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What is data monetization

Exploring Data Monetization

In today’s digital age, data is akin to hidden treasure. While most items in our homes might be of little value, corporations often possess invaluable data assets that remain untapped. Data has emerged as a pivotal corporate asset, yet many businesses overlook its potential for monetization. This article delves into the essence of data monetization, its significance, and effective strategies.

Defining Data Monetization

Data monetization involves leveraging organizational data to yield tangible economic benefits. Giants like Amazon, Facebook, and Google have capitalized on their data, inspiring businesses across sectors to explore their data’s potential.

There are three primary methods to monetize data :

Licensing or Selling Data

Your data might be more valuable to others than to you. By licensing or selling it, you can reap economic benefits. For instance, Highways England realized the worth of their traffic data to delivery services and navigation apps, transitioning from offering it for free to selling it.

Internal Optimization:

Monetization isn't limited to external sales. Data can enhance internal operations, leading to cost savings, better customer understanding, and innovative revenue streams. For example, UK construction firms use data to enhance safety and predict factors causing delays, thereby optimizing costs and operations.

Data Exchange with Partners:

Some businesses monetize by sharing data with partners in exchange for other benefits. However, this guide will primarily focus on the first two methods.

Why Monetize Data?

Monetizing data is crucial for contemporary success. Here are four compelling reasons:

  • Value of Intangible Assets:

    Today, intangible assets, including data, account for 90% of corporate value.

  • Future of Data Asset Trading:

    Monetizing data not only offers immediate economic value but also prepares businesses for future data trading opportunities.

  • Competitive Advantage:

    Data monetization can provide an edge over competitors, especially in saturated markets.

  • New Revenue Avenues:

    Monetizing data can introduce new revenue streams, bolstering growth.

Crafting a Data Monetization Strategy

Monetize UAE believes that a successful data monetization strategy comprises five essential elements:

  • Recognize Data's Value:

    Understand how data aids strategic initiatives and the value it generates.

  • Identify Arbitrage Opportunities:

    Find data that might be more valuable externally.

  • Determine External Value:

    Understand who values your data externally and its potential worth.

  • Evaluate Monetization Costs:

    Understand the costs associated with delivering high-quality data for sale.

  • Manage and Deliver Data:

    Ensure effective and value-driven data delivery to buyers.

Introducing Data Asset Management

To truly monetize data, one must embrace data asset management. This approach treats data as a strategic corporate asset. By managing data like tangible assets, businesses can overcome barriers to data monetization. A data asset management perspective allows businesses to view data in a broader business context, facilitating understanding of data’s organizational significance and monetization opportunities.