Jed Mole, European Sales Support & Marketing Leader, Acxiom writes…
It’s possible to be opportunistic and monetise data tactically, but to be a long-term winner brands must embrace ‘data monetisation by design’. A practical, structured plan should be followed to deliver that vision, blending short-term wins with long-term strategies to create significant, sustainable revenue streams.
More information can be found in the white paper ‘Data Monetisation by Design’, available at www.acxiom.co.uk
So, while not entirely new as a concept, ‘Data Monetisation’ is a relatively new term and is something rapidly gaining in importance. As recently as the last year our clients and partners have started asking for guidance in this area. For most businesses there are two obvious options to create incremental revenue:
● Better meet the needs of your customers to drive increased loyalty
● Help a third party better meet the needs of their customers.
Data monetisation typically happens in one of three ways:
● Inside-in: the marketer seeks ‘lazy’ data assets within the organisation and applies them creatively to drive new revenues
● Outside-in: the marketer buys third-party data to enable their strategies
● Inside-out: the marketer identifies powerful internal data that is of value to other brands.
Data monetisation is a new opportunity to open up revenue streams. The new hype is linked to technology changing consumer behaviour, media consumption and shopping habits.
Our point of view is: don’t let data monetisation just happen, instead pursue ‘data monetisation by design’. Brands that plan to use data strategically will outperform those that don’t.
Increased revenue usually flows because a consumer has at some point said ‘yes’, when the offer and experience reaches that individual in the right way at the right time. Marketers should first think about how they can better serve the consumer and work back to the data they need.
For most organisations the challenge of getting the data explosion in order can seem insurmountable, let alone working out ways to make money from it.
Most businesses reach a point where doing the same thing will only result in stagnation. They have two choices: become leaner to maintain profitability, or diversify. Diversification is inherently challenging, but strategic monetisation of your data asset can provide a strong revenue opportunity.
We suggest a five-step plan to implement data monetisation by design:
Step 1: If you intend to build data products to make money, the consumer is king; make sure you understand them. Create a consumer data ‘sandpit’ for your data analysts to work from.
Most organisations have pockets of data that are neither known about nor exploited – you need to find them. Simultaneously, understand and consolidate your existing assets. Find the hidden relationships between data items, but remember to be guided by data privacy and compliance laws.
Data ‘hides’ in customer services, in market research and product surveys; the list goes on. The marketer needs to explore their own business for potentially powerful sources of data. A formal data audit, with the help of a trusted third party, can be highly effective. The more you know about the audience, the more value you can ascribe to data products.
Then, consolidate data it into an analytical view. Consider how much data there is, whether it’s structured, permissioned and connected to an individual consumer.
Ultimately, the combined effect of disparate data should fuel more engaging conversations.
Step 2: Based on the outcome of the audit you can determine some potential uses of your data. The consumer must be front of mind when thinking about how to better meet their needs, through a better product or smarter service, or more intelligent, relevant marketing.
A creative mindset is required to focus on what data and application could enable the marketer to stand out.
Having developed a deep understanding of your audience, and how and what they buy, you now have the opportunity to monetise data more strategically. Attempt to make it simple for your buyer by using your expertise to create something they can buy: a data or insight product or solution. Data products should be developed in parallel with a business plan and sales strategy to ensure they generate a return.
Step 3: Focus your attention on the opportunities that are likely to generate ‘efficient revenue’. Take your existing data assets and package them for sale. Basic CRM principles also apply in this step, set out in another Acxiom model, the 5R’s of Marketing: Recognise your audience, deliver Relevant content at the Right time, be Responsive and nurture engaging Relationships. With the aid of a solid analytics programme and the data, you will drive incremental return.
Step 4: Having created a regular and profitable revenue stream, your business ought to be more willing to fund the expansion of the data monetisation programme, but you’ll require fresh data.
Planning is key when you are trying to build a data asset that not only fuels your own marketing but also the expansion of your revenue-generating portfolio by taking data products and services to market.
At numerous points in your journey, you will identify potential data streams. When evaluating these, you need to ask yourself:
● What data are consumers creating?
● Is there an application for the data?
● Is there a market appetite for it?
Step 5: At this point you might want to consider what you can do with data you have not already productised. Again, it is important to consider what the market needs and how it wants it packaged.
Alternatively, you could release your data products for general consumption under licence and let the market determine their value. Using this methodology, at little cost, you could publish your unused data into the marketplace as well as your existing data products, then monitor usage and performance to determine a price point going forward.
Data monetisation is related but quite different to the ‘business as usual’ practice of using data to win and manage customer relationships. There’s little doubt those brands that really make data monetisation work stand the best chance of being the winners.
Consumers better engaged and served through well-intended and well-managed data monetisation-enabled marketing will buy more and be more loyal going forward. Design your data monetisation for success and you will achieve it.
More information can be found in the white paper ‘Data Monetisation by Design’, available at www.acxiom.co.uk
Jed Mole, European Sales Support & Marketing Leader, Acxiom