What is data monetization?
Data monetization creates a positive and quantifiable impact on business revenue. Besides, data monetization seems to correlate with the industry-leading performance[i].
Who wouldn’t like that?
Data monetization can be done either directly or indirectly, depending on the wanted business outcomes and underlying strategy.
Besides selling your data or insights from your data to third parties, data monetization can be divided into two areas:
- use of data to drive cost-efficiency and savings, and data affecting the bottom-line impact
- use of data to create new revenue models and revenue streams and data having a top-line impact
However, before this becomes possible, your company should build a data-driven culture across the whole organization and a functional data-operating model.
Re-engineering your business around data analytics
There is no effective data monetization without data analytics. Most respondents of a McKinsey report on data monetization agreed that the main objective of their data-and-analytics activities is to create new revenue. [ii]
To capture a revenue opportunity, the insights from data analytics help companies to decide what way of data monetization is the best in the given context. Otherwise, it would be much more challenging to understand the business issue and which data could be leveraged to improve the performance.
Finally, it is important to develop data monetization strategies that are automated, repeatable, and scalable across the company and the surrounding, broader data ecosystem. This can not only save many hours poured into solving difficult problems but also create new, flourishing partnerships.
What to know before starting data monetization: Qualities and actions raising information’s value
Before engaging in data monetization, you should note that some attributes in data, such as its completeness, security, and uniqueness, among many others, increase information’s value, and can provide better monetization opportunities.
Some of these qualities are directly considered when valuing information using different valuation methods, such as Business Value of Information, when the relevance, validity, completeness, and timeliness of data increase its value for the business.
However, one company rarely gets all the necessary data permitting advanced strategical decision-making only from within their organization. Therefore, companies benefit from having a strategic data management plan paying attention to the actions that can raise information’s value. These actions can be done either internally or externally, with cooperation in the broader ecosystem.
Data monetization in action
Smart city initiatives focusing on sustainable transport, mobility, and logistics solutions can use traffic data to find sustainable, low emission solutions and implement new services.
Mobility-as-service-solutions, such as Kyyti by Kyyti Group, provide on-demand ridesharing capabilities by integrating all mobility modes in one platform. Users have the freedom to plan and locate routes, schedule on-demand or recurring trips, travel wherever at any time, and pay using only one app.
Another innovative data monetization example comes from ResQ Club, a company aiming to reduce food waste. They do that by providing a proprietary location-based mobile and web service that enables consumers to find and rescue surplus food in their proximity. In that way, ResQ turns the lost revenue from the partnering restaurants- grocery stores’ and café’s unsold food into an extra revenue stream.
Summary: Seize your data!
Despite the increased growth of the data economy, data monetization efforts remain relatively new, and out of the companies that have begun monetizing data, most have only started doing so in the past few years.[iii]
Data monetization positively impacts both the bottom-line and top-line of a business: intelligent data monetization will help organizations drive disruptive changes that will directly benefit the organization and its customers by enabling unique services and products while reducing unnecessary costs.
New megatrends shaping business models and customer behaviours, such as digitalization and circular economy, are great opportunities for data monetization. In addition, the ability of data to fuel new technology such as AI, IoT and blockchain is going to increase dramatically in the next few years. This creates data monetization opportunities that will be seized by early birds. So, seize your data!
To read more about unlocking the value of your data, you can read our previous articles or search our website and social media for #dataenabledbusiness!