Get Your Data’s Worth: How Enterprises Monetise Data
The age of digital interconnectedness has brought on a radical transformation when it comes to personal data. As more and more technological advancements enable us to take leaps in terms of our ability to gather, store and process data, we are slowly but steadily unlocking its infinite potential. It is often said that data is the currency of the future – but what does that mean for the average business?
The Value of Data as an Asset
There is a significant trend in exploring new ways to put data to good use. Big data, defined by increased volume, variety and velocity which made it impossible to process up until a few years ago, has now become a part of everyday tech discourse. Even though the average small or mid-sized company won’t have the same volume of data to process as tech giants like Facebook or Google, big data developments have uncovered ways in which data can become valuable – which is also known as data monetisation. The data your company keeps is invaluable for advertisers, as Facebook’s sheer market value can prove, compared to companies that sell much more practical products that are in daily demand.
In 2016 alone, Facebook made a profit of almost $27 billion exclusively by virtue of its advertising products – and it is no coincidence that it holds the keys to the personal preferences of its users. A 2017 study by the University of Rochester Simon School of Business concluded that when targetting users without any prior knowledge about their behavioural data, ad impressions fetched prices that were on average 59.2% lower those targeting users with access to their tracking cookies history. The data you have in store could be valuable to another business as an asset for a partnership – if used to help conversion rates grow and improve online ad targetting.
Data that Cuts Both Ways – Eliminate Losses and Increase Revenue
Of course, with great power comes great responsibility: The more data you gather and store, the more likely you are to become a target of cybercrime, and the greater the impact of a security breach on your company. The more you get into the data game, the more crucial it becomes to invest in IT personnel and processes that can guarantee data security, protecting your data from malware attacks and extortion while maintaining your reputation intact and ensuring regulatory compliance with privacy legislation – and avoid financial loss. In 2017, Equifax, a US credit reporting agency that amassed information on more than 800 million individuals and 88 million companies all over the globe, fell victim to a data breach that saw 143 million user accounts compromised. The class-action lawsuit that resulted could cost the agency around $70 billion.
But even before converting data to monetary value as an asset, it can become valuable in terms of helping streamline work and cutting back on operational costs. Understanding how much and what types of data you have access to or process regularly can help your company identify ways for updating its operations, avoiding redundant steps like asking for the same information more than once, and make liaising with stakeholders and reaching out to your consumer base more efficient. Taking a closer look at your data and refining it can help you pinpoint entry points to increase revenue and cut off profit leaks. Just to get a basic idea, imagine what you could do with a refined and elaborate review of your employee and customer retention figures, your pricing and selling strategy impact, or customer experience feedback.
The digital revolution is already here: data is a tool, but it is also a liability. And businesses need to be smart about making the best out of its use.