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SXSW:’s Data-Driven Revenue Model

Posted by: Douglas MacMillan on March 15, 2009


Plenty of ink has been spilled over, the personal finance site that’s seen so much growth in the past year that its competitors are getting jealous. Its simple-to-use web-based and mobile applications for tracking personal expenses and investments appeal to 20- and 30-somethings, a generation that wasn’t really even in this market in the past. And this year at South by Southwest, the site’s sleek appearance helped put it in the running for an award for best use of CSS, or cascading style sheets.

But what exactly is the company doing with all that extremely valuable financial data it’s collecting? First, it’s using it to sell users potential deals on credit cards and other offers from banks, who provide most of the site’s revenue. When users visit a page called “Ways to Save,” the site pulls together bank offers suited specifically to you – your credit score, your purchase patterns, etc., and tells you how much you would save by making a switch. So far, 20% of customers visiting this page click through to the partnering bank’s site – by comparison, traditional display banner ads are lucky to get a 1% click-thru rate.

Aaron Patzer, CEO of, wants to take this model further. He’s in talks with insurance companies, who want to pitch similar offers based on the habits of potential customers. And he says telecom companies would be a a natural fit, since most users enter their information on cable and phone bills.

A lot of lip service is given to data mining as a business model, but so far few of the big Web companies have come public with plans to turn a buck on information about their users — mostly, for fear of raising privacy concerns.’s model is transparent and, most importantly, uses consumer data to help consumers.

Here’s a video I shot with Aaron.

Aaron Patzer, from Doug MacMillan on Vimeo.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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