A Toronto-based ad-technology entrepreneur is rolling out a novel response to 2018’s grand struggle for data privacy: a platform that pays consumers to share their information.
Freckle IOT Inc., which helps brands assess the effectiveness of the components of ad campaigns so they can more effectively target future spending, is launching the new app for Apple and Google Android phones on Tuesday. Called Killi, the blockchain-based app acts as a hub where people who want to make money from their personal data can allow companies that partner with Freckle to use it to design and assess advertising campaigns. In return, the customers receive direct payments from the businesses into a PayPal or Amazon account. There are plans for a charity-donation option in the coming weeks, too.
Much of the digital economy is built on monetizing personal information for targeted advertising. But questions were raised about the ethics of data collection this year after Facebook became embroiled in a data-misuse scandal with the political consulting firm Cambridge Analytica, and as Europe introduced sweeping consumer-data protections in its General Data Protection Regulation (GDPR), which came into force last month.
The GDPR requires companies with operations in the European Union – and businesses that work with them – to adapt their privacy policies to conform to its rules, which include a requirement that companies get informed consent from consumers to use and process their data.
Neil Sweeney, founder of Freckle and Killi, said in an interview that he realized about a year ago that GDPR could shift the power balance of advertising’s data collection toward consumers. He had started Freckle in 2014 and sold his previous ad-technology company, Juice Mobile, to Yellow Pages Ltd. for $35-million in 2016.
Freckle does business with about a third of the Fortune 500, Mr. Sweeney said, and measures the effectiveness of advertising channels, from outdoor posters to social ads, using data that include consumers' mobile-device locations. Mr. Sweeney built Killi as a consent-focused extension of that, recognizing that both household debt and the value of personal data keep rising.
“Here’s the consumer drowning in debt, and behind the glass is this honeypot of money derived from their own identity that they can’t use to pay off their own debts,” Mr. Sweeney said.
He faces a tough, if passive, marketplace: Facebook Inc. alone has more than two billion users, most of whom have expressed little stress over how their data are monetized. But Mr. Sweeney suggests that the enthusiasm over more privacy-focused applications such as Snapchat will grow in a GDPR-regulated ecosystem.
Mr. Sweeney’s ramp-up goals are lofty – a million users each month through the rest of 2018, through a mix of marketing and word of mouth – but he believes people are becoming frustrated that large companies are making money from their data while they are not.
“This is a powder keg. There’s no way this is going to last. If you knock on your neighbour’s door and say, ‘I’m Neil, and I’ve been stealing $200 a month from you for 10 years,’ I don’t think you’d get a great reaction.”
Consumers will receive between 10 cents and one dollar each time a brand purchases their data for use, depending on the amount used. About a dozen major brands will participate in the rollout, and as more join in, consumers’ earnings could compound in tandem. Facebook earned an average of US$23.59 per North American user last quarter, which Mr. Sweeney sees as a benchmark for Killi users.
Killi will act only as a middleman, he said; data will be distributed and all transactions will be stored with blockchain technology. Blockchain-stored data are distributed instead of centralized, and Mr. Sweeney hopes this will reduce the risk of information leaks and encourage more widespread use of the technology. Consumers will also have access to a full audit trail of their data to track which brands used it.