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Who Else is Using Your Customers' Tweets?

Consumers - not to mention legislators - have become increasingly concerned about online and social media privacy.  The commercialization of social media data, however, is not just on the part of marketers - or in the case of Facebook, by these sites on behalf of their advertising clients. Increasingly, social media content is being used in ways that consumers never expected - and is likely to fuel the growing backlash. Consider Jeremiah Owyang's post on how insurance companies are eying tweets as a potential data point for underwriting.

In short, he wrote, we can expect insurance and wellness companies to monitor social data, then reward - and penalize member actions.

He suggested a few hypothetical scenarios: Insurance companies, for example, monitor what members are saying, then offer suggestions on wellness, activities, and being healthy. "Overtime, they can develop intelligence and eventually predictive models based upon members published information and their overall well being." From there companies will be able to size up new members based upon their existing social behaviors online - and use that as part of the decision in what packages and rates are offered.

More ominously, Owyang wrote, insurance companies could monitor customers - and make underwriting decisions based on their behavior. For instance, checking into bars four times a week could yield a 10% increase in a premium. Pictures posted or texts sent while clearly driving would translate into an increase in car insurance.

Financial Services

There are already signs financial services companies are at least experimenting with social media data. Security firm AVG's Chief Research Scientist Roger Thompson describes a recent encounter he had with his credit card company in a blog post. His credit card had been suspended when purchases made during a recent trip to London triggered the card's fraud detection system.

In order to get it reinstated, the credit card company asked him questions about his daughter-in-law after asking the usual security questions such as the last four digits of his social security number and the types of accounts he has with the bank. Specifically the representative asked, according to Thompson, "What age-range would best describe this person and he proceeded to ask me about my daughter-in-law using her maiden name - and she's been married for nine years."

Thompson believes the bank connected his daughter in law to him via Facebook. "We have no connection on any bank accounts, or legal documents and she hasn't used her maiden name for nine years. I'd have been less suspicious if they'd asked me about her married name. The only place we connect as far as I’m aware is that she's a friend on Facebook," he said. Thompson concludes by saying he doesn’t believe Facebook is selling users' data but that someone else is harvesting it.

In another example, a company called Rapleaf is using social data - namely who people's friends are online - to help lenders determine whether that person is a good risk. "Who you hang around with has empirical implications with how you behave," says Joel Jewitt, Rapleaf's vice president of business development. "This is a new type of information. It's still an evolving science, but the results have been positive." (via Fast Company).

Watershed Year

"2009 was a watershed year for social networks, with the numbers of people joining or expanding their use of these sites," Dallas Lawrence, chair of the digital and social media practice group at Levick Strategic Communications, told the E-Commerce Times. "The next stage, I believe, will be companies taking all this information [and] combining it with new search tools in order to sort through the trillions of data points available," Lawrence said.


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