Andreas Weigend, Social Data Revolution | MS&E 237, Stanford University, Spring 2011 | Course Wiki

Class_12: Identity

Date: May 5, 2011
Audio: weigend_stanford2011.12_2011.05.5.mp3
Initial authors:Liying Yue(, Andreas Nomikos (

Key Points

  • What is identity? How we define in in the online world and how do we use it?
  • How can merchants make use of the identity of their customers and promote their own identity?

Guest speaker: Evan McMillan

  • Recent Stanford Alumni (Class of '09)
  • Co-founder of Zappedy
  • This YT video gives an overview of what the company does:

What is an identity?

Some distinctions:
  • offline vs online
  • information you share vs information that others share about you
  • observed attributes vs user generated information
  • distinct attributes vs timelines
  • big impact vs small impact
  • real identity vs unconfirmed identity
  • Facebook vs. LinkedIn

A quick class brainstorm reveals important factors when it comes to characterizing identity:
  • Time
  • Role
  • Interests
  • Location
  • Personas
  • Friends
  • Passport
  • Time online

...But all of the above are focused on self.
The big insight here is that more or less everything in the world has an identity. Those include groups of people, businesses, states and whole countries.

How do we deal with those identities?

Some examples:

The company offers an API that returns info and can help sales people promote a timeshare or convert a potential client. They are looking now to expand into the retail industry.

Main value proposition: It’s hard to convince strangers to buy a timeshare, but with the right use of the buyers information at the right time a sales person can make a successful sale.
This approach is advocated in the following book where the author claims that the integration of Customer Relationship Management (CRM) to social networks can greatly increase the efficiency of sales teams.

external image splashnew_book.png

However major questions are raised: What kind of information and to what extent should we use?

Some class suggestions:
1) Only if the user volunteers the information.
2) Shouldn’t use the info to perform price discrimination.

Harrah's Las Vegas Player Card tracks a variety of metrics:
  • Type of game player
  • Amount of buy in
  • Time spent playing game
  • Gains/Losses
  • Stakes
  • Location of game

What info do you use to maximize happiness and/or revenue:
1) bank account
2) # of times you have been here before
3) # of time you have played
4) gain and loss of each game
5) bankruptcy history

  • Case Study explains Harrah's strategy to redesign their incentive program based on customer behavior data

Digital and Digitized Identity

Digital Identity is a particular form of identity that exists in the digital realm and is associated with oneself as well as one's interactions with other people and things. For example, whenever we are clicking on a variety of links on the internet, we are using our digital identity.
Digitized Identity is the digitized version of one's real world identity. For example, the information about you in your bank account.

As evident by the Aol search data scandal real identity is easily discovered from a digital one by knowing only a very small amount of attributes. This makes the release of anonymized data to the public an extremely challenging problem.

Here is a great video of approaching identity from an academic perspective:

Forms of digital identity that are widely used across the web currently include:

Facebook Connect is a set of APIs from Facebook that enable Facebook members to log onto third-party websites, applications, mobile devices and gaming systems with their Facebook identity. While logged in, users can connect with friends via these media and post information and updates to their Facebook profile. Developers can use these services to help their users connect and share with their Facebook friends on and off of Facebook and increase engagement for their website or application. Similar services are provided by Google, Twitter, Linkedin and others

external image chart-of-the-day-social-login-dec-2010.jpg

OpenID is an open standard that describes how users can be authenticated in a decentralized manner, obviating the need for services to provide their own ad hoc systems and allowing users to consolidate their digital identities.
So far every website has been using its own authentication method leading to fragmentation and an inability to establish a unique and consistent presence across the web. OpenID provides a way to preserve a digital identity online and use it when necessary to establish oneself. Well known openID providers include Google,Yahoo and Wordpress.

Public Key Certificate is an electronic document which uses a digital signature to bind a public key with a real life identity — information such as the name of a person or an organization, their address, and so forth. The certificate can be used to verify that a public key belongs to an individual. A critical part of the public key infrastructure and currently used in e-commerce throughout the world initially was thought to be the equivalent of a passport in the web. However lack of incentives for simple consumers to adopt it has limited its usage to the authentication of merchant websites.

The Obama administration has also been working on developing a standardized, central internet ID for all users. More information about the program and potential goals can be found here

How to use identity to provide value?

  • Identity of merchant : loss of privacy happens more and more for merchant.
    • Yelp reviews are now a absolute criterion for consumers to decide where they will spend their money
    • Consumers have more power due to internet, but merchants remain under-served so far.
  • Helping people making better decisions: help both consumers and the merchants.
    • How do merchants make decisions? Should a consumer use his gold card on a particular purchase?
  • Consumers get major benefits based on their online activity. Are there ways to help merchants have equivalent benefits?
    • Yelp: consumers that visit a merchant frequently become preferred customers and enjoy great benefits.
  • Merchants have little knowledge of the way that customers find them.

Interesting article on Yelp's corrupt practices: "Several business owners likened Yelp to the Mafia, and one said she feared its retaliation..."


Example Information that merchants can use
  • Reviews
  • Geolocation
  • Payment info
  • Social profiles
  • Orders

Possible opportunities and products?
  • Different companies can use the same unified loyalty programs
  • Motivate customers to fill out surveys
  • Deeper understanding of customer needs and use of analytics to make better decisions.
  • Shifting the balance of power
    • Airline companies know a lot about you. Other providers want the same level of data.
  • Adaptive Pricing
    • Loyal customers can receive benefits. But what will the reaction of other customers be?

Real world payment info

  • Swift is a global provider of financial messaging services processing an whopping 3-4 trillion $ in transactions every day all over the world.
  • Square a Silicon Valley current sweetheart is also set to tackle the same problem by redefining the way payments are made and helping merchants have a better overview of their business.
  • Google recently announced that they are entering this space with it's Google checkout program
  • Bling Nation and Venmo also operate in this space.

Swift has access to an incredible amount of financial information. They can look at transactions that come out of 90-95% of the stores in the US.

How do we change the life of a merchant for the better. Lot of info is available to consumers, but not to merchants!

Potential Ideas
  • Develop a SaaS service (potentially big data company like Google/Amazon) to offer merchants an elastic means to benefit from customer data determined from payments.
  • Merchants can use customer payment information to glean publicly available customer social data to recommend items to their friends. As a customer, I would be more likely to buy something if I knew my friend bought something from the same store.

Uses of a credit card
  • Personal information
  • Partial credit card number, match to the store info. (Zappedy's business model)
  • Measure the impact of some online advertising
  • Payment as a form of communication between merchants and customers

Some thoughts on the future

  • User center identity
    • How can I control my information or what part of identity to share with whom?
    • Personal data storage
    • Change the power balance. Now you issue your identity to share with the outside world!
  • Trust frameworks
    • All the banks are shareholders to each persons digital identity too!
    • It has to be nonprofit & I want to know what they really are
    • Liability when something goes wrong should be covered by legal agreements.
  • Identity
    • We saw digitized books/photos having the same contents as real ones, but a number of other things changed.
    • What will happen when our real identity is digitized?
    • What do you want people to know?
  • Identity has a perceived value and an absolute value
    • We need to specify which value we are talking about.
  • Social currency
    • Reputation, trust, influence.
    • It doesn’t have anything to do with a traditional monetary system, so it will be governed by new rules
  • Mobile Payment Innovation