The topic of data monetization is becoming an important subject of discussion by many organizations as well as industry influencers and market researchers including Gartner who predicts that “by 2016, 30% of businesses will have begun directly or indirectly monetizing their information assets via bartering or selling them outright”. Gartner also states that “CIOs lack any reliable inventory of information that exists throughout the organization, for example, where it is, what it means or the measurement of its value. Yet “information” is the CIO’s middle name – and we are in the the midst of the information age”.
With this in mind, now is the time to put the topic of data monetization front and center in your overall information management strategy. Although clearly self explanatory to many that deal with data assets within their organization, the Wikipedia definition does a good job describing data monetization as a way of “generating revenue from available data sources or real time streamed data by instituting the discovery, capture, storage, analysis, dissemination, and use of that data”. However, the second part of the definition is more suitable to what is really going on the industry today where “data producers, data aggregators and data consumers, large and small, exchange, sell or trade data”.
In the context of data monetization, organizations must also have a clear strategy about what they can and cannot do with their data. To tackle this challenging topic, many organizations are now hiring or have hired “Chief Privacy Officers” that require deep and relevant experience as an attorney or regulator but also have a degree of experience in the world of data. As of this writing, companies like PayPal, Koch Industries, Georgia-Pacific and Affinity Health Plan are seeking to hire Chief Privacy Officers. Whether you plan to monetize your data or not, companies will find this position critical to your overall data monetization efforts. Beyond having a key executive overseeing your data monetization efforts, companies must be aware that severe penalties can and will be levied against organizations who don’t obey the rules or protect their sensitive information assets from falling into the wrong hands.
Data monetization has been in play for quite a long time, this is demonstrated by the existence of large scale “data brokers” who collect and integrate data with other data assets available, and then sell this data to organizations including marketing organizations to help those organizations provide a more relevant and personal experience through a wide variety of channels including email and advertising. These “data brokers” collect and store billions of data across the global customer base where consumers might have opted-in to a detailed survey where the consumer are rewarded with coupons, rewards or cash prizes after filling out the survey. Data is also collected through browser cookies where consumers leave digital footprints of where they have traveled online. However, cookies are starting to fade away and being augmented or replaced with a variety of techniques including the use of known identifiers that are linked personal data like name or email address. Once collected, whether through a survey or through other opt-in means, these data brokers may also anonymize personally identifiable information (PII) so as to avoid any potential security risks.
With the explosion of SaaS applications as well as the growth of cloud based data solutions, organizations are finding themselves flooded with information that many might consider overwhelming and somewhat useless only to their internal organizations. However, smart businesses are putting a great deal of attention on these data assets as they hear more and more about the value of all their “big data”. To help businesses collect and integrate all this data as well as ensure application data is flowing across their organizations, companies are now taking advantage of integration platform as a service (iPaaS) solutions to help them keep information assets connected and flowing either from app to app or from app to data warehouse. Without an iPaaS solution, organizations will struggle to find ways to monetize their data.
While some organizations focus on the collection and selling of data as a path to data monetization, others see data monetization as a path to offering their customers a more engaging, personalized and relevant experience as they look to purchase products or services from their businesses. Although data assets aren’t being sold, they are being acquired and integrated, using iPaaS to achieve this highly personalized experienced. A more personalized and relevant experience means a greater likelihood of gaining a customer as well as driving transactions several times over resulting in more revenue.
Companies are also creating data monetization alliances where organizations are partnering to participate in an open exchange that simplifies the process of sharing customer data between solutions. The IBM Universal Behavior Exchange (UBX) is a pioneering example where UBX is enabling marketers to connect all of their critical marketing solutions to ensure that data can flow between a wide variety of marketing solutions using a cloud based self-service where marketing pros can enrich their data through an ecosystem of partners. It is likely that other SaaS providers will create similar offerings to expand the way companies share and monetize data assets.
State Street Bank is another example of a businesses seeking to help organizations capture both inbound and outbound investment activities and data across a variety of types as well as transactions in the financial world. As part of the State Street Bank Data-As-A-Service Platform, they have created a data refinery call Data GX for aggregating, normalizing and redistributing internal and external data that provides a global view of investments.
PWC is predicting that revenue from monetizing data will reach up to $300 billion per year in the next few years and Accenture Consulting is claiming that the “data monetization opportunity is ripe for any company that gathers data on the use of its goods and services, particularly consumer data”. All this conversation on the data monetization topic is a clear indication that we are likely to continue to see Integration Platform As A Service as very important pillar in ones overall data monetization strategy.