Data is poised to become the most valuable resource in the world. Through a unique combination of data collection, warehousing, and analysis, companies are finding ways to tackle complex problems. It’s clear that large companies are benefiting from the informational and monetary value of data, but what’s unclear is why the average consumer isn’t.
Data Monetization – Understanding the Value
In short, data monetization is the act of turning data into revenue. There are two general outlooks on data monetization. The first is physical exchange, which means selling data for something of economic value, like cash. The second regards using data for improved decision making. Both make data valuable, but the latter of the two takes the cake. According to IDC, worldwide revenues for big data and business analytics are likely to grow from a $150.8 billion in 2017 to a $210 billion industry in 2020. The growth potential of the data economy is astronomical, but it’s not without merit.
In a survey done by Mckinsey, nearly half of all respondents said that data and analytics have significantly or fundamentally changed business practices in their sales and marketing departments, and more than one-third say the same about R&D. Although the applications of data and analytics have been most prevalent in the tech, media, and telecom spaces, industries across the board are adopting analytical practices in search of a competitive edge. What it all comes down to is this; data is a strategic asset that can be leveraged in an economy dependent on information.
Public Participation – Can Individuals Monetize Data?
Companies are operationalizing and selling data, but where does the consumer stand in all of this? Most of the conversations surrounding individual efforts of data monetization are focused on a consumer’s ability to sell data. In theory, this seems like a great idea, but in reality, it’s extremely tough. Useful data is determined based on an array of characteristics which include traits like sample size, cleanliness, and timeliness. Unless well versed in data and analytics, the average individual would have a tough time preparing a valuable data set; proper data preparation would be difficult for consumers, but not impossible.
The real obstacle to monetization for consumers is the lack of marketplace. There is no standard easy-to-use platform for individual data monetization; this is an issue that data enthusiasts like Ulrich Schober, CEO of DACONOMY have stressed. Furthermore, the current marketplaces for data exchange are limited. Companies like Databroker Dao only focus on sensor data, and even if individuals had access to such data, economies of scale are still at play. Consumers must have access to collective data-submission, adding their data into pools with other individuals. In doing so, the comprehensive dataset becomes more valuable, and the community of individuals who make it can profit.
The Future – What to expect for Data Monetization
As of now, the data landscape is centralized, some of the biggest beneficiaries of the data economy include companies like Facebook. Furthermore, many individuals don’t understand how valuable their data actually is. It’s a bit ironic, but the first step towards change will be access to information. Individual users must understand how valuable their data is, more importantly; that their data can be monetized. Widespread scandals like Cambridge Analytica and the Target security breach are bringing consumer-data conversation onto the forefront. Slowly but surely, consumers are learning about the power their data has. The second piece of the equation is dependent upon the creation of a marketplace, one where consumer data can be bought and sold efficiently. A few companies are working towards building these marketplaces, one of them is DACONOMY. DACONOMY is on a mission to create the world’s first universal decentralized data ecosystem for all types of data participants.
Some have compared the new data market to the once-booming oil economy; data is a resource that is mined, refined, and utilized for driving progress. As data creation and access increases, we’ll need to find new and innovative ways that enable consumers to participate in the data economy.