Data Monetisation: The New Gold Rush For Scale-Ups
For scale-ups, maximising revenue streams can make the difference between long-term success and failed growth.
While scale-ups need to expand their offerings and aggressively pursue growth, they also need to balance this with sustainable revenue. And right now, many scale-ups are missing out on a highly profitable revenue opportunity.
Data monetisation.
Data isn’t just statistics, charts, and numbers for internal use. It’s a valuable commodity that can generate significant revenue, and plenty of scale-ups are sitting on a goldmine.
According to Deloitte, the global market for data monetisation reached $2.1bn in 2020 - by the end of the decade, that’s estimated to skyrocket to $15.5bn, representing a 22.1% annual growth rate.
But what is data monetisation, exactly? And how can scale-ups take full advantage of their data to bring in crucial revenue? In this post, we’ll be exploring the rapidly growing data monetisation market and highlighting a few major opportunities for scale-ups in this space.
So what is data monetisation, exactly?
While there are many different forms of data monetisation, the basic idea is fairly simple.
Data monetisation is about recognising (and capitalising on) the value of data. And with the right strategy in place, businesses can generate significant revenue by selling, leveraging, and re-purposing their data.
‘Data’ is a very broad term, encompassing everything from customer insights to sales statistics. However, it’s not hard to see why data is so valuable for other businesses - it can tell them a huge amount about different audiences, markets, products, and trends.
Global behemoths like Amazon, Facebook, and Google have consistently monetised their data over time, and this has allowed other companies to build their own tech empires.
(In saying that, it’s important to remember that every company is different. Scale-ups need to establish a monetisation strategy that works for their specific data sources/objectives, and replicating the approach of another business doesn’t guarantee success.)
But how might a scale-up start monetising their data successfully? Well, there are plenty of viable options, but below are just 3 examples of monetisation strategies.
- Selling direct data - scale-ups can sell raw data to relevant buyers. For example, marketing agencies looking to refine their targeting, or research agencies trying to collate data about specific markets/audiences.
- Offering a data service - scale-ups can convert their data into a subscription service. Clients can pay to access up-to-date data about different markets, audiences, or products - through dashboards, reports, etc.
- Delivering key insights - scale-ups can analyse their data to extract actionable insights. They can then sell these through consultancy services or trend reports, offering deeper insights rather than raw data.
There are many different ways to collect, package, and monetise data, but they all lead back to the same idea. Data is a valuable commodity, and scale-ups can use it to drive revenue.
Why should scale-ups think about monetising their data?
Data monetisation can be a fantastic revenue opportunity - but it does take time, effort, and expertise. So what’s the upside for scale-ups?
Below are four significant benefits that data monetisation can deliver for growing businesses.
Generating net revenue
While this may sound obvious, it’s one of the most immediate (and impactful) benefits of data monetisation.
Revenue is absolutely crucial for scale-ups looking to grow their business and achieve financial stability - and data can generate a lot of it.
Plus, once a scale-up establishes a sustainable data monetisation strategy, it can become a relatively easy way to drive revenue. Whether it’s selling a monthly trend report or setting up a subscription data service, scale-ups can create reliable, consistent ways to make money.
Reducing costs/driving efficiency
However, data monetisation isn’t always about selling data to buyers. Businesses also use data to reduce costs and improve efficiency, which ultimately improves profitability.
For example, there’s an intangible value to data that can be very powerful. Scale-ups often rely on data-led insights to improve their decision-making, which usually leads to superior efficiency, cost reductions, and better business outcomes.
The value of these data insights can be hard to quantify, but their impact on a business (i.e. increased revenue, cost avoidance, improved ROI) can be clearly measured.
Building future opportunities
Data monetisation can also create a snowball effect, opening up more revenue streams for growing businesses.
The data monetisation market is still relatively young, and many scale-ups aren’t taking advantage of these opportunities. If a company establishes itself as the go-to for certain data sources, it can quickly attract more customers and build new data services to boost revenue.
The value of data isn’t diminishing any time soon, so scale-ups that act fast can effectively future-proof their businesses and become industry leaders.
