JUNE 30, 2008

The Art Of Predicting Group Behavior

It’s called “Reality Mining” and it works like this: by tracking aggregated non-personal G.P.S. data and running it through specialized software, information analysts are able to paint an interesting picture of how people live:

…Sense Networks, a software analytics company in New York, earlier this month released Macrosense, a tool that aims to do just that. Macrosense applies complex statistical algorithms to sift through the growing heaps of data about location and to make predictions or recommendations on various questions — where a company should put its next store, for example. Gregory Skibiski, 34, the chief executive and a co-founder of Sense, says the company has been testing its software with a major retailer, a major financial services firm and a large hedge fund.

Tony Jebara, also 34, the chief scientist and another co-founder of Sense, said, “We can predict tourism, we can tell you how confident consumers are, we can tell retailers about, say, their competitors, who’s coming in from particular neighborhoods.”

All this information can then be sold to businesses trying to capitalize on location trends and traffic patterns. It seems like a slam dunk, if it weren’t for the thorny issue of privacy. On the other hand, some reality prospectors seem to have an answer for that too:

Mr. Skibiski says that Sense is interested only in aggregate data and that it’s looking for broad patterns, not the specific behavior of individuals. But he recognizes the privacy issue. He says he believes that people should own their own data, control when it is disclosed and receive some remuneration for it. His original idea in 2002 was to pay people for their data, but a formula for doing so proved too complicated.

Instead, Sense decided to trade services for data. On the same day it released Macrosense, it announced a new software package called Citysense, which uses location data to show where people are going, say, for nightlife, and maps their activity. Consumers who have iPhones or BlackBerrys can sign up for the service, which does not ask for personal information. Over time, the software will learn their patterns and recommend places they might like to go, or show them where other people with similar patterns are going. If they want to purge their data, they can do so at any time.

We make these sort of trade-offs more often than we think. If we want to use certain tools, like PageRank on the Google Toolbar, we have to allow for anonymous usage statistics. A number of software packages ask permission to share anonymous data as part of the EULA process. And every time you scan your little keychain card to get a discount at the supermarket, you’re adding your info to the dataset.

With all the compromises we make to privacy, is there value in the kind of trade Sense Network is willing to provide - a version of its service that’s useful to you, in exchange for data that it can sell to others? My guess is that it’s the sort of thing we’ll have to evaluate on a case-by-case basis, but we’d better start thinking about it. We’ll only see more of this kind of thing, not less, as G.P.S. and location-specific services become more ubiquitous.