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That’s right: organizations of all sizes could leverage data to create external revenue streams. Or they could harness their data insights to improve operations. The data monetization market is expected to generate over $15 billion by 2030.
How to monetize data depends on your organization’s data infrastructure and business needs. Every company has information to sell. Doing it well relies on finding the data monetization tools and strategies for your specific use cases and industry.
What is data monetization?
Data monetization is monetization models: direct and indirect. Direct data monetization enables businesses to sell data to third parties. Indirect data monetization uses data insights to improve internal processes.
- Indirect data monetization: Use internal data insights to make measurable business improvements.
- External data monetization: Sell data to third parties, offer products or information services, and use data sharing to gain practical business terms and conditions.
How to Use Data Monetization
A comprehensive data monetization strategy is critical to long-term success and will extract the most value from your data. Implementing data monetization can create unintended challenges for organizations, especially around infrastructure flexibility and scalability. Planning will help your organization circumvent these pitfalls.
How to Create a Successful Data Monetization Strategy
The first step to a sustainable data monetization strategy is deciding which approach best fits your organization’s data strategy.
Data as a Service
Data as a Service (DaaS) is the most straightforward method for data monetization. DaaS involves selling data directly to intermediaries or customers in either aggregated or raw form. Data buyers then mine the data for insights relevant to their business needs.
Insight as a Service
In this case, an organization merges internal and external data sources to apply analytics and drive insights. These insights can be sold directly or augmented and presented in different formats.
Analytics-Enabled Platform as a Service
For this method, an organization combines an analytics platform with business intelligence to provide buyers with real-time data insights. This method is highly customizable and can generate immense value when implemented correctly.
Embedded Data Analytics
This is the most advanced method for monetizing data. It provides the highest value because it opens up new revenue streams for organizations. Embedded analytics involves adding analytics tools, dashboard reporting, and data visualization to existing applications. Product teams can leverage these insights to develop analytics apps at scale.
Prepare to Monetize Data
To select the best data preparation method for your data monetization strategy, you will need to:
- Determine the value of your data
- Create a process for managing and sharing data
- Price your data for sale
- Manage data delivery
To properly prepare to monetize data, organizations should follow some preliminary steps. These steps ensure your monetization strategy is sustainable and everyone involved is on the same page:
- Gain buy-in from everyone involved in implementing the strategy
- Assess existing data library
- Determine future data collection
- Decide on an audience
- Establish goals and objectives
Robust tools make preparing to monetize data much more accessible. Such tools can enable easy data selling and sharing internally and externally.
Use Cases for Monetizing Data
Want more about the benefits data monetization can bring to your organization specifically? Let’s examine a few specific data monetization use cases.
Big Data Monetization
Big data monetization refers to generating revenue from large volumes of data. The data itself is generated from various sources such as social media platforms, IoT devices, online transactions, etc.
Large hardware companies can use big data to optimize supply chain management, production processes, and inventory management. They can also monitor and analyze equipment performance to predict their maintenance schedule. Both these use cases result in reduced costs and improved operational efficiency.
Customer Data Monetization
Customer data monetization involves turning collected data into an asset that can be sold or traded. Monetized customer data generates revenue by selling or licensing the data to third parties.
Types of customer data monetization techniques include demographic information, purchase history, browsing behavior, social media activity, etc. Other companies can use this data for marketing, product development, research, customer insights, and more.
Organizations can implement customer data monetization for direct sales, licensing, joint ventures, and advertising purposes.
App Data Monetization
App data monetization generates revenue by leveraging data collected through an app. App developers can collect user behavior, preferences, demographics, and more data. They can use that information to create targeted advertising campaigns or sell the data to third parties.
Companies can monetize app data to improve their app advertising, data selling, and in-app purchases. However, app developers must be transparent with users about how their data is collected and shared.
Mobile gaming relies heavily on app data monetization. Mobile gaming apps can collect essential user data, like player behavior, preferences, in-app history, and more. Mobile gaming companies utilize app data monetization for app ads, app purchases, data selling, and obtaining sponsorships.
Data Monetization in Banking
Financial institutions are some of the primary players in the data monetization market. They leverage internal and external data for internal insights. They use those insights to optimize investments, improve risk models, comply with regulations, and more.
Financial services and banks have adopted data monetization strategies that generate more income. They harness their considerable customer transaction information to generate cross-sell offers and customer rewards programs.
Financial institutions can extract valuable information by conducting external risk analyses on internal lender habit data. They can determine which customers will likely default on loans, significantly reducing their lending risk.
Oil and Gas Data Monetization Market
Companies participating in the oil and gas data monetization market can derive significant benefits. These include risk and asset management, market research and production, and trading and pricing evaluation.
Oil and gas companies can use data to identify and prevent equipment failures and environmental risks. They can also monitor and manage assets like oil fields, pipelines, and refineries. Data can help find oil and gas reserves, optimize production rates, and analyze market trends that inform trading or pricing decisions.
Benefits of Monetizing Data
Outside the obvious economic benefits, there are several other positive outcomes from data monetization:
- Create a competitive advantage: Identify untapped markets, better target ideal customers, and develop new products relevant to existing customers.
- Increase profitability with new revenue streams.
- Strengthen partnerships: Increase collaboration by sharing data between internal and external stakeholders. Data sharing also adds value to individual organizations and the overall data monetization market.
- Enhance customer experience: Understand customer needs and predict future preferences for increased loyalty and churn reduction.
- Make data-driven decisions for better results: Gain greater visibility into business operations and anticipate changes in the market.
- Identify and prevent risk: Monetizing data requires organizations to properly and securely organize, manage, and protect data. Organizations must also ensure data is legally obtained. Meeting these compliance standards will make spotting and solving security risks easier.
Data Monetization Best Practices
Monetizing data is complex and involves legal and ethical considerations. There are a number of best practices for organizations and individuals to consider:
- Understand the value of the data
- Ensure data security and privacy
- Create and maintain a comprehensive data monetization strategy
- Be transparent about data usage
Before organizations monetize data, they must understand its value, including the possible derivable insights. This will also help companies fairly price their data and target the right audiences.
Organizations looking to monetize data must have strict data security measures for collecting, storing, and sharing data. Data monetization also involves privacy laws, regulations, and industry compliance standards that must be followed.
Transparency about how an organization collects, uses, and shares data will encourage customer trust.
Monetize Data with Revelate
Data value increases with its volume. Businesses that refrain from participating in data monetization will lose out on substantial untapped revenue. It’s just that simple.
Organizations that use Revelate to monetize data can easily prepare, package, and sell data products. Doing so unlocks a new stream of revenue, data-sharing partnerships, and internal efficiencies. Implement your data monetization strategy with the help of Revelate – there’s really no time to waste.