Improving data capabilities
Data monetisation also represents just one part of a wider data strategy.
Scale-ups that understand how to harness their data are infinitely more likely to succeed, whether they’re optimising internal processes or selling to external buyers. Investing in data is undoubtedly a smart move - and one that often leads to significant growth.
For example, when Harmonic worked with LifeSearch (a leading life insurance broker) in 2022, placing a Chief Data Officer was a massive priority for the business. LifeSearch was dedicated to building a data monetisation strategy, and this focus enabled them to evolve from an insurance business to an industry-leading, future-facing InsurTech.
How to nail your data monetisation strategy
A well-informed, systematic approach to data monetisation is vital.
With the right strategy in place, scale-ups can start collating and monetising their data as quickly as possible, while also maximising the revenue generated.
Here are 4 key areas that scale-ups need to consider when pulling together a data monetisation strategy.
1. Gain clarity on your business objectives
Before you take any steps towards monetisation, you need to ensure you’re clear on your overarching business objectives - beyond just generating additional revenue.
Data monetisation can be a complex process, so you need to understand what success looks like for your company.
For example, are you looking to launch a dedicated data-as-a-service arm to your scale-up? Will this become a fundamental part of your business offering, or is data monetisation more of a secondary function?
The clearer you are on the direction you’re heading, the easier it will be to optimise your data strategy and establish the right processes.
2. Get buy-in from key stakeholders
Successful (and profitable) data monetisation needs top-down support in a scale-up.
Founders need to be 100% on board with monetisation efforts, as they’ll have to coordinate multiple stakeholders and drive the process forward. Most importantly, they’ll need to understand that investing time/money/resources into a robust data strategy will pay dividends in the long run.
3. Understand the value of your data - and look for potential opportunities
Before scale-ups can dive head-first into data monetisation, they’ll need to understand the value of the data they’re holding. Establishing accurate pricing is a major challenge for many businesses, and this is where the perspective of a data expert can be crucial.
The first step will be a thorough audit of any existing data.
How extensive is the data that’s available? Which potential buyers/clients would be most interested in it? And how unique/valuable is this data in the market?
A scale-up should also use this opportunity to identify data that isn’t being measured. If there are any gaps in the data that could potentially generate revenue, companies should make adjustments and expand their offering. It’s all about supply and demand.
4. Identify your most profitable audience(s)
Understanding your data's value is just half of the equation, however.
You’ll also need to figure out who is going to be interested in using it, and this is a pivotal step in the monetisation journey.
(This doesn’t need to be an external company, either. As we’ve mentioned, data can be shared and leveraged internally - different teams can use it to increase ROI and boost efficiency, ultimately resulting in more revenue for the business.)
If you are looking to sell externally, you’ll need to be confident in the value of your data for buyers. Think about who your data might benefit and the problems/blind spots it resolves. If you can make a strong case for the usefulness of your data, it’ll be much easier to monetise.
Identifying a market of customers willing to pay for your data is critical, so make sure you’ve got this nailed down before you start putting your strategy into action.
The importance of building the right data team
Keen to make the most of your data as a scale-up?
It all starts with building a strong, agile data team that’s backed by founders and key stakeholders.
Data strategy needs to sit at the heart of a business, rather than being viewed as a technical exercise or add-on. Data & analytics leaders should report directly to senior executives (i.e. CEOs and CFOs) to help them maximise the value of their data and capitalise on monetisation opportunities.
There’s a huge gap between ‘owning potentially valuable data’ and ‘building a commercially viable data service’, and the data capabilities/resources of an organisation will be the difference-maker here.
But the role of data teams also extends far beyond monetisation.
Data leaders can assist scale-ups in organising and utilising their data correctly, which often leads to increased sales, superior ROI, and effective long-term growth strategies. Data is an incredibly powerful asset, and scale-ups hiring experts who know how to use it will thrive.
If you’re interested in building an industry-leading data team, or just looking to learn more about data hires, don’t hesitate to get in touch with Joe ([email protected]) to discuss your options!
