Around 45% of all businesses fail within only 5 years of being open. This is quite a large percentage, but why does it happen? Businesses fail for a variety of reasons, but one of those reasons likely has to do with a lack of any data monetization strategies.
If you don’t take advantage of digital ecosystems and learn how to monetize them, you might not get very far and your organization might not become very successful. But what exactly should you consider in a monetization strategy involving data? Where should you start?
Keep reading and learn more about data ecosystems and how you can monetize them with a few simple strategies.
Consider Direct Data Monetization
Direct data monetization, as the name suggests, is a way to directly sell your data to a third party (or several third-party organizations). There are several ways to do this, but the process is overall quite straightforward and simple. Usually, direct data monetization involves storing large quantities of data.
This may take some time because, after all, obtaining large amounts of data naturally takes plenty of time unless your organization deals with large amounts of data on a regular basis. Whatever the case, it is more efficient to build up large quantities of data and then sell all the data at once.
This is in comparison to selling only small quantities of data at one tie which is less efficient and more time-consuming. Whatever the case, selling your data to a third party is usually how most data monetization strategies go. It is the simplest path for most strategies.
When creating a data monetization strategy, it is important to consider what form you want to sell your data. For example, you can sell raw data. Raw data is easy to sell to third parties. However, you can also decide to refine and structure your data through APIs inside of a developer portal.
If you do this, you will gain far more insights from the data. During API monetization, the enterprise exposes digital business capabilities and products to a developer audience using APIs. The developer audience integrates relevant APIs within their products, digital services, or applications thereby exposing the enterprise to a larger external audience and greater revenue.
This is also true for business contact details. Whatever the case, almost every data monetization strategy can benefit from direct data monetization. It is not only simple but very efficient and an easy way to gain revenue from your data.
But of course, if you don’t like the sound of direct data monetization, there are other methods you can try.
Indirect Data Monetization
If you want to take a different approach when creating your data monetization strategy, you can always consider indirect data monetization. But how does this type of monetization differ from direct data monetization, you might ask? The first difference is that you don’t sell your data to any third-party organizations.
But how is this considered monetization at all if you don’t sell your data? Indirect data monetization is unique because you would use the data internally to boost your company’s performance. As the name of this method suggests, this is an indirect way to increase your revenue and monetize your data.
This is an ideal option if you don’t feel comfortable selling your data to third parties. Instead, you can use your data and build off of it to promote your organization. Mainly, this kind of strategy would involve analyzing the data and gaining insights from it.
What to Know
From these insights, you would be able to optimize certain parts of your brand. Usually, indirect data monetization is all about improving the sales aspect of a company. That way, you would understand how to better target your audience and increase sales.
Through this strategy, your brand would generate more revenue than before. Depending on the data you’re working with, you might even be able to learn more about your target audience, their sentiments, and their buying patterns. This would allow you to target your audience in a completely new way.
That way, you could be one step ahead of the game and even anticipate what a customer’s next move would be. This would make it much easier to generate more sales and revenue for your brand. Besides improving your sales, this strategy could also help you improve other aspects of your business.
Other aspects may include IT support, supply chain management, workflows, and more.
Consider the Goal of Your Data Monetization Strategy
Before you jump into a data monetization strategy, you should consider what kind of goal you want to achieve from your strategy. For example, do you only want to generate more revenue from your data, or do you want something more? Generating revenue from your data is very simple and will provide you with revenue right away, but it might not be a great way to grow your brand.
On the other hand, if you use your data to improve upon several different aspects of your brand, this may help you more in the long run. Of course, the perfect data monetization strategy and goal for you will depend on your personal preferences.
To monetize an API, an organization must align a unique business value or service, with a unique digital capability. They then expose this unique digital capability via an API to a developer or consumer audience. This end user must, likewise, find significant value and use to consume an API. The end result is either direct or indirect API monetization.
What You Need To Know About Data Monetization
Creating a data monetization strategy doesn’t have to be difficult, but there are a few important factors you need to consider. For example, you will need to consider whether direct or indirect data monetization is the better choice for you and your organization. Besides that, you will need to think about what kind of goal you want to accomplish from your data monetization.
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