How Companies Profit and Use Your Personal Data
In the age of information, data has become the modern gold rush, with companies like Experian, Equifax, and numerous others capitalising on the wealth of personal information individuals generate daily. Your online searches, social media interactions, shopping habits—everything forms a digital footprint eagerly sought after by businesses for myriad purposes, chiefly among them, profit.
The sheer scale of data generated is staggering. According to a report by Forbes, an estimated 2.5 quintillion bytes of data are produced daily, a number that continues to skyrocket with the increasing digitization of our lives. Within this vast trove of information lies the invaluable resource of personal data.
Companies profit from personal data in multifaceted ways. One primary avenue is targeted advertising. Every time you browse the internet, algorithms are at work, analysing your behaviour, preferences, and interests to serve up ads tailored specifically to you. This personalised advertising is not just a convenience; it’s a lucrative industry. Statista reports that digital advertising spending worldwide reached $378 billion in 2021, a figure that is projected to rise significantly in the coming years.
But it’s not just about ads. Industries like insurance heavily rely on data to assess risk and set premiums. For instance, the average value of a motor insurance lead can range from $20 to $200, depending on various factors like the lead’s quality and the potential for conversion. This value, sourced from industry analyses by Insuranks and other market reports, illustrates just how crucial personal data is in shaping the insurance sector’s operations and profitability.
The role of credit, credit bureaus and data brokers
Moreover, financial institutions utilise personal data extensively for credit scoring and lending decisions. Companies like Experian and Equifax, as major credit bureaus, compile and analyse vast amounts of consumer data to generate credit reports. These reports, containing information about an individual’s credit history, payment behaviour, and outstanding debts, play a pivotal role in determining one’s creditworthiness. In turn, this affects access to loans, mortgages, and favourable interest rates. Such data is not only valuable but can significantly impact an individual’s financial opportunities and choices.
Beyond these sectors, data brokers play a pivotal, albeit often lesser-known, role in the data ecosystem. These entities aggregate, package, and sell data to various industries. Acxiom, for instance, is a prominent player in this domain, collecting consumer data from various sources and selling it to businesses for targeted marketing and analytics purposes. These transactions, obscured from public view, highlight the intricate web of data trading underpinning many industries.
However, the utilisation of personal data isn’t limited to commercial purposes alone. Governments and public institutions also leverage data for policy-making, urban planning, and public services. Smart cities, for example, rely on data from sensors and citizen interactions to optimise traffic flow, manage resources efficiently, and enhance overall city functionality.
How is your data protected?
Concerns about data privacy, security, and ethical implications loom large. High-profile data breaches, such as those witnessed at Equifax and other major companies, underscore the vulnerability of personal data and the potential ramifications for individuals when such information falls into the wrong hands.
Efforts to address these concerns have led to regulatory interventions like the GDPR in Europe and similar data protection laws worldwide. These regulations aim to safeguard individuals’ data rights, ensuring transparency, consent, and the right to control and delete personal information.
Through the U-Earn platform we can help you take back control of your data and enable you to get a fair share of any compensation that comes as a result of data trades. Our aim is to increase the awareness of how companies profit and use your personal data across the following 5 themes;