Data Monetization Should Be on Everyone's Radar
Whether you realize it or not, there is significant financial value locked within your enterprise systems and data repositories. The recent explosion of big data coming from sources such as mobile, social media, devices, and the cloud present even more opportunities for your organization to exploit it to increase revenue or reduce costs.
So What Is Data Monetization?
Data monetization is the act of generating measurable economic benefit from data sources. These benefits are realized as either revenue gains or productivity/expense savings.
In a time of declining revenues, diminishing customer loyalty, and shrinking profit margins, your organization is under tremendous pressure to find new ways to make it or save it. There is something you may be overlooking that can help you to achieve these goals – your data.
The most obvious way to make more money from your data is to sell it. Let's take a look and other monetization options.
Making Money Directly From Your Data
Companies in a variety of information-rich industries are already generating entirely new revenue streams out of the data they hold, whether selling access to the data, or analytical services related to that data.
There are several obvious models where data is the key value driver, examples being Equifax or Experian selling consumer data to financial services providers to either manage risk or attract customers (e.g. via free credit scores). Nielson sells audience research data to a wide variety of B2Cs, usually with a marketing intent, and Intelius focuses on selling information about people and security for verification and employment purposes.
Some data vendors add additonal layers of intelligence, which adds further contextualization and value to the offering. For example, a predictive layer might add purchasing probabilities for demographic segments when considering product purchases, such as cars or TVs.
Is it possible for your organization to apply this type of data monetization model and generate incremental or new revenue streams? Or is the value gleaned from internal cost-savings and performance improvements? Or both?
Identifying Potential Value From Your Data
First, you’ll need to determine which information will have the greatest impact on your top line or bottom line. Host a couple of brainstorming sessions. Take a look at your data, operations, and interactions inside and outside your organization. Are there any new data sources (e.g. Big Data / Internet of Things) that could be enriched with customer data to provide new insight and additional analytical value?
Focus on any low-hanging fruit - one or two types of information with the greatest potential for increasing revenues or profits, or reducing costs. In many cases, this will require some preliminary research and analysis, to uncover patterns in customer behaviors and purchasing patterns, or in core operations. Consider an approach that will deliver the fastest returns. That will also provide you with demonstrable successes, so you can easily garner support for expanding the strategy to include other areas where data can be monetized.
Where Is the Data Coming From?
Next, you’ll need to identify the data you need, and where it resides. Once you’ve determined its source and location, you’ll need to plan for its capture, collection, preparation, and contextualization.
While information from internal systems may not be all that challenging to access, there are other important sources to consider, such as social media and the cloud. Enhancing your existing data with customer sentiment and other insights from these sources will substantially increase the monetization potential of your information assets.
Is the Data Ready to Be Monetized?
Maximum financial value can only be achieved once you’ve ensured the integrity of your information assets. In many cases, the data you’re gathering will come from multiple sources. Ensure credible data integration, cleansing, remediation, and governance processes are established to provide an onging trusted flow of information.
Deliver Information and Insight on User's Terms
Carefully consider your audience for monetization. Whether delivered inside or outside the organization, you will need to know the analytical savviness of the targeted users. What type of analysis and user interface will provide the most value?
Execs love dashboards and KPIs. Analysts love to explore data with visual tools. Operational workers prefer immediately intuitive reports or apps that deliver contextually appropriate insight, likely embedded in their everyday systems. Customers or consumers might enjoy analytical documents containing a prepackaged set of reports, charts, data, and excel-like functions. Partners might prefer access a secure portal, and the ability to upload their own data to analyze alongside your data.
Whichever path you choose, make sure the data is of value, it is trusted, and delivered in the most convenient and relevant way.
Good luck, and feel free to check out this paper which gets into more detail about 'Data Monetization Strategies'.