Monetization of Customer Data
The global data monetization market is estimated to reach a market size of US$278.234 billion by the end of 2026. The market was worth US$184.778 billion in 2019 and is anticipated to grow at CAGR 6.02%. Data Monetization refers to the collection of consumer data pertaining to their preferences, choices, and decisions. This data is then analyzed, scrutinized, and presented to gain measurable economic benefits. It can be distinguished as internal data monetization and external data monetization. While internal data monetization gives a competitive edge to the company by forecasting and predictions, external data monetization enables the organization to generate revenue over its core process, for better industrial standing.
The prime factor driving the growth in the market is surging consumer preference demand by companies for a better consumer experience. Companies require consumer data for estimating market trends and produce goods as per these trends. They also require information about consumer choices for a better consumer experience, as they facilitate purchases and re-purchases. The data collected is also used by government authorities for policy formation and by international organizations for estimating industry and/ or country growth. However, increasing privacy concerns may constrain the market growth of data monetization. Government and cyber regulation also constrain the market.
Direct and Indirect Data Monetization
Data monetization can be segmented as direct data monetization and indirect data monetization. Direct data monetization includes the sale of raw data directly to a third-party organization for generating revenue. This may include a selling contact list containing name, age, number, and some other credentials with the third party for a contracted sum. On the other hand, indirect data monetization involves the collection, sorting, analysis, insights, forecasts, and prediction, and data optimization of data, then a report is submitted to the third-party organization. The market for indirect data monetization is anticipated to dominate during the forecasted period. Since indirect data involves an analyzed report, it saves the 3rd party organization time, resources, and cost of sorting, analysis, and prediction. Moreover, indirect data monetized report gives the companies a competitive edge. It also encourages data-driven models and strategies, locating expansion potential in existing business and/ or development of a new business line.
Surging Cloud-Based Computing Along With Rising Internet Penetration Will Drive the Market Growth of Data Monetization
Other prime reasons driving the growth of the data monetization market are rising internet penetration globally, and especially in the developing countries along with increasing adoption of modern computing methods, such as cloud computing. Internet connectivity has facilitated various institutions to easily gather data. Internet availability around the globe facilitates global data collection while sitting in any part of the world. Online reviews, feedbacks, complaints, and queries ensure faster customer support and convenience. Moreover, speedier connectivity obtains faster results and actions. Furthermore, the surging adaptability of cloud computing has driven the market growth of the data monetization industry to a significant level.
Based on development mode, the data monetization market has been segmented as on-premise and cloud computing. Of the two, the cloud computing segment is anticipated to grow at an exponential rate during the forecasted period owing to the increasing adoption of cloud computing infrastructure, especially in small and medium enterprises (SMEs). The World Bank reports that the quantum of SMEs using a modern method such as cloud computing has significantly surged in the past decade. In 2018, 17% of SMEs around the world, use one or some another public cloud computing platform for their business operations, while 11% of SMEs use private cloud networks. Moreover, surging SMEs growth and number will increase these ratios further. Also, increasing government support to these SMEs will further increase the adoption of cloud computing. In India, for example, the Government had launched a number of programs to support and promote the growth of SMEs. These programs include Mini Tool Room and Training Centers, Skill India program, market development assistance scheme, and others.
Increasing inculcation of usage of cloud computing among the educational institutes and government offices will also boost the market growth. With the growing digitalization era, various institutes are developing and inculcating modern techniques for better productivity. This will increase the market size of the data monetization industry.
Growing Previous Concerns for a More Private Life Along With Strict Government Rules and Regulations Will Constrain the Data Monetization Market
The market for data monetization is severely hindered by growing privacy concerns. the data that is collected includes sensitive information as well such as mobile number, debit/ credit card details, expenditure on particular products, and others. Such sensitive information is on the radar of cyber hackers and is prone to theft and robbery, causing severe financial loss to the individual. Rising episodes of cybercrime have resulted in growing consumer awareness and caution. Cybercrime is a huge threat to economies and individuals and causes potential financial loss. A 2014 study by cybersecurity company, McAfee Corp. states that global cybercrime financial loss in the year was worth US$445 billion, and US$15 billion was stolen from the US credit and debit card fraud alone. In 2018, Starwood hotel was attacked by hackers, who stole the card details of nearly 500 million customers, which was collected by the hotel software. As a result, 327 million customers face financial robbery. Such episodes of cybercrime have significantly gained the attention of government authorities, which have taken steps to curb them.
The European Union, for instance, established General Data Protection Regulation (GDPR) to regulates and monetizes the data stored by companies. GDPR also mandated companies to clearly state the information that is collected by them and give the customers option of whether they want their data to be collected or not. This has constrained the market for the data monetization industry.
The North American Region Is Predicted to Hold a Notable Share of the Market
Based on the analysis report, the North American region is predicted to outstand the market for data monetization owing to its developed infrastructure and technological advancement. The Asia Pacific region has huge potential with growing internet penetration along with a growing population, which can provide a huge database.
Coronavirus Pandemic Has a Positive Impact on the Data Monetization Market Growth
The coronavirus pandemic is expected to positively impact the data monetization industry. With nationwide lockdown and physical shutdown of various institutions, work and education are going online through means of the internet. This has significantly increased the potential database for the monetization business. Moreover, growing internet usage and cloud computing has skyrocketed the market size of the data monetization industry.
