Data monetization—and uncovering new ways to do it—is a topic we cover often here on the APEX of Innovation. We’ve written about how to fuel growth with data, the five simple rules for effective data monetization, and how to turn data into a strategic asset. Below we look at the latest methods for monetizing data, and how this new and increasingly common practice can generate value for your company that stretches beyond revenue generation.
According to a recent Forbes article, “Monetizing data is about much more than simply selling it outright. Data has economic properties that enable it to be leveraged in ways other assets cannot.” Because data is a “regenerative” asset, meaning it does not get used up and often generates more data, the ways that companies can tap into its value are expanding. That’s good news for both companies that have advanced far in their monetization efforts and those just getting started.
According to the article, the methods for data monetization can be categorized into two distinct groups: direct and indirect. Direct methods deliver clear and measurable economic benefits, such as increased transactions and revenue—more on that later. Indirect data monetization methods generally focus on impacting business processes in a way that delivers economic impact, including reducing costs and increasing productivity. Examples of indirect data monetization methods include optimizing supply chains, improving customer service and loyalty, better identifying new markets, and spotting opportunities to reduce expenses.
Expanding Methods for Direct Data Monetization
As companies have become more accustomed to using data to generate new value, the number of direct methods for data monetization has expanded. However, while many companies understand the direct data monetization concept, few are truly ready to capitalize on it, according to the article. The reasons for this vary, but, in general, most companies are not set up to directly sell or license data to others. According to the article, data marketplaces and data aggregators, such as Dawex and the Data Exchange, can help by managing the marketing, sales, and sharing of data for a company’s direct monetization efforts.
Emerging ways for direct data monetization include “bartering or trading” data in exchange for goods and services that can benefit the company and its customers. A supermarket loyalty card that collects customer data on purchases and offers the customer a discount in return is just one example of data bartering. Other new methods include enhancing existing products and services with data that can justify a price premium and better position you against the competition, such as a bank offering customers a budgeting tool based on their typical expenses to provide a better customer experience.
If you’d like to learn more, including operational advice for data monetization success, read the complete Forbes article.