Information Wants to Be Free, but Local Data Is Currency

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Imagine you’re a business listings publisher with a local search site, app, or service that licenses local business data, as almost all such publishers do, from one or more national data providers. Now imagine you’re getting a steady stream of inputs from business owners and ordinary users who want to share content related to those businesses. That content might include what we might call additive elements, like reviews and photos — material that is not central to the business but that helps enhance the consumer experience while interacting with that business on your site.

Such additive content might be part of the definition of your site as a place to read reviews or post photos. Other content, however, is a constituent part of that business. This includes up-to-date versions of the business name, address, phone number, web address, geographic coordinates, and other key features, sent in directly by users who visit the business or by its owner.

If the data provider from whom the listings were originally licensed makes it possible for the publisher to feed corrections and updates back into the master file, so that the data provider, other publishers, and the local ecosystem in general might benefit, is the publisher under any obligation to do so?

The answer that I’ve heard in person and seen demonstrated time and time again is that the business -listing publisher recognizes no such obligation. Instead, publishers consider as proprietary this local data, even something as basic as the contact information for a business. Local data is part of the value proposition such publishers make to users. If I’ve got better data than the next guy, it’s just one more thing that will set me apart in the marketplace.

Who owns local business information? I got to thinking about this topic after reading about the new report by International Data Corp., which says quite rightly that online data has become a “form of currency.” According to the report, the mass of online data, most of it generated by and about consumers (that is, ordinary people), is due to double in size every year between now and 2020, at which time there will exist 5,200 gigabytes of data for each human in the world.

Big companies are wrestling with one another for control of that data and trying to find better ways of mining its value. In fact, most online consumer data is generated behind the closed walls of one big company or another. Here’s the IDC report‘s assessment:

“A majority of the information in the digital universe, 68% in 2012, is created and consumed by consumers — watching digital TV, interacting with social media, sending camera phone images and videos between devices and around the Internet, and so on. Yet enterprises have liability or responsibility for nearly 80% of the information in the digital universe. They deal with issues of copyright, privacy, and compliance with regulations even when the data zipping through their networks and server farms is created and consumed by consumers.”

The sizable overlap and potential conflict between consumer-generated information and enterprise control are experienced every day on the Internet, with the controversy over Instagram’s revised terms of use providing the most recent example. The world of local search is no different. Though few local search companies could exist without licensed data, once that data gets inside their walls, it becomes a foundation upon which consumer-generated data adds value to a service. Data flows two ways into the search site, “down” from the data provider and “up” from the consumer, but in both cases it’s a one-way street, with the search site capturing the value of consumer and licensed data in combination.

Thus Facebook’s announcement this week of a new local search angle in its mobile Nearby feature is really an announcement of a mash-up: The business data that Facebook licenses from elsewhere, combined with user activity in the form of check-ins and other types of social sharing, becomes a product. In a sense, Facebook has merely created a connection between listings and consumer actions. Practically speaking, though, Facebook owns the relationship between these parts.

I realize I’m making a point that may seem merely academic. And yet I’m reminded of the old Internet dictum that information wants to be free. The phrase is usually taken to mean that the Internet, an open, distributed system with a flattened hierarchy, gives all of us equal access to information and creates a general tendency towards openness and accessibility. This is the dictum that gave rise to Napster and BitTorrent. But there is a very powerful counterforce at work as well, a force that turns information into currency.

Sharing content on Facebook, Google Plus, Yelp, or any other local or social site today is like putting money in the bank. The cash in your account, in practical terms, really belongs to the bank. Sure, you can close that account any time you want, but the bank relies on the basic proposition that most of the time most people won’t. Even more so, your Facebook “likes” and Foursquare check-ins, taking place inside a closed system, don’t belong to you in any meaningful way. What are they worth as currency outside their country of origin?

I’m not saying local or social companies should abandon their core business model, but I certainly am saying that this model does not always serve the best interests of consumers and local businesses. If critical online data were more broadly and freely shared, the overall improvement in data quality would create better online experiences. Even Google, whose iPhone app got 10 million downloads over the weekend, is a closed system, not a public service.

Damian Rollison is VP of product and technology at Universal Business Listing, a company dedicated to promoting online visibility for local businesses. He holds degrees from University of California, Berkeley and the University of Virginia, where he worked at the Institute for Advanced Technology in the Humanities. He can be reached on Twitter.

Damian Rollison is Director of Market Insights at SOCi. SOCi is the leading CoMarketing Cloud for multi-location enterprises. They empower nearly 1,000 brands to automate and scale their marketing efforts across all locations and digital channels.