Make data pay!

As the application of big data spreads, companies become aware of opportunities for increased insights and business intelligence. Many also raise the question if their data is underutilized, and can create new opportunities for top-line revenue.

Enter the world of data monetization; the process where data generated in interaction with customers, turns to services that generate new revenue. It is hardly a new concept, Google and Facebook have done it for a decade. In this pursuit, how can you know if your data has value?

1. Is your data providing unique insights into consumer behavior?
Most data of value are what is lately referred to as first party data.

For the most case, customers are individuals, but it may also include transactions with other businesses and even machine to machine transactions. Stock-exchanges are an example of the latter. Is your data unique in its nature or are you collecting data that is widely available? The goal is to turn your first party data into another companys second or third party data.

2. Is your data allowing companies to identify consumers or entities?
Can the transactions be attributed to a single consumer or entity? If so, it will be possible to connect the behavior in the transaction to a business or an individual.. For instance, you can enable them to improve their own relevant and personalized service offerings to their customers. You can also aggregate the data to provide anonymized behavioral information, that may be of huge interest to third parties.

3. Is your data based on high-frequency transactions?
A third aspect to consider is wether the data is generated frequently. If the data stems from an infrequent type of transactions, it will have less intrinsic value for third parties. For example a retail company or payment processor have very frequent transactional first party data with its customers. This allows them to segment their customers into precise behavioral categories, that are more valuable than segmentation based on rare transactions.

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Even if your data has value to third parties, you should always consider if it acts as a strategic lever in your market. By givind access to your first party data (or a subset of it), you are giving up some degree of control. With new applications of data analysis rising steadily, you must ensure that commercial value of your data does not superseed the strategic and competitive value insights derived from these data can offer.