Friday, 28 September 2007

Data Protection: Time for Change?

As a company receiving information about a user of a service there are strict regulations concerning the use of personal data. You are able to use such data in an anonymised way when promoting to users but cannot use data at a personal level to direct a specific promotion to them and in particular cannot share that information with others.

This is to protect the individual from any abuse from advertisers and other parties.

The world is changing though. Our conceptions of what is private information are changing. The younger generation are re-defining the rules as to what is acceptable in this arena and I feel that data protection legislation will be revolutionised in the next five years from an area which sets the boundaries fiercely as to what can and cannot be used and is always seeking to restrict and protect; to an area which is exploring the boundaries of what people want and are prepared to accept.

I am of a generation that is queasy about privacy. I read the press and the images painted that Google, Microsoft and other internet giants know a lot about us. It does lurk at the back of my mind. Creating a facebook profile was a torture for me, it consistently asked me to disclose things openly that I would only offer up to friends.

For the younger generation, there is not this barrier. The internet is full of friends you have not met yet and the youthful are quite prepared to offer up all information in order to find them.

With micro blogging services such as Jaiku and Twitter, users constantly feed each other their activities and presence. Social events can be organised in facebook with people you have not met yet but with whom you already know you share a passion. An email from a five year old relative carries the signature - I like Frogs and Books - already outreaching to people who might like the same.

Press scaremongering around paedophiles in chatrooms or the proliferation of adult content really does do the internet a disservice. It is rebuilding the communities we know miss in everyday life. The youthful community wants to share, embrace, reach out to people of similar interests and if you have something to offer that group which would enrich their lives - then you should feel free to promote it.

Here is manna from heaven for an advertiser. People are willing to give you the information you need to be able to target the people that are most likely to be interested in your product. You can also avoid those that you know are going to take against it or be ambivalent about it.

Data protection should embrace this concept, after all advertising is now the recognised means by which most new media services are offered for free. Protection should be focused on controlling abuse of this trust, but even here the community has shown that when a brand acts irresponsibly it is very capable of defending itself and leaving a very deep bruise. Google 'chevrolet tahoe' for an example of this.

For the first time in a long time, I would dare to say that a Data Protection Lawyer would be a fun thing to be.

Wednesday, 19 September 2007

Apple wins; consumer loses; O2 ?

There is a lot of commentary around the iPhone in the UK of course after the O2 announcement yesterday. The carrier had long been out as the worst kept secret in a while but the package has caused a stir.

To be honest I am a little surprised that O2 got the deal: it has the worst mobile data tariffs in the market (though Ewan here gives an insight into what is coming), it has the highest prepay base to whom it has never allowed access to the open internet and has already murdered one i-brand in the UK having recently shut down i-mode. These are quite compelling arguments for the prosecution case.

To its credit, O2 has always been the best marketer of services in the market when given a particular proposition to work with (e.g. messaging, music) and I am sure this played well in discussions with Apple.

What I am absolutely convinced of though is that the defining factor in the Apple discussions was not the maturity of the marketing, nor the pricing of data, nor necessarily brand fit nor customer fit but: just money.

Peter Erskine admitted in a Press Conference that there is revenue share back to Apple from the deal though it was ambiguous as to whether this was the service revenue or the handset revenue. If on the service revenue, it is arguably an industry first, though one could imagine it being packaged as a license fee for the software on the device such as that HTC pays to Microsoft for example which is less revolutionary.

The biggest stir in the press has been on the cost of the package with commentary on the £35 per month for 18 months together with the £269 purchase price adding up to £1000 over that period (a bit of poetic license in the tabloid maths there).

That's not the real scandal however. Dig a little deeper.

Apple has held the operators to ransom over being first to market with the iPhone - as it is able to do in a market where such a device might buy 1-1.5% market share in a market where less than that separates the top three. The net result is that it is not O2 that is paying for the Apple revenue share but YOU!

On any of the operators at the moment I can get any device for free on a £35 18 month contract. The £269 you are paying is O2's way of covering the squeeze applied by Apple. That an operator would take a decision which is sub-optimal for the consumer is really no surprise, I am sure however that Apple, the people's champion, will try and distance themselves as much as possible from this link.

As a post-script and a topic for another post: the UK market is completely screwed by the fact that no operator dominates. Even in this case, O2 is not arguably the winner. Forced now to deploy an EDGE network for this purpose and this purpose only is a large price to pay. All the operators should have turned to Apple and said no until a 3G device was available - I would bet that Vodafone did.