British mathematician and entrepreneur Clive Humby said in 2006 that “personal data is the new oil”. Most of us didn't understand what that meant at the time, but time has proven Humby right. Nowadays, we share countless information online, even during simple actions like playing online slots, shopping, or browsing the internet. You can understand how valuable this shared information is simply by looking at its own private industry. This industry, called data monetization, is literally monetizing our personal information.
If you think your new product appeals to men aged 15-18, for example, you can buy the data of this user group. This is a simple example of data monetization. The interesting thing is that we allow it: knowingly or unknowingly, we consent to the marketing of our personal information.
But we are going too fast: let's start with the basics first.Learn why businesses use data monetization and how using this method can help your business grow! Click To Tweet
What is Data Monetization?
The advancement of technology has made it possible to track everything we do, both physically and in the digital world. The simplest example of this is spending with our credit cards.
Even if you are not shopping online, when you use your card, you provide a lot of data. There are millions of users just like you, and when all this data is put together, it can easily come out which product, for example, men aged 30-35, buy the most in supermarkets.
It's even easier to gather information for online purchases and use it to build consumer personas.
Location and Browser Knowledge
When we click on a link on Facebook, buy a product, or even just visit a website, we share a lot of data.
Even if we do nothing on that site, the operating system we use, our location, and our browser are shared automatically. Even this data can be converted into money. Using them, for example, we can find out how many computer users in Lithuania are using the Firefox browser.
In addition to third parties, even the browsers we use to collect and sell data. All free browsers do this.
Collecting data was something companies did even before the internet, but monetizing this data is a practice that has emerged in recent years.
It is now possible to use data from a number of different institutions. For example, a bank could identify what you buy most with your credit card and offer you a special promotion for that product.
Know What Products to Restock
Today, data collectors use this information for themselves and offer it for sale. Let's go back to the credit card – bank example. Your bank can sell the data it collects directly to the supermarket and let the grocery store understand which products it needs to stock up on.
Let's say you want to develop a cosmetic product for women aged 18-20 with a monthly income of $2000. You can purchase the data of 100,000 people who fit this description to identify the right marketing model.
This data can tell you, for example, that if you promote your product with a particular influencer on a certain platform, it will be at least 60% more successful. This is incredibly detailed information and can make marketing campaigns much more effective.
Many companies are ready to pay a fortune for this information– this is the best example of monetization.