26. November 2019Transparency and Networking:
Where there are Major Problems in the Use of User Data

A German woman has almost two children in her life and that, on average, between her mid-twenties to late thirties. From such supposedly unambiguous information, an algorithm would probably deduce that a woman of this age group should receive more advertising for baby articles, especially when this data includes other demographic information about them. But what appears to be a win-win-situation for advertisers and users, on closer inspection, proves to be a fatal mistake. This is because about half of all female academics in Germany are still childless at the age of 35. A corresponding advertising playout is therefore not appropriate for both sides and could even annoy those women.

This scenario exemplifies a much larger problem: the lack of transparency for users: They leave their mark with every search engine query, every scroll through a social media news feed, and every online purchase. However, it is difficult for users to understand exactly what this data is, which service provider it is stored with, and how it is used to shape the customer experience. For example, a user can use cookies to view his or her own data at tracking providers and other companies, but to do so, he or she must first read up on which organizations are tracking them and then request access to the personal data stored, modify it or have it deleted altogether. However, with around 20 cookies, downloaded during a visit to Spiegel for example, this is laborious – and not everyone is aware of the possibilities. The DSGVO and e-Privacy Directive is intended to remedy this situation, but because of annoying consent banners, they provide a worse user experience instead of more transparency.

At the same time, the cross-platform networking of data undertaken by companies is somewhat limited, if it occurs at all. The social networks store the users’ likes, the search engines their search queries and the online shop the product purchases – but this data is not merged. The task is to solve this technical challenge while companies are having to find new approaches for determining and maintaining data sovereignty, because personalized user experiences and perceived tracking are often only separated by a fine line. The key word here is transparency.

The quality of the user data makes the difference

Currently, however, algorithms often act as so-called “black boxes”, i.e. they process user data in secret and are regularly adapted by technical service providers. For both companies and users, this means that they have to follow the trial-and-error principle time and again – which rarely pays off. According to a study conducted by Royal Mail Data Services in 2016, companies lose around six percent of their turnover every year just because of poor user data. 70 percent of the 300 companies surveyed stated that they had incomplete or outdated information.

Decentralized marketplace as a solution

The consolidation of all data and thus a complete personalization of the customer experience could counteract the problems. However, current personalization solutions have rarely gone beyond the beta phase and are also centralized black box systems that do not operate where the user is.
With our Teal Marketplace, we want to resolve this discrepancy between user data sovereignty and marketing quality. It is a decentralized online marketplace based on the blockchain infrastructure, Smart Data and an associative AI. We have invested a lot of time and energy in this product and will deliver a detailed whitepaper in the near future.