The Price of Privacy

How much is your data worth and is it that bad to share it? See for yourself

Is privacy priceless? In terms of value for an individual, perhaps one can say that. But in terms of being beyond monetary measure, the answer is no.

The price, however, depends on your demographic and where you are, which indicates deep differences in the valuation of various forms of privacy accorded by different regions or cultures.

At the beginning of 2020, the Technology Policy Institute (TPI) published the study – How Much is Privacy Worth Around the World and Across Platforms.

Let’s take a deeper look.

One price does not fit all consumers or all forms of privacy

One of its key findings was the fact that the value placed on privacy can differ widely. It also noted, as did the Consumers & Data Privacy Perceptions report released on August 21st that focused on the United States, that older individuals tend to value privacy more highly than younger people do.

The differences in valuations of privacy are likely rooted in expectations reinforced by both experience and culture. That’s why it is understandable that people who grew up at a time when a phone was used just to make calls and computers were used to perform a command, are less accepting of such tools being used to track them.

Also it is not surprising that Europeans expect privacy protection as the norm under the regulations in place under GDPR (and so would demand a higher price to give it up.) In contrast, consumers in the United States have only recently begun to demand similar protection that has first been enacted in California under CCPA.

Accordingly, Germans place a much higher dollar value on their data used by Facebook in comparison to others. German Facebook users would want the social media platform to pay them about $8 per month for sharing their contact information. The price drops by more than half in the United States where the valuation is a mere $3.50. But that is still higher than the rates that would be demanded in Latin American countries, which range from $2.30 a month in Mexico to as low as $0.52 a month in Colombia.

The way that was ascertained, this study explains, is by determining “measure values for a range of data privacy types, including personal information on: finances, biometrics, location, networks, communications, and web browsing” through four different surveys that were sent out to the United States, Mexico, Brazil, Colombia, Argentina, and Germany.

Data deals and targeted ads

The general consensus across all regions was that people valued privacy most highly with respect to financial information, their biometrics, and their texts. The study was able to determine that the price users would want to be paid by a platform for access to their data is as follows: “$8.44/month to share a bank balance, $7.56/month to share fingerprint information, $6.05/month to read an individual’s texts, and $5.80/month to share information on cash withdrawals.”

However, the data on their comings and goings was priced at just $1.82 a month. The price drops all the way to zero for receiving ads via SMS. Perhaps that’s related to the fact that people don’t seem to mind targeted ads, which was common to all regions. Consumers in Colombia are even willing to pay to get them at the rate of $2.50 a month.

There was a similar finding in the Consumers & Data Privacy Perceptions report released on August 21st, that focused on the United States. A majority of 58% reported that they accepted that their data be used to personalize experiences and products. They also generally did not object to sharing their location data. Just over a third said they are comfortable sharing location data, and another 27% said they are indifferent.

Measuring value for consumers derived from data sharing

The TPI study offers a way to calculate value for the consumer with this approach: Say that consumers in the U.S. would sell their location data for $1.20 a month. They don’t have to get that amount in actual payments. They can consider the benefit of accurate real time driving directions on their smartphones to be worth a certain dollar amount as well: “The net benefits of requiring smartphones to keep location data private would, therefore, be $1.20 minus however much people value high-quality directions on their phones.”

The study points out that this holds true for any benefit that is enhanced by the consumer data. Certainly, we can say it holds for the value that consumers have come to see in receiving more targeted ads.

What this means for marketers

What can be inferred from this approach to data value and the fact that both studies indicate that consumers do recognize the value of targeted messaging is that data for personalization can be its own reward.

While marketers have to be careful to be in compliance of whatever privacy regulation is in effect in their customers’ region, they also have to provide a value proposition that makes it clear to the consumer that they are also benefiting from sharing their information.

That’s why it’s important to deliver the personalized type of marketing experience that customers do value with messaging that reflects awareness of what they are about and what they want.