Data Selling Business Model: Setting Up Your Business

In today’s data-driven world, companies are increasingly turning to data monetization as a lucrative business model. By capitalizing on their data assets and selling valuable insights, businesses can unlock new revenue streams and gain a competitive edge.

Data monetization involves the strategic and responsible selling of data to interested parties, such as data brokers, data marketplaces, or directly to other businesses. It encompasses various approaches, including data brokerage, data commercialization, and operating a data exchange platform.

Monetizing data assets offers numerous benefits for organizations. It allows them to generate incremental revenue, identify consumer trends, improve decision-making, and build valuable partnerships based on data-driven insights.

To succeed in the data selling business model, it’s essential to develop an effective data sales strategy. This involves understanding the value of your data, identifying potential buyers, ensuring data privacy and security, and establishing clear terms and conditions for data usage.

Key Takeaways:

• Data selling business models offer the opportunity to monetize data assets and uncover new revenue streams.
• Developing a solid data sales strategy is crucial for success in the data monetization market.
• Understanding the value of your data and identifying potential buyers are essential steps in the process.
• Data privacy and security should be prioritized to maintain customer trust.
• Establishing clear terms and conditions for data usage is essential for transparent business operations.

What Is Data Monetization?

Data monetization involves leveraging company-generated data to gain an economic advantage. Whether it’s boosting revenue, cutting costs, or forging valuable alliances, businesses are increasingly harnessing their data assets to drive tangible benefits. Companies like Facebook and Google have pioneered the data monetization wave by amassing extensive data assets and offering data-centric services to other businesses on a broader scale.

Why Data Monetization Matters

Data monetization has become critical for businesses due to its potential to unlock new revenue streams and gain a competitive edge in the market. By effectively leveraging data, companies can optimize their operations, enhance customer experiences, and create innovative products and services.

Data monetization can take various forms, including:

• Selling consumer data to advertisers or marketing companies
• Providing data-driven insights to other businesses
• Creating data products or platforms

By capitalizing on the vast amounts of data they collect, companies can generate additional revenue and improve their overall business performance.

Benefits of Data Monetization

Data monetization offers numerous benefits for businesses, including:

• Increased revenue: By monetizing data, businesses can generate new streams of income, diversify their revenue sources, and tap into previously untapped markets.
• Cost efficiency: By optimizing operations and making data-driven decisions, companies can reduce costs and improve resource allocation.
• Improved customer experiences: Data monetization allows businesses to gain valuable insights into customer behavior, preferences, and needs, enabling them to deliver personalized and targeted experiences.
• Competitive advantage: Effective data monetization strategies can set businesses apart from their competitors by enabling them to make informed business decisions, identify emerging trends, and respond quickly to market changes.

Example: Data Monetization Platforms

One example of a data monetization platform is DataXu, a leading provider of programmatic marketing software. DataXu enables businesses to leverage their data to enhance their advertising campaigns by delivering personalized, relevant ads to the right audiences at the right time.

Another example is LiveRamp, a data connectivity platform that helps businesses unlock the value of their data assets. LiveRamp enables companies to securely connect their data with trusted partners, ultimately driving better customer experiences and business outcomes.

Table: Key Players in Data Monetization

Data monetization is a growing trend that is reshaping the business landscape. As companies continue to collect and analyze vast amounts of data, finding ways to monetize it effectively will be crucial for long-term success.

Data Monetization Methods

When it comes to data monetization, businesses have a few methods at their disposal. These methods can be classified into two main categories: internal data monetization and external data monetization. Let’s take a closer look at each.

Internal Data Monetization

Internal data monetization focuses on leveraging insights derived from internal data to enhance operational efficiency and profitability. By analyzing and utilizing their own data, companies can make informed decisions and optimize various aspects of their business.

Some key areas where internal data monetization can be applied include:

• Refining marketing efforts: By harnessing customer data, companies can develop targeted marketing campaigns, personalized offers, and tailored messaging to increase customer engagement and drive sales.
• Spotting upselling opportunities: Internal data can help identify cross-selling and upselling opportunities, allowing companies to maximize revenue from existing customers.
• Optimizing the customer journey: Through data analysis, companies can identify pain points in the customer journey and make improvements to enhance customer satisfaction and retention.

By effectively utilizing their internal data, companies can unlock valuable insights and drive business growth.

External Data Monetization

On the other hand, external data monetization involves creating data-driven products or services for third parties. This can open up additional revenue streams for businesses by capitalizing on the high demand for data insights.

Examples of external data monetization methods include:

• Specialized reports: Companies can generate detailed reports based on their data analysis and offer them to interested parties seeking industry insights and trends.
• Unique datasets: By aggregating and anonymizing their data, companies can create valuable datasets that can be sold to businesses in need of specific information.
• Insights from customer interactions: Companies can extract valuable insights from customer interactions, such as sentiment analysis or behavior patterns, and offer these insights to businesses looking to enhance their customer experience.

External data monetization allows businesses to not only generate additional revenue but also establish themselves as a trusted source of valuable data.

Both internal and external data monetization methods have their own advantages and can be tailored to suit different business needs. To fully capitalize on the potential of data monetization, companies should consider adopting a multi-faceted approach that leverages both internal and external data monetization strategies.

