Data monetization is being seen as the next big revenue stream for brands, allowing companies to leverage the data they already to maximize value for the business and its customers.
You might be wondering how data monetization can benefit your organization, and what role a customer data platform (CDP) can play to help elevate your data monetization strategy. Here, we’ll cover some specific strategies, and how a customer data platform can help provide the foundation you need to get started.
Data Monetization Basics
There are two categories of data monetization: direct data monetization and indirect data monetization.
Direct data monetization involves the collection and storage of data before it’s sold to customers. Indirect data monetization involves the internal use of a company’s data to generate business insights.
Direct Data Monetization
The three types of direct data monetization are: Data-as-a-Service, Insight-as-a-Service, and Analytics-as-a-Service.
- Data-as-a-Service: Data-as-a-Service provides access to a set of raw data. The data is neither processed, aggregated nor summarized. Think of it as access to particular rows or columns in a relational database. To make use of this raw data, customers need to provide their own analytics capabilities.
- Insight-as-a-Service: Insight-as-a-Service adds a layer of processing on top of raw data. Insights can include summarized data, analytical insights, and predictive insights.
- Analytics-as-a-Service: Analytics-as-a-Service provides more capabilities on top of what’s available from Insight-as-a-Service. It can include data visualization tools with predetermined dashboards, reports and charts. It can also provide business intelligence tools that enable customers to create customized reports and dashboards.
Indirect data monetization
Indirect data monetization involves broader use cases that are less neatly defined by particular categories.
Let’s consider a few examples.
- Improving patient care: Kaiser Permanente analyzed patient data to improve how its doctors and staff assist them. During the pandemic, usage of their telehealth system saw an all-time high. With only one-in-four health systems having 25 percent of their patients using telehealth, they stood out from their competitors.
- Improving products for a B2C brand: A Japanese retailer wanted to leverage data from its consumer-focused daily necessities site. The retailer launched a marketing lab to make data available to CPG partners selling on its B2C website. The lab used connected first and-second-party data to better understand customers’ perceptions, interests, and buying habits. This helps brand partners understand how to improve products in terms of packaging, pricing, and product extensions.
- Sharing shopping data with merchants and suppliers: Retail giant Walmart has a data platform called Walmart Luminate. It collects and identifies shopper patterns and relays those patterns to merchants and suppliers. Since using Luminate, Walmart has seen a 75 percent increase in e-commerce revenue growth, and a 50 percent growth in the number of suppliers working with them.
Overcoming Data Monetization Challenges
Now that you understand the basics, how do you get started?
Establish a Data Foundation
The first step is to get your data foundation in order (i.e., your data strategy, design and technical architecture). This foundation helps you build your internal business case, which includes details on the technology platform needed to support data monetization.
A CDP can help companies achieve data monetization success by unifying sources of data across first, second, and third-party sources. Accessing first-party data is a challenge when distributed across different customer touch points, such as websites, apps, social media sites and more. A CDP can not only consolidate information siloed across systems, it can also manage the often-complicated and murky waters of privacy regulations. By sharing this data with trusted partners, you can generate profits, monetize owned data, and improve business relationships.
Develop an Iterative Approach
With technology, recognize that “perfect” can be the enemy of “good.” While technology-related challenges can doom a data monetization initiative before it begins, recognize that these challenges aren’t unique to your business.
Don’t let technology challenges impede your progress to a successful data monetization strategy. Data monetization should be an iterative process – one that’s measured in small steps, rather than a giant leap. Consider a phased approach, where you test the waters first with indirect data monetization. This can serve as a testing ground on internal customer data use cases before you launch services externally via direct data monetization.
Find the Right Partners
Next, look for non-competitive partners in the data ecosystem. Partners can provide complementary applications and tools. Specialized data providers can give you access to unique and proprietary data sets that you don’t have today. Don’t forget your existing customers and partners, who can help augment, enhance, and enrich the data you provide.
Getting Started with Data Monetization
A CDP can unify sources of data across first, second, and third-party sources. A CDP can cleanse and enrich data into unified customer profiles and provide a platform that’s agile and easy to scale with new data sources.
Beyond technology, data monetization success also depends on having the right organization and talent, establishing a data and analytics culture and finding the right partners.