Big data monetization is a big topic. So much so, that it already has an extensive list of clichés you’ve probably come across. From “Big data is a commodity like oil,” to “90% of all data is not being utilized”. Instarea has been dealing with big data monetization for more than 5 years so we’ve heard them all and we think our explanation of this umbrella term is going to be easier to understand.
What is data monetization? Let’s explain quickly.
It is the process of selling or internally adding value to data accumulated in the organization instead of just storing or erasing it.
When researching this topic, the definitions and resources you find are a bit vague. This is due to the fact that this industry is young and companies don’t always disclose all they do with data. The result is, there aren’t many clear use cases shared with the public (as you can imagine some don’t go about data monetization ethically, but we’re talking only about regulated use of data that values everyone’s privacy). It is best to explain data monetization with a specific example and thankfully Instarea has a few that we can use.
To begin we need data
A specific type of industry that started looking to utilize the vast volumes of data is the telecommunication industry. In one of the early projects at Instarea we were approached by Slovak Telekom (member of Deutsche Telekom Group). They were looking for ways to give their data value and transform it into new business opportunities and sources of revenue. So what was the data they were looking to monetize?
Slovak Telekom, and all telecommunication providers for that matter, store network data that gets created every time there is an event initiated by the user’s device or the network. These records are stored in massive databases (billions of rows) and contain information like the anonymized ID of the user, ID of the network station it was connected to, timestamp and other. This data is necessary for internal operations of the company such as billing, but due to its sensitive nature (information like the user ID), it cannot be used for much else and especially not for monetization. Privacy is of the utmost concern for obvious ethical reasons and also due to the strict oversight & regulation of the industry.
We make sure this data is usable
Because of the vastness of telco datasets, it’s important we anonymize & aggregate it first. At Instarea our Market Locator technology for the telco industry makes this easy. A solution architecture designed for data protection, we help the telcos ensure that client data stays secure where it belongs and that only aggregated insights (statistical pieces of information) are monetized.
There are a few obstacles on the road to monetization. Telco data being personal, we first need to ensure total privacy for the user. That is why we strip all personal information and only leave attributes that are valuable but cannot be used to match the record with a specific user. This ensures that the data entering the next stage is compliant with all the regulations, such as GDPR. This anonymized data can be used in the next stage where we identify value.
Fuse the data to make it valuable
We select parts of the data that have value potential. In the case of telco data, this is definitely the network station location from which we can calculate approximate locations of events. Of course, it’s not about a specific user’s location but rather the statistical information about all the users. This way, it is possible to identify places where multiple users have similar location parameters. Pair this with a map layer and you’re looking at a real-time map of your city which shows you population density over different neighborhoods or smaller parts such as shopping malls, office parks or recreational areas.
Even though we’ve already added value to the data by analyzing population density anonymously in near real time, why stop there? Telco data is rich so we can add attributes like age to be able to see age distribution within the city, but also wealth index, usage of mobile data and many others.
You’ve turned data into a product/service
Just like this telcos can create a product centered around data and offer it to municipalities to help them plan public transport routes, businesses to aid the decision-making process when opening a new branch and many others. These examples are real and in the case of Slovak Telekom their clients who use this data include organizations like Tesco, Billa, Raiffeisen Bank or Bratislava Integrated Transport.
Slovak Telekom is just one example. We have since implemented our Market Locator solution for telcos in Central Europe, Middle East and discussions are ongoing in South Africa, Canada and South East Asia.
There are many other data-rich industries that can harness their data. Just think what banks can do with their data to understand the market and the consumer better – data that can help every business deliver better products and services. But that’s for another day.
Feel free to contact us if you have any questions regarding data monetization or if you think you’ve heard a good cliché that we should know about 🙂 firstname.lastname@example.org