Types of Data Monetization

When it comes to data monetization, companies have two main approaches: direct data monetization and indirect data monetization. Each approach offers unique benefits and opportunities for businesses looking to leverage their data assets for financial gain.

Direct Data Monetization

Direct data monetization involves collecting and marketing company data to third parties, either in its raw form or after it has been processed for immediate insights. This approach allows businesses to directly generate revenue from their data assets by selling them to interested buyers.

There are different methods of direct data monetization, including:

• Data-as-a-Service (DaaS): Companies provide access to their data through a subscription-based model, offering real-time or periodically updated data feeds to customers.
• Insight-as-a-Service: Companies analyze their data to generate valuable insights and sell these insights to third parties.
• Analytics-as-a-Service: Companies offer data analytics services, using their expertise to analyze customers’ data and provide actionable recommendations.

Indirect Data Monetization

Indirect data monetization focuses on using data internally to optimize business performance and improve operational efficiency. While this approach doesn’t involve selling data directly to third parties, it helps businesses capitalize on the value of their data assets in various ways.

Some examples of indirect data monetization strategies include:

• Refining marketing efforts: Businesses use data analytics to gain insights into customer behavior, preferences, and purchasing patterns. This information can then be used to create targeted marketing campaigns that drive revenue growth.
• Spotting upselling opportunities: By analyzing customer data, businesses can identify upselling opportunities and tailor their offerings to increase sales and revenue.
• Optimizing the customer journey: Data analysis can help businesses identify pain points in the customer journey and make improvements that enhance customer satisfaction and loyalty.

Both direct and indirect data monetization strategies offer businesses the opportunity to unlock the value within their data assets. The choice between the two approaches depends on the specific goals and priorities of each business. Some companies may opt for direct data monetization to generate immediate revenue, while others may focus on indirect data monetization to enhance operational efficiency and drive long-term growth.

How to Prepare Your Company for Data Monetization in 6 Key Steps

To prepare your company for data monetization, it is essential to follow a systematic approach. Implementing the following six key steps will help you unlock the full potential of your data assets and pave the way for successful data monetization.

1. Step 1: Understand Your Data

Start by conducting a comprehensive assessment of the data your company generates. This includes internal data collected from various departments, customer data, and external data sources. Determine what types of data you have, their quality, and how they can be leveraged to create value.

2. Step 2: Learn from Trailblazers

Study successful data monetization strategies implemented by industry leaders. Analyze their approaches, challenges, and best practices. This will provide valuable insights and help you avoid common pitfalls along the way.

3. Step 3: Leverage Established Solutions

Utilize existing data monetization platforms, tools, and technologies. These solutions can streamline data integration, analysis, and commercialization processes, saving you time and effort. Look for reputable providers that align with your specific needs.

4. Step 4: Harness Data as an Operational Advantage

Integrate data-driven decision-making into your company’s operational processes. Encourage data literacy and create a culture that values data-driven insights. This will empower employees to utilize data effectively and drive better business outcomes.

5. Step 5: Ensure Leadership Support

Data monetization requires a top-down commitment from company leadership. Secure executive sponsorship and establish clear goals and performance metrics. This will foster a data-driven mindset across the organization and ensure that data initiatives receive the necessary support and resources.

6. Step 6: Invest in the Right Tools and Technologies

Select and implement data analytics and data management tools that align with your data monetization strategy. This may include data cleansing and enrichment tools, data visualization platforms, and advanced analytics solutions. Investing in the right tools will enable efficient data processing, analysis, and monetization.

By following these key steps, you can position your company for success in the data monetization landscape. Remember, data monetization is an ongoing process that requires continuous refinement and adaptation to evolving market demands.

B2B Data Monetization

B2B data monetization is a process where one company sells data to another, enabling businesses to leverage valuable insights and drive strategic decision-making. This data exchange is facilitated through professional data provider companies, often referred to as data-as-a-service (DaaS) companies. Traditionally, DaaS companies have been the primary players in the B2B data monetization market, offering specialized data products and services to organizations in need. However, as the importance of data monetization continues to grow, more and more businesses across industries are recognizing the potential of monetizing their own internal data assets and becoming DaaS companies themselves.

Benefits of B2B Data Monetization

Engaging in B2B data monetization can yield several advantages for both the data seller and the buyer:

• Revenue Generation: Selling data to other businesses can be a lucrative source of additional income for organizations that have valuable data assets.
• Partnerships and Collaborations: B2B data monetization can foster strategic alliances and partnerships between companies, leading to mutually beneficial relationships.
• Market Expansion: By sharing data with other organizations, businesses can tap into new markets and reach a broader customer base.
• Data-driven Innovation: Access to quality data from external sources can fuel innovation and drive the development of new products, services, and business models.

