This paper addresses the dimensions of data as a resource in the 21st century. Data - a term that is no longer unknown in today's age. Rather, they seem to be everywhere, data is collected everywhere in our everyday lives. From the supermarket around the corner to banks to doctor's visits, data is collected everywhere. With the help of new information technology, smartphones, wearables such as watches and other sensors, data collection is being given a whole new reach. Data is collected from the user everywhere and at all times. What is happening around us, where are we going, what time of day are we out and about, who or what are we spending our time with, all this is data that is collected in real time and then analysed. The business with this data is also no longer unknown. Big names like Google, Facebook and Amazon are common. To give a clue to the entire idea: Google is said to have about two trillion users a year. Facebook can boast 2.91 billion users in the third quarter of 2021 and Amazon has 548 million active customer accounts so far this year.
Table of Contents
A. Introduction
B. Calculation of value
I. How do you measure the economic value of data?
1. Data as a Product
2. Cost-based approach
3. The value of use
4. Market value approach
II. Intended use and user
III. How to collect Data
IV. What makes personal data so valuable?
1. Facebook
2. Excursive statement question
3. Example: Hanna
4. Development of digital advertising market
C. Conclusion
Objectives and Themes
This work explores the economic valuation of data in the modern digital age, questioning whether data functions as the primary commodity of the 21st century. It examines the methods used to measure data's value, the ways companies harvest personal information, and the consequences of treating human behavior as a marketable asset.
- Theoretical definitions of data and its characteristics as an intangible product.
- Economic approaches to valuing data, including cost-based and market value models.
- Methods of data collection, such as tracking and the use of cookies.
- The role of individual user profiles in targeted advertising.
- Case studies illustrating the far-reaching influence of data analysis on consumer behavior.
Excerpt from the Book
3. Example: Hanna
The following example illustrates how far-reaching or how such a data analysis can be:
Hanna is 34 years old. She has been with Markus since 2013. They both like to visit the bar across the street and often host wine tasting evenings with their friends, in Hanna's flat.
For the past seven weeks, however, Hanna has stopped going to the bar, her online purchases have changed from wine to smoothies, and she uses various search engines to look for safe environments and good day-care centres. In addition, she now stops for three seconds longer than usual when looking at baby photos.
The data processing company concludes that Hanna wants to have a baby or is already pregnant. As a result, she now receives content and advertisements about pregnancy and children. Flat advertisements are also included, since a new addition to the family often entails a "change of scenery".
Summary of Chapters
A. Introduction: This chapter introduces the increasing ubiquity of data collection in daily life and posits data as a vital resource for modern business.
B. Calculation of value: This section investigates different economic frameworks for valuing data and contrasts its unique properties with traditional tangible goods.
I. How do you measure the economic value of data?: This chapter defines data as an intangible product and explores cost, use, and market-based approaches to valuation.
1. Data as a Product: This section distinguishes data from tangible goods, highlighting its non-consumable nature and ability to be duplicated.
2. Cost-based approach: This chapter examines the expenses related to acquiring, holding, and maintaining data sets.
3. The value of use: This section explains how companies generate value by using data to optimize purchasing and improve contract negotiation.
4. Market value approach: This chapter analyzes how market demand for refined versus raw data influences its economic worth.
II. Intended use and user: This section focuses on the motivations of companies and governments in processing data for advertising or social influence.
III. How to collect Data: This chapter details the technical methods of tracking user behavior through apps, cookies, and device sensors.
IV. What makes personal data so valuable?: This section discusses why platforms offer "free" services in exchange for the deep insights gained from user personal data.
1. Facebook: This chapter provides an inventory of tracking capabilities and demonstrates how specific user data is monetized via advertising.
2. Excursive statement question: This section presents a thought experiment to illustrate the massive amount of personal data individuals provide for free.
3. Example: Hanna: This section demonstrates the predictive power of data analysis by showing how minor behavioral changes can reveal private life events.
4. Development of digital advertising market: This chapter provides data on the exponential growth of the digital advertising sector across various categories.
C. Conclusion: The summary concludes that in the current data economy, the user is not the customer, but the product being traded.
Keywords
Data, Digital Economy, Tracking, Intangible Products, Data Valuation, Market Value, Personal Data, Behavioral Profiling, Advertising, Digital Marketing, Data Privacy, User Profiling, Economic Value, Big Data, Data Collection
Frequently Asked Questions
What is the primary focus of this publication?
The work focuses on the economic valuation of data, analyzing how it is measured, collected, and transformed into a profitable resource by modern companies.
What are the main thematic areas covered?
The publication covers data as a product, valuation models, methods of data collection, the ethics of tracking, and the growth of the digital advertising market.
What is the central research question?
The core inquiry is how to determine the economic value of data and whether it truly functions as the "oil" of the 21st century.
Which scientific methods are employed?
The author uses a literature review, comparative analysis of tangible versus intangible goods, and empirical examples to demonstrate the mechanics of the data economy.
What does the main body discuss?
The main body breaks down the economic measurement of data, the technical reality of user tracking, and the practical application of data-driven advertising strategies.
Which keywords best characterize this work?
Key terms include data valuation, digital advertising, user profiling, tracking, intangible products, and the economic value of personal information.
How does the author define the relationship between the user and the platform?
The author concludes that users are not the customers of these free platforms; rather, they are the product, as their behavioral data is being sold to advertisers.
What does the "Hanna" example illustrate?
The case of Hanna illustrates how granular behavioral data can be used to predict significant private life events, such as pregnancy, often before the person has explicitly disclosed them.
- Quote paper
- Anke Wiards (Author), 2021, The economic value of data in the 21st century, Munich, GRIN Verlag, https://www.grin.com/document/1167782
