Numerous businesses have recognized novel and unconventional uses for the daily growth in the volume of streamed and processed data, including data monetization. The technique of using company-generated data to generate a quantifiable economic gain is known as data monetization. This can involve disclosing data to outside parties or using it privately to enhance operations or seize fresh chances for innovation.
Businesses that use data monetization are seeing advantages like cost savings, revenue growth, and the potential for new data-related services. There has never been a better time for your organization to discover how to get a competitive advantage through efficient data gathering and analysis because the benefits of data monetization currently outweigh the initial time and money commitments.
What is data monetization?
The technique of using company-generated data to generate a quantifiable economic gain is known as data monetization. Businesses that monetize their data frequently reap benefits like higher revenue or decreased costs.
According to Extrapolate, the global data monetization market is projected to reach USD 12.47 Billion in 2030, recording a CAGR of 19.4%. These numbers are a clear indication of the robust industry.
The monetization of data can be performed internally as well as externally:
- Internal data monetization is the process of employing analytics and data to create business decisions that have a measurable impact on how a firm conducts its operations. Any organization may leverage its data to enhance internal processes and practices, such as more focused marketing campaigns, recognizing upsell chances, and improving the customer experience—all of which maximize corporate profitability—by modernizing its data and analytics ecosystem.
- The process of using your internal data assets to develop a product or service and selling it to a third party is known as external data monetization. This can take the form of survey results, one-off datasets, benchmarking or forecasting reports, or any other kind of data derived from consumer interactions. You can sell your data outside as long as you have a quantifiable data asset. For instance, if your company gathers consumer data, you may bundle the insights and give your clients premium access to benchmarking data and guided analytics.
By sharing their personal information with third parties in a mutually advantageous arrangement, businesses can also leverage their data to create slightly less tangible benefits, like new alliances or improved supplier conditions.
Organizations may decide that their data is valuable enough to start providing data services to a sufficient number of other businesses. This trend was started by Facebook and Google, which used their free platforms to build vast data assets that they then sold all over the world.
Are Tremendous Amount of Data Disrupting the Industry?
Organizations have recently produced more data, both in terms of amount and diversity, thanks to factors including digitization, the Internet of Things, and advancements in more antiquated technology. According to Forbes, 95% of businesses have trouble managing unstructured data. Connected devices that are connected to the internet are one of the main sources of the massive numbers and varieties of data that are produced. According to forecasts, more individuals will use these connected devices, producing massive amounts of data. Timely access to data is a difficult process since the data produced by these sources is kept in various formats at several physical locations.
Decoding the Relationship Between Data Solutions and Data Monetization
The adoption of these solutions has grown over time as a result of the growing company focus on creating new opportunities for growth and revenue, improved awareness of the potential advantages of data monetization, and other factors. Many firms are moving towards data monetization since it maximizes profitability, improves compliance, nurtures customer loyalty and data consumption, decreases operating expenditures, fortifies alliances, and improves consumer experience and comprehension.
Why Monetize Data?
Why should your company make the switch now when only 1 in 12 businesses are now fully monetizing their data?
- Gives a Competitive Advantage: It can be challenging for companies to stand apart in mature industries. Effective data monetization methods can give businesses an advantage over rivals that haven't yet fully realized the potential of their data.
- Creates New Revenue Streams: Data monetization can still create new revenue streams even if you don't intend to sell your data to a third party. A brand-new product may be developed to address freshly identified demands, for instance, if new client trends are discovered in your data.
- Operations Can Be Simplified: For those of you in the manufacturing sector, a thorough examination of production data can assist in streamlining output. Businesses benefit from the positive outcomes of less waste and wasteful spending.
- Form Strategic Alliances: Data monetization need not be restricted to purely financial rewards. You can request favorable terms in exchange for your data analysis findings from interested third parties, such as banks and credit providers.
Case Study of monetizing data in consumer products
The biggest brewery in the world is called AB InBev. Unsurprisingly, they have bought numerous additional brands over their expansion. Today, AB InBev has a portfolio of more than 500 international and domestic beer brands scattered throughout 100 nations.
Naturally, there have been some difficulties with onboarding this many businesses. At one point, AB InBev used 20 separate integration solutions and 27 distinct Enterprise Resource Planning (ERP) systems to attempt to connect all of the disconnected systems.
Naturally, AB InBev realized right away that building a cloud-based data center would be the most effective method to gather all of the data in one location. AB InBev can now produce products faster and with more precise forecasts thanks to a centralized data hub, helping them to rule their sector. Due in major part to their new data strategy, they currently manufacture the top three-selling beers on the US market.
Final Thoughts
Businesses can use data monetization as a useful tool to increase revenue and learn more about their customers. It entails finding value in data via a variety of techniques, including selling data to outside businesses, using data for individualized marketing, developing data-driven goods and services, and more. Data monetization is becoming more common across a variety of sectors, including the automobile, manufacturing, and technology sectors. However, to guarantee that data is used ethically, there are also ethical issues surrounding data privacy and ownership that must be addressed.