Implementing B2B Data Monetization

Successful B2B data monetization requires careful planning and execution. Organizations looking to embark on this journey should consider the following steps:

1. Evaluate Data Assets: Assess the value and potential of your internal data assets to identify those that are marketable to other businesses.
2. Data Governance: Establish robust data governance practices to ensure data quality, compliance, and privacy when sharing it with external entities.
3. Data Packaging: Determine the optimal form and format to package and deliver your data to potential buyers, providing them with the relevant insights they seek.
4. Data Monetization Strategy: Develop a comprehensive strategy that outlines your pricing model, target customer segments, and go-to-market approach.
5. Infrastructure and Security: Invest in the necessary infrastructure, tools, and security measures to store, process, and protect your data assets throughout the monetization process.
6. Continuous Improvement: Regularly evaluate and enhance your data monetization strategy based on feedback, market trends, and evolving customer needs.

By following these steps and leveraging the power of B2B data monetization, businesses can unlock the full potential of their data assets, forging new revenue streams and gaining a competitive edge in their respective industries.

Consumer Data Monetization

Consumer data monetization offers individuals an opportunity to generate additional income by selling their own data. By sharing insights about their online activity, purchases, and mobility, individuals can tap into the growing market for monetizing consumer data. Companies like Solipay and Reklaim provide software solutions that enable consumers to sell their data while ensuring privacy and obtaining consent.

Consumer data holds significant value across various use cases, including product development and targeted marketing campaigns. Businesses can leverage consumer data to gain valuable insights into consumer behavior, preferences, and trends, allowing for more personalized and effective marketing strategies. Additionally, consumer data can be instrumental in enhancing product offerings and improving customer experiences.

Benefits of Consumer Data Monetization:

• Additional income for individuals
• Improved understanding of consumer behavior
• Enhanced personalized marketing campaigns
• Optimized product development and customer experiences

Enabling consumers to monetize their data is a mutually beneficial arrangement, empowering individuals to take control of their data while providing businesses with valuable insights. As the demand for consumer data continues to rise, it’s essential for individuals and businesses to navigate this landscape responsibly and ethically, ensuring that privacy and consent remain a priority.

Most Common Data Categories Sold

When it comes to data monetization, certain data categories have proven to be particularly valuable. Companies across various industries are actively selling geospatial data, B2B data, and commerce data. Each of these data categories serves a unique purpose and offers valuable insights to businesses looking to drive growth and make informed decisions.

1. Geospatial Data

Geospatial data provides valuable insights about the location of individuals, vehicles, products, and buildings. This data category is essential for a wide range of industries, including logistics, transportation, real estate, and urban planning. By leveraging geospatial data, businesses can optimize routing, improve supply chain management, and enhance customer experiences.

2. B2B Data

The B2B data category includes firmographic data and transactional data. Firmographic data provides information about businesses, such as their size, industry, revenue, and location. Transactional data encompasses data about business transactions, including purchase history, order details, and customer interactions. B2B data is highly valuable for market research, lead generation, and identifying business opportunities.

3. Commerce Data

Commerce data includes information about purchasing behavior and trends. This data category helps businesses understand consumer preferences, buying patterns, and market dynamics. By analyzing commerce data, companies can optimize their marketing strategies, personalize customer experiences, and develop new products or services that align with market demands.

These three common data categories, geospatial data, B2B data, and commerce data, provide businesses with valuable insights and opportunities for growth. By leveraging these data assets effectively, companies can gain a competitive edge in their respective industries and unlock new revenue streams.

Who Can You Sell Your Data To?

When it comes to selling your data, the potential buyers can vary depending on the industry and use case. Here are some key entities that you can sell your data to:

Ecosystem Partners

Your ecosystem partners, such as suppliers, distributors, or other businesses within your industry, may find value in the data you have. Data sharing within a trusted ecosystem can foster collaboration and drive mutual benefits.

Third-Party Customers

There are various third-party customers, including research firms, marketing agencies, and other organizations that may be interested in purchasing your data. These customers often rely on data to gain insights, refine their strategies, and make informed business decisions.

Unrelated Businesses

Even businesses outside your industry may find value in your data. For example, a retail company’s purchase history data can be valuable for a healthcare provider looking to analyze consumer behavior. Exploring these opportunities can open up new revenue streams.

When selling your data, it is essential to establish Know Your Customer (KYC) practices. KYC allows you to verify the identity of your customers and ensure compliance with privacy regulations, protecting both your business and the individuals whose data you hold.

By identifying potential buyers and implementing appropriate data governance measures, you can unlock the value of your data assets and create profitable partnerships.

Conclusion

In conclusion, the data selling business model presents a lucrative opportunity for companies to generate revenue and gain a competitive edge. By establishing data leadership, companies can harness their data assets and target critical customer needs, paving the way for success in data monetization. It is crucial to foster a creative and independent culture that encourages innovation and exploration in leveraging data for business growth.

To navigate this evolving landscape, companies should adopt proven strategies and leverage the right tools and technologies. This includes understanding the data generated, learning from industry trailblazers, and investing in solutions that enable effective data management and analysis. By doing so, companies can tap into the growing market for data monetization and unlock new revenue streams.

As the demand for data-driven insights continues to grow, businesses must be proactive in capitalizing on their data assets. With a solid data monetization strategy, companies can not only outpace their competitors but also discover new revenue opportunities and drive overall business growth. Start building your data selling business model today and seize the potential offered by the exciting world of data monetization.