Big data has become increasingly important, particularly for big companies who are looking to collect as much of it as possible and have the resources to sort and develop it profitably. Data collecting and selling has subsequently become a business opportunity and there are now sites that act as brokers for all sorts of information. And for savvy SMEs with a little bit of know-how, selling data could be a way to bring in valuable additional revenue.
We’re not talking about selling off your customers’ email addresses and other personal information here. It’s the details about their online interactions that are becoming more and more important to big corporations and other organisations. It allows businesses to analyse trends, drill down into customer behaviour and produce the kinds of products and marketing strategies that lead to more sales.
What is Big Data?
As a collective species we produce huge amounts of data every second. We do it when we buy a particular product, post on social media, share a particular image, click on a link to a website, watch a programme online, reply to an email or put our demographic details into an online registration form.
Each little packet of data on its own isn’t much use but combined it produces a detailed vision of the world that businesses can use to target more effectively and improve their revenue through sales and click throughs. This is big data and, according to IBM, we produce 2.5 quintillion bytes every day.
To put it into better context, 90% of the data we have available was actually only produced in the last two years. This data comes from everywhere and almost all businesses, organisations, institutions and individuals produce it.
How Do You Collect It?
Businesses are willing to buy data but you have to collect it first and it has to be useful. If your business is dealing with a decent number of customers and you have a good CRM system, then you are already collecting the data you need. That could be anything as simple as where customers come into your site, when they buy, what they buy, how old they are, what sex they are and whether they come back. If you have the right software installed, then you can harvest all this data and make it available to third parties for a price.
Again, it’s worth pointing out here that we’re talking about anonymous data rather than important stuff like names and email addresses. Once this data has been collected it can then be sold to global networks that buy data. You do this by using a data broker who will be able to make sense of the data and knows how to package it. Essentially, you can collect data from your website or something like a mobile app and create what is called a passive revenue stream.
How Much Can You Make?
Data monetisation is on the increase and according to statistics around 30% of businesses will be taking it up this year to add to their revenue stream. Obviously, much will depend on the level of traffic you have and the kind of data that you collect. For many companies it provides a way to earn extra money without putting in ads and, in some cases, can significantly increase monthly revenues.
You might think that as an SME it isn’t worth collecting data but you’d be surprised how much you can make. And, as your business grows, you could be earning a healthy secondary revenue without doing much at all.
But are there any downsides?
There is currently little in the way of meaningful oversight for anonymous data collection and buying and selling it to third parties. As the industry grows, you can expect more to come in. There are already rumblings in countries like the USA and the UK and, if you are going down this route, it will pay to keep an eye on the legislation. Much of this is prompted by the notion that personal data is being sold off, which is not true.
The future could well see most businesses including data mining in their normal, everyday operating processes and selling it through brokers. It’s certainly something that SMEs need to look at more seriously from now on.