The full realization of value from data has become a standard of modern business. Since the big data revolution began, the pressure to realize maximum value from the data available for business purposes has grown to the point that data is now monetized with increasing frequency. One credible source says that 30% of business will have monetized their data within the net four years. But numerous companies are already doing it.
Data monetization means actually converting data into money, through its sale, or through its exchange for other monetized assets, or its exchange for other valuable data.
One technique being used is to make data available on a website or through social media to selected audiences, who can then purchase the data or else make an exchange offer. This is a form of data market.
For example, suppliers might be interested in data about customer reactions to the products they are producing, or about issues that have come up among customers about the components they are selling to the company. For the supplier, they might make similar arrangements with other of their own customers as well, which would enable them to create a data market, which could then be made available to all their customers in exchange for the data from the individual customers. This type of data market is a growing phenomenon.
The monetization of data through data markets also facilitates the valuation of the data. The fundamental value for these exchanges is often established through real time analytics of data coming in and being used for revenue earning purposes. Through the analytics, the incremental value of the data can be established.
Establishing the value of the data is also useful for determining the cost-benefit ratios of utilizing data in certain circumstances. For example, data on markets in certain geographical areas might be acquired for purposes of identifying market segmentation opportunities. Then after implementation, the actual benefit derived from the initiatives can be matched against the cost of the data, and the value of the data thereby verified or modified.
Without data monetization, the growth in the collection and use of data, particularly in the “big data” era, could run unchecked, and result in the generation of mounds of useless and marginal data. However, the monetization of the data provides a viable economic framework for making decisions about the data to be collected, and the use to which it should be put. It also opens the opportunity to make money directly on the sale of the data itself – a new and valuable commodity.