Mo' Data, Mo' Problems

Big data is a big topic these days, with companies aggregating consumer data and contracting with third-party marketers to mine it.  However, an unforeseen problem arises around unclear data ownership. This is a problem because companies are packaging your data and selling it.

Take the following case — a client was looking to have a marketing company take its point-of-sale (POS) data to prepare email campaigns. Upon closer review of the contracts, data ownership was ambiguously defined and nested in three separate areas: the Master Services Agreement (MSA), SOW, and an addendum. When you trace the definition through the various documents, the only thing made clear on data ownership was that the campaigns resulting from the ETL (extract, transform, load) process were owned by the client. What about the POS data that was sent over to the marketing services company? 

In a conversation with a data expert at a retail-focused marketing services company, they package your POS information and sell it to other buyers, thus creating an additional revenue stream. Disturbingly, clients are unaware this is happening and don't share in any of the profits.

Here's what to do to mitigate the issue:

  1. Ask the company if it is packaging up your data and selling it. If it is, is there an opportunity for your company to collaborate? What's your company's internal position on this? Identifying intent and understanding your options will help you define the data protection or partnership language you want to think about before contract negotiations begin.
  2. Establish your company’s data protection position on your intention. Some data will be sensitive and will need protection rights built into the contract.  Some data may not be as sensitive and partnering with a marketing services firm may be mutually beneficial. Categorizing your data and establishing your ownership position will lessen the confusion around how to craft appropriate language in the contracts as you prepare for the negotiations.
  3. Identify data definition language and how it’s defined in the contracts. This may be nested in several contracts. Areas where data definition may exist would be in the definitions section of an MSA, in the SOW, an addendum, and/or amendment. Data (and clients’ ownership of it) may also be defined after the ETL process. If data ownership claims are defined after the ETL process and not before . . .
  4. Clearly define who owns the data (and who does NOT own the data). Companies can define this into 3 categories. Data ownership before, during, and after the ETL process. One example of protecting your data could be through definition in an MSA — data type, sources from which the data comes from (especially if you're working with several vendors), frequency, a declaration of what rights you and/or the vendor has at all points in the ETL process, if any, and language that ties this to termination rights.

In what ways have you impacted your company’s big data plans? I would love to hear from sourcing professionals on your experiences. Please contact me at cvillanueva@forrester.com.