Basics Of Monetizing Data
The Three Things Required
Data Monetization was all the rage. Like many over-hyped and poorly understood concepts, it is fading fast. No worries, like many over-hyped and poorly understood concepts — it will return. Perhaps re-branded…
Let’s break this down a bit.
If your company is the source of some terrific data, you have your hands on a valuable asset. Data monetization should be an incredibly lucrative concept for you, assuming you understand it. I emphasized a few concepts there — let’s wait on those just a moment.
No Dumping Allowed
Let’s talk first about what data monetization is not. It is not a dump truck. It has nothing to do with an A$ap Ferg song. In fact, anything that remotely connects this process to dumping will likely make it worthless.
So no (and know), you can’t just collect up as much data as you can find — dump it in an (aptly named) DMP — and start raking in the money. A few companies get away with that for a while, but those days are well behind us.
The World Is Full Of Bad Data, No One Is Paying For Yours
Sourcing It
Your data is most valuable when you are the actual source. That can mean you are the platform that activities occur on, that you are conduit where user share their data, or that you literally create the data from user activity. So source is a broad concept. Data you collect without customer consent, knowledge, or action is not sourced by you. It is also some of the weakest data available. Never pay for it. Good luck charging for it.
TeRriFIC Data
Data needs to be terrific — that is TRFIC; trusted, recent, frequent, impactful, and connected. I have written on this subject before:
We developed the acronym shortly after. In a nutshell, your data needs to fresh, well connected to the customer, and have good integrity/quality to be monetizable. People will test it. If it doesn’t help, most won’t pay for it very long. Gone are the days of massive data contracts for weak sources providing little to no lift… ok, not completely but the sun is setting.
You Need To Understand How Data Is Monetized
Zuckerberg wasn’t lying… mostly. Facebook doesn’t really sell data. They sell access to a data empowered platform, where data is often available to be siphoned out. Trust me, Facebook didn’t intend that part. They are practicing indirect monetization.
Direct monetization means you actually sell data, typically for pennies. It is an archaic model that dates back to the giant mailing lists of last century. It carries back at least as far as mail order, perhaps farther. Few companies simply sell data anymore. Those that do most often control their data by only making it available via API calls. It is sort of quasi-direct.
Most companies tie their data to platforms and add-on services. Others barter it to partners. These companies monetize their data via indirect methods. These tend to be easier to control, secure, and sell. Think of credit bureaus, fraud screens, demographic overlays, or list hygiene products. Other initiatives include cross-sell initiatives. Some archaic companies still “sell their lists”, but they are a dying breed with pissed off customers.
So there you have it. Source your data. Be sure it is terrific (fresh and clean). Work to monetize it — indirectly, it is easiest. Be careful of third parties and others looking to dump. And thanks for reading!
