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What are data marketplaces?
From a provider’s perspective, a data marketplace is a platform that is used to list—and sometimes fulfill—their data products and offerings. Traditional data discovery, integration, aggregation, and distribution methods may prove to be too time-consuming and complex for the average data provider, especially without a team of dedicated resources to handle the intricacies of licensing agreements and the custom development required for each data set. Marketplaces have grown in popularity in recent years because providers can obtain access to an established client base which gives them the means to avoid the cold-start dilemma.
A Data Marketplace enables data sales and shares
For the data consumer, a marketplace is a medium (in the form of an online storefront) that makes it possible to find and purchase the data sets they seek. Regardless of the viewpoint, it’s important to note that all marketplaces are administered by a single operator, usually a cloud provider. This aspect of marketplaces generally creates its own set of challenges and limitations. Enterprises that leverage data marketplaces must be aware of these difficulties and understand how to effectively address them to maximize their profits.
But Data Marketplaces Have Challenges
Data is becoming the lifeblood of many organizations which brings an influx of opportunities for companies that generate, package, and sell their data for economic benefit. While data marketplaces give providers a means to showcase their data directly to potential customers, there are a few challenges that providers might not be aware of or know how to overcome.
Data Marketplace Standardizations Limit Display Flexibility
In an effort to keep data products consistent and displayed homogeneously, marketplace owners enforce a strict set of standardizations that all sellers who list on marketplaces must adhere to. For example, in niche data marketplaces, metadata of a data product will only be listed as it pertains to the niche itself (based on industry, region, subject matter, etc.) while in more broad marketplaces, different metadata is listed for the same product. Since the operator owns the marketplace, they have the authority and the right to determine how a product is listed. Products listed on marketplaces might not be conveyed in a way in which the buyer can make sense of the data, understand its value, and be enticed enough to make a purchase.
This poses problems for businesses that want to monetize unstructured data sets, create custom data products, or experiment with different pricing models. Even though a marketplace provides a centralized platform that in theory should simplify the comparing and contrasting of data products, this is not always the case. Data products cannot be watered down to a certain set of predefined criteria because each product can be completely different from the next.
For ‘irregular’ types of products to be searchable, each product needs its own metadata and sometimes even a separate category. Comparably, listing a vast array of metadata that is not fit-for-purpose isn’t a viable solution either. Listing too much irrelevant metadata makes the buyer’s journey one that is tedious and burdensome. Unfortunately, marketplaces are, for the most part, not flexible enough to accommodate variances in products, nor are they able to display a detailed data catalog of the provider’s full range of available offerings in the way that is best suited for the data, which contributes to the difficulties for buyers to find and procure the specific data they need.
The Consumer Journey Is Often Convoluted
There is a seemingly infinite amount of data available to find on the internet, but this doesn’t mean that all data can be easily discovered or accessed. It also doesn’t mean that the specific data a buyer is looking for is available. Data discovery is a step that is often overlooked by providers that list on marketplaces. Providers may be falsely assuming that discovering their products is easy on marketplaces because the marketplace already has existing buyers within their target market.
Although marketplaces do connect buyers and sellers, data discovery is usually not a straightforward process when the seller has limitations on what they can and cannot do in a marketplace. Marketplaces can either be private or public as well. In private marketplaces, both the buyer and seller need approval by the platform owner before they can join, which adds another layer of friction for the seller and buyer to access the data they seek. For marketplaces in the public domain, buyers can freely exchange data with any seller, provided they can determine whether the data source is reliable and trustworthy.
Implied trust between the seller and the buyer. Simply put, trust is an implied element of marketplaces for both sellers and buyers (even though there’s a degree of due diligence they likely do go through before actually making a purchase). Buyers need to trust that the data is of high quality and that the provider is a reliable source. On the other hand, sellers need to trust that the buyer, who might not necessarily be the consumer, will adhere to the licensing agreement and usage rights in addition to the security and privacy restrictions of the data after purchasing.
There's A High Degree Of Competition With Listings
B2B data marketplaces remain competitive against other marketplaces by keeping their prices low and usually at a fixed cost. Although a marketplace creates a favorable environment for buyers to access data at a relatively low price point, the sellers remain disadvantaged by being unable to experiment with different offerings and price points based on how their data is packaged.
Marketplaces also provide a means for data providers to compete directly with one another. Since products are standardized by the marketplace owner in terms of metadata and search filters, identical data products from separate providers cannot list their products in the way they should to differentiate themselves from the competition. Similarly, the order in which a listing appears after a set of filters is applied can affect whether or not a buyer decides to purchase a data set. The marketplace owner is the only authoritative body that can determine whether your listing will take the top spot or whether your data set will be buried on another page, leaving the door wide open for the competition to likely accumulate the bulk of the profits.
The Solution to Data Marketplace Challenges? A Data Web Store.
Every business data marketplace strives to connect data providers to potential buyers. Due to marketplaces’ limitations, including those outlined in the previous section, solely relying on marketplaces alone as a monetization strategy is insufficient. The vast majority of the issues with data marketplaces stem from the control being placed in the hands of the operator, not the data seller. One way to counteract this and minimize the struggles providers face with data marketplaces is to create a Data Web Store, where the data provider is both the owner and operator of their own marketplace.
What Is A Data Web Store?
Revelate’s Data Web Store is a centralized data commerce platform that makes cataloging, segmenting, and marketing data products externally effortless for enterprises across any industry or location. It securely consolidates, ingests, and aggregates large amounts of data and allows providers to turn data into products that buyers can readily access with the least amount of friction. In contrast to data marketplaces, the Data Web Store empowers providers to curate the data consumer’s end-to-end experience, strengthening the relationship between the two parties.
Leveraging a Data Web Store in conjunction with a marketplace can mobilize data—i.e., providing a way for data producers to efficiently package and distribute data while enabling consumers to access said data easily and quickly.
If you’re interested in exploring how to mobilize data using both data marketplaces and web stores, we suggest reading our concise blog on Marketplaces and Web Stores: Mobilizing the World’s Data Together.
Data Web Store Vs. Data Marketplace
A Data Web Store can minimize or remove the nuances associated with marketplaces, including:
Creating standardizations based on the consumer’s purpose
Customize every offering—however broad or niche. Make derivative products that suit the buyer’s purpose and experiment with different pricing options. Have the power to produce a data catalog that includes custom data products and/or unstructured data. Create your own standardization using metadata for enhanced discovery and accessibility, ensuring the data product is fit for purpose.
Streamlining the consumer’s journey
Be fully in control of the consumer’s journey from data discovery to deliverability based on however granular the data products might be. As a data provider, you can offer complete data traceability to foster a stronger consumer relationship based on trust. This will create a continuous feedback loop that you can use to further enhance discoverability and/or build better data products that will sell in larger volumes. No direct competition on the same platform. Each Data Web Store is its own entity—your data products will not be in direct competition with similar data products offered by other providers. You choose how the data is displayed and optimize the listing as needed.
Best Of Both Worlds
Minimizing friction in the buyer’s journey from discovery to procurement to access will positively impact any organization that monetizes its data. Leveraging data marketplaces and web stores can make this happen by getting the best of both worlds: using an existing customer base to immediately reach potential buyers and amplifying this reach by controlling the consumer’s experience and listing products in a way that entices the consumer to make a purchase.