downstream effects of our membership of a loyalty program, a frequent flier program or an investment mailing list. They all monetise in different ways, but at the heart of it they all monetise through direct or indirect aggregate level user information.
The Mint situation is somewhat different from the FreshBooks benchmarking one. Readers will recall that FreshBooks offers customers a “report card” that benchmarks them against other businesses on a number of performance measures. In FreshBooks case it is taking formerly siloed information (invoice details – formerly on a desktop app) and building some aggregate data around it. In the case of Mint however the information was always available to different organisations – Starbucks tracks coffee sales and credit card companies also sell aggregate information abut spending habits – true this situation then does another level of aggregation from that provided to (for example) Starbucks by individual credit card companies – it aggregates spend from all the different service providers (bank accounts, credit cards etc) and presents them to paying customers in a nice way that gives them some meaningful information. However I can’t help but imagine that Starbucks already buys this information from the various banks and aggregates it all internally. Back on Lincoln’s blog some commenter pulled the “civil liberties” card suggesting that; I
being “hidden” by the vendor and gives the consumer of the service the
option not to use it.
couldn’t agree less – you don’t give permission to Starbucks to use
your data everytime you purchase a coffee (yet they do) so why should
software use of aggregate data be any different?