The Economist published a report a few months ago stating how data—not oil—has become the world’s most valuable resource. Think about that for a second. Your Google searches, your social media profiles, and even your Amazon purchase history could be worth more now than any other commodity in the world. It explains how Facebook reported more than $26 billion in revenue last year, and why Microsoft recently paid an estimated $26.2 billion to acquire LinkedIn (and therefore all the detailed information for the networking site’s 100+ million users).
User data has become the single most valuable asset in the world, and whether you realize it or not, it has a direct effect on your private life.
How companies use this information
Roughly a few dozen companies control this increasingly comprehensive set of user data (of nearly infinite worth). A recent MIT study found that while companies invest highly in profile data mining, they were more concerned with categorizing it than the actual repercussions. According to the study:
“All the companies we studied were awash in data, and the volume of their stored data was growing on average by 40% per year. We expected this explosion of data would place pressure on management to know which data was most valuable. However, the majority of companies reported they had no formal data valuation policies in place.”
Key takeaways include how the 18 to 24-year-old demographic is the most valuable in the eyes of advertisers. Additionally, significant life milestones, which including buying a house or leasing a new car, can also make your data more lucrative.
Putting a price on your data
While it’s currently impossible to put an exact numerical amount on your online data, some marketers estimate users’ cumulative information could hover somewhere in the hundreds of millions.
That said, the bigger picture here isn’t how much your data is worth; it’s how it’s others use it.
The five highest-earning companies of 2016 were Apple, Alphabet, Microsoft Amazon, and Facebook. It’s no coincidence that all of these companies deal in data. In fact, these five reported a combined profit of $25 billion in the first quarter of 2017. What’s even more shocking is how much experts predict these companies will continue to grow.
Facebook alone netted a $27.64 billion in 2016, nearly a 10 billion increase in year-over-year profit. Even more impressive is the company’s expected growth. Both Amazon and Google are growing at rates that are faster than the industry itself, meaning they’ll soon have a dominant share in how data is not only consumed but also distributed.
Imagine how much info companies like Google and Facebook have on you, or what would happen if this data were to fall into the wrong hands.
Your privacy now has a price tag on it.