Innovate your data. Use a monetization strategy.

What is data monetization? According to McKinsey, it is the process of using data to increase revenue, which the highest performing and fastest growing companies have adopted and made an important part of their strategy. Internal or direct methods including using data to make measurable business performance improvements and informed decision making. External or direct methods include data sharing to gain beneficial terms or conditions from business partners, information bartering, selling data outright, or offering information products and services (Definition of Data Monetization — IT Glossary | Gartner).

How to deploy a data monetization strategy

There is no clear-cut answer how a data-driven product generates revenue, or when that is appropriate. And there will, of course, be some products that never monetize.

www.d8a.eu

Having a strategy will deliver guidance. A data monetization strategy is, simply put, a plan to generate revenue for data-driven products. Like with any plan, it guides and brings structure. It is not something that is fixed — it should be flexible enough to develop with the product, the market the product exists in and its users. Goals can and will change over time, and so strategies need to evolve to continuously achieve the goals they’re designed to target. Data products can be based on loyalty & subscription models or a on-time purchase model. It is important to understand at the beginning of the strategy which model(s) the data can leverage to create focus and scalable results.

Data monetization strategy must be built upon the following pillars:

* Understanding how data can be converted into value (see below) and the associated opportunities and challenges of data-based value creation;

* Strategic insights into improving and preparing data to support monetization;

* Strategic insights in the potential value, markets and ecosystems.

Opportunities for monetization

Indirect monetization includes data-drive optimization. This involves analyzing your data to gather insights in opportunities to improve business performance. Analytics can identify how to communicate best with customers and understand customer behavior to drive sales. Analytics can also highlight where and how to save costs, avoid risk and streamline operations and supply chains.

“Having a full understanding of monetization possibilities will help to keep an open mind.”

Direct monetization of data is where things get interesting. It involves selling direct access to data, e.g. to third parties or consumers. This can be in raw form (heavily anonymised due to privacy regulations), aggregated, metadata only or transformed into analysis and insights.

Data-as-a-service

Insights-as-a-service

Ecosystems-as-a-service

Analytics-as-a-service

Having a full understanding of monetization possibilities will help to keep an open mind. Where many companies are focusing on analytics products & services, there are more opportunities! Always stay within legal & ethical boundaries, but explore all opportunity formats to grasp new markets.

--

--

D8A challenges the status quo and drive progress. We don’t deliver what companies ask, we deliver what companies need! Our views are our own. Go to: www.d8a.eu.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
D8A Directors

D8A challenges the status quo and drive progress. We don’t deliver what companies ask, we deliver what companies need! Our views are our own. Go to: www.d8a.eu.