Most people have the wrong idea about data monetization. Many of them believe that it just means selling their data. It doesn’t.
To clear the air, here are three things I think everyone needs to know about data monetization:
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1. Data monetization is HOT, HOT, HOT (but so misunderstood)
Everyone wants to talk about data monetization. It’s red-hot, and it presents a fantastic opportunity for almost every kind of business.
Earlier this year, I was asked to give a talk at the Chief Data and Analytics Officer Summit. The audience voted for the topic, and the clear consensus was data monetization. But when I actually asked the room, “Who is monetizing their data”, I think there was one hand go up.
Not since “big data” in 2013 has there been so much excitement around a buzzword that so few people really understand.
2. There’s more to data monetization than selling your data
So much of the conversation around data monetization is: “How can I sell my data?” But that’s only a very small component of the wider opportunity. There’s more to data monetization than literally selling your data.
Businesses need to think about their data as a strategic asset, not just a commodity to be bought and sold.
Ultimately, data monetization is about turning your existing data into profit. One way to do that is to sell your data. But there’s plenty of other ways to use data that can impact revenue and/or costs. This is the broader opportunity that gets missed far too often.
Let’s use an example. You’re a manufacturing company, and you know who bought umbrellas last year, and whether they will again this year. You’re not going to sell the data about who specifically bought umbrellas. What you might do is take that information and use it to sell more umbrellas. Your data creates an opportunity to say: “You bought this product. Here’s why you should buy a different product this year.” Suddenly, you’re identifying new customer needs, and creating new revenue opportunities.
Data monetization is anywhere you ultimately use data to drive new revenue or reduce costs for your business.
3. Think broadly about all the ways your data can drive revenue (or reduce costs)
The question is not: “Who can we sell anonymized data to?” Instead, it is: “How much are we losing by not monetizing our data?” Nearly every business has an opportunity to monetize its data. Almost as many of those opportunities are missed.
This is thinking laterally about data, and widening focus. A mistake many organizations make is to think small. They are too literal about how to use data to make more money, when what they really need is a strategic and commercial approach.
When a business sells its data, what happens to it? The buyer takes this strategic approach. They don’t just sell the data on to another business. They take the data and find a way to drive revenue from it, or reduce costs. The new owner of the data does exactly what you should be doing. Right now.
Every business has opportunities to monetize data
Almost every business has an opportunity to monetize its data. A very small percentage of those opportunities are literally selling data.
The best data monetization strategy is to “think broadly.” Opportunities are there for the taking. Go out and find them.