Last week we held a big data monetization webinar on our views of Big Data Monetization and the opportunities which lie in infonomics, or the economics of information. The monetization of corporate #bigdata is becoming a heavily debated topic which is drawing the attention of all telco and banking execs which are tasked with new business development.
Most see their company’s big data as a golden egg, however almost all lack the means to crack it open. I tried to share my view on how we at Instarea see the big data of corporations put to work, both for the good and profitability of the companies who have this data, as well as for the good of us as a society – thanks to the extensive insight present in the data these corporations behold. In this short article I outline how we believe data of a telco can be monetized as well as the what the near future of data monetization has in store for us. But first a couple quotes from Gartner:
- By 2020, 10% of organizations will have a highly profitable business unit specifically for productizing and commercializing their information assets. (Gartner)
- By 2020, only 50% of chief analytics officers will have successfully created a narrative that links financial objectives to business intelligence and analytics initiatives and investments. (Gartner)
- In a world of free, the hunt is on for such monetization ideas. More and more companies, for example, are exploring opportunities to sell to third parties or to create new services based on sanitized information (“exhaust data”). (Gartner)
The “Maslow” big data monetization pyramid
The road to cracking the big data golden egg starts at the bottom of our big data pyramid – with the identification and collection of data and the subsequent definition of potential use-cases applicable to this data. Then it’s about the ability to efficiently store and process the data, often vast amounts of it. This is where the typical buzz words and technology names kick in, when big data is mentioned – Hadoop, Clouder, MapR, Spark, Kafka, mongoDB, R, Python, QlikView, etc. In the context of monetization technology is just an enabler and should not overshadow the business use-cases that should be kept front & center.
Once the data & technology are in place data is typically put to work for internal use-cases. These are in the area of process optimization, sales, finance, customer support, risk management & mitigation, campaigning, marketing intelligence, product definition etc. Due to the rise of data centric management companies have been boosting their analytical capabilities and have been creating positions such as Chief data officers or Chief analytics officers.
The top two levels of the big data monetization pyramid are however reserved for the use of data to bring in new monetary value – external big data monetization. There are several possibilities to approach external big data monetization – sale of raw anonymized data, preparation of custom analytical reports, development of added value services on top of this data. It is this final option that has the largest botom line impact potential and thus the one I want to address further.
Path to #BigDataMonetization at Slovak Telekom, Orange and O2
The challenge: Major industries such as telecommunications and banking have been faced with declining ARPU (average revenue per user) from core services, market saturation and over the top disruption.
The opportunity: On the other hand these industries possess a wealth of data and insight into the characteristics and behavior of the mass population. They also have the channels which enable them to communicate with these customers in a broad fashion.
Telco companies have thus long known they posses a very unique and valuable data source but have been unable to tap into this resource with the exception of internal campaigning. Yet externally the monetization of data presents a multi-million Euro opportunity in a industry facing stagnating revenue from core services due to market saturation. At Instarea we teamed up with Slovak Telekom (Deutsche Telekom Group member) to pilot on the Slovak market the “Market Locator” solution and have now been also joined by Orange. It has been far more than successful and has paved the road for our understanding of the challenges & approaches to Big Data Monetization.
The process of big data monetization – from data identification to a market ready solution
The process at Slovak Telekom followed 4 primary steps, each a challenge in it’s own right. Till a final approach (which resulted in Market Locator) was selected several pivots and many itterations took place. Especially demanding is the phase in which you need to make sure yoou meet tough data privacy and data security regulations – not only for legal reasons, but also to remain transparent in how you store and process your customers data.
- Identification & gathering of data (structured, semi-structured), aggregate, store efficiently in an accessible format
- Efficiently store the big data -> use internal & external application create business case for technology
- Ensure maximum data security and anonymize / aggregate data (strict compliance with data and personal privacy)
- Combine for advanced analytics on population data to identify new opportunities, target audiences & insights
The outcome is a new business solution providing population analytics / location intelligence and targeted marketing in a self-service fashion, effectively allowing a bank or telco to emulate the business model of companies such a Google, Facebook or LinkedIn, who provide anonymized business insight & targeted marketing services on top of their user data.
Business potential of big data monetization
A key question each company will be addressing when deciding about their big data strategy will be the business case behind the external monetization of data. What will the service be? How accessible will it be to clients? Who will the clients be? … The approach we tool with Market Locator is that of a self-service targeted marketing and population analytics solution. This approach has shown to have a 20 Milion EUR net profit potential (botom line impact) for a telco with roughly 10 milion subscribers. That the market is vast is demonstrated on the size of the US mobile marketing spending which in 2015 was 42 bilion USD. The size of the location insights opportunity is estimated to be about 5 bilion USD.
The future of big data monetization
In our series of big data monetization articles we will continue in a next article to discuss our views on the future of big data monetization – the use for smart cities, smart municipalities, search and rescue, urban planning, disaster recovery etc. The social benefits that can be unlocked in the data of corporations should not be forgoten and these corporations should strive to provide access to these use-cases as well. Stay tuned 🙂
More thoughts on big data monetization
Watch the webinar with Matej Misik our Senior Consultant for Big Data Monetization and Director of Business Development at Instarea to see a live demo of Market Locator and to find out how your organization could be impacting the bottom line at near-zero cost. Find out how you can revive SMS & mobile marketing & present yourselves as innovative leaders in data analytics and targeted marketing. We covered the key legal, technical and business issues you may face en route to data riches.
Source / Youtube.com – https://www.youtube.com/watch?v=LbAyueI1zXE
Also, go ahead and read some of our other blogs on big data monetization or get in touch with us me at firstname.lastname@example.org and we can discuss in much more detail.
- What data monetization can bring: Market Locator – The success of 2016 in facts & numbers
- Value of big data: our views on how location intelligence and targeted marketing give value to corporate big data
- Big data monetization at Deutsche Telekom’s Big Data Days
- Our Market Locator solution as Deutsche Telekom’s group prefered solution for targeted marketing and footfall analytics
CV of Matej Misik
Matej is a director & senior business consultant at Instarea focusing on big data monetization and application in the fields of population analytics / location intelligence and targeted marketing. During the past 3 years he has driven the development of Market Locator – a solution specifically for big data monetization together with Slovak Telekom. As a business consultant he has gained broad insight into the telecommunications, banking & healthcare industries. Connect with Matej on LinkedIn.
Instarea is a “laboratory” for innovative greenfield ideas within the international Adastra group with focus on internal and external data monetization. Their latest creation is the Market Locator big data monetization solution which brings together the worlds of population analytics / location intelligence & targeted marketing in one simple web based solution. Instarea also focuses on the interactions between a company & it’s clients. Their Adalytics omni-channel event hub is growing fast in popularity among telcos & banks, which place emphasis on their client satisfaction.