Your frequent flyer accounts are more than rewards for your behavior. They’re also data that’s valuable, too. So is your credit card spending. Banks don’t just give you points, get transaction value, and make money on interchange (merchant swipe fees) and revolve (interest). They generate intelligence about your buying behavior that can be rented out to companies that want to sell more to you.

When data is hacked, we hear about biographical information that’s taken – name, address, e-mail address, and we worry about social security numbers. That’s not even the really valuable stuff. What matters most is behavioral data which isn’t even your information per se, it’s the analysis a company does of the information it collects.

Biographical Data Isn’t Very Useful

Most personal information isn’t very valuable. At least, personal information alone doesn’t matter. Names, addresses and phone numbers were published in phone books and eventually digitized. Getting a copy of the phone book wasn’t very helpful to businesses.

Add in email addresses and things change a little bit. It’s cheaper to email someone than to call them or send something by mail. But a single email address still doesn’t have very much value. Even one million email addresses aren’t very valuable, because response rates to spam are so low.

It’s possible to commit fraud with social security numbers, and that happens, but most of our social security numbers have been compromised and nothing done with them. Here’s how financial fraud actually occurs.

To be sure, loyalty program account numbers and addresses have some value in large quantities because stolen frequent flyer miles can be sold on the darknet. Here’s a price list.

Behavioral Data Is What’s Useful

Knowing that a person flies for business every week and that their most frequent destinations are New York, Chicago, and Los Angeles is valuable. Knowing which hotel they stay at because of its proximity to another location and that they usually drive when they’re there is valuable. Knowing when they break their pattern is valuable, too.

As Mark Ross-Smith, the former head of oneworld frequent flyer program Malaysia Airlines Enrich, explained,

[K]nowing WHY a consumer clicks on a link or transacts with a brand. What was the intent, or the primary driving factor behind the engagement?

…These insights are derived from data science teams at the organisations who have invested time creating machine learning models to identify traits, trends and use success metrics to better predict future intent behaviour on similar consumers.

A company may know some demographics about me. I’m a mid-40s male, so they send me marketing pitches about golf even though I don’t play golf. My age and gender are attributes, not behaviors.

On the other hand a company may know you are motivated by animus to Hillary Clinton, or to Donald Trump. They may know you volunteer for environmental causes. How are you likely to vote, and are you someone who might be swayed on an issue? And with what message?

They may know what you drink on a flight, and how you like to be referred to. Are you someone that will usually extend a business trip through the weekend if the hotel rate drops to $150? What if breakfast is included? Will you buy up to a higher room category – a better view – for an extra $20 but not an extra $50? Is your spouse the real decision-maker?

Behavioral models take information about you and turn that into predictive tools which are the proprietary technology of a company. We don’t hear about that information when it’s stolen in data hacks. It’s not always in privacy policies either.

Focusing on Privacy Policies Misses the Point

Australia’s competition regulator is shocked to learn that loyalty programs sell their data and most consumers don’t understand this. But renting out marketing lists has been going on for many decades.

Privacy policies tend to focus on what companies can do with information you provide them. They may be poorly understood and written in legalese, but that’s often less about obscuring truth from consumers who rarely care and more about lawyers trying to protect companies from regulators by ensuring things are air tight.

When you upload photos to Facebook there’s really little value in the photos themselves, even if hackers get at them and even if you gave Facebook a license to share the photos. It’s categorizing the photos that’s useful for what they say about you. How do you design the inside of your home? What kind of yard do you have? Now layer on financial transactions.

Some travel company/bank relationships entail a certain amount of data sharing on customers – in both directions – to allow targeted marketing based on spend patterns that don’t even involve the airline or hotel chain whose brand is on the card.

We Only Dislike Bad Marketing

When someone says they don’t like marketing what they mean is they don’t like bad marketing. They don’t like receiving information that isn’t relevant to them, that doesn’t speak to them in their language, that isn’t what they’re interested in.

The world is full of bad marketing. There’s very little good marketing. That’s because for all of the lip service that companies pay to big data, most companies accumulate lots of data but don’t really know what to do with it.

Good marketing is something that all of us welcome: useful information that connects us with something we actually need or want, and even better information that comes to us right when we want it, to help us make a decision.

How Behavioral Data Will Benefit You Soon

I think we’re going to see loyalty programs using all the information they have about you, adding transaction data, and buying more data on the market to really come up with hyper-personalized models. That’s going to truly deliver the right offer to the right person at the right time and that’s valuable to you. It means far less noise. It means spending a whole lot less effort to get what you’re after (often failing to do so). And for the company it’s far less waste.

Say that there was a Mastercard Priceless Experience in a city you’re visiting, with a chef you admire, and having her cook you a meal or taking a class from him would be a dream come true. What are the odds you’d even know it existed? Do you go to the Priceless Experiences site to match up every trip with every opportunity on the dates that correspond?

But what if Mastercard knew both which experiences you’d be interested in, and when your availability corresponded with the opportunity — and prompted you to take advantage of it? That’d be a huge win for you, and a brand wouldn’t have to spend nearly as much wooing you with other things.

How Do We Manage the Downsides?

The truth is we’re being tracked. That ship has sailed. The idea that government will protect us from tracking is silly, they’re doing it more than anyone else. From license plate readers to storing cell phone geolocation data, the government can zero in on pretty much anyone. They want companies collecting data because it makes their lives easier.

The trick, I think, is going to be checking the power of those with access to the information. It needs to hold governments accountable, rather than just being a tool of governments. There needs to be more than disclosure. If we can protect companies from being forced to become tools of government surveillance, from banks to cell phone providers to social media and e-mail services, then having large decentralized databases may help serve as that check because the powerful are being watched too.