Data or digital gold
Data is the most valuable commodity that is sold in global markets. Every company needs it, global platforms such as Google and the GAFAM provide it, and analysts constantly look for methods to collect more data. Data is so valuable because it allows brands to know their customers, targets and how to approach them. Armed with the correct information, brands can target audiences which will be more receptive to their message. With the arrival of AI, the need for data has grown exponentially to fill in prediction models, teach AI to be more accurate and know more about consumers. Data collection became so primordial for companies that many lines were crossed to obtain it, and governments were obligated to step in and regulate data usage. I strongly recommend watching the Cambridge Analytica documentary; the reality behind the screens shows what data can do in the wrong hands.
The type of data that companies collect varies per the goals of the company using that data. However, there is a general list that can be defined here below:
-??????Personal data
-??????Usage data
-??????Behavioural data
-??????Attitudinal data
The name for the categories of data may vary according to the companies using the data, but the concept behind them remains the same. There are several objectives for companies to obtain the data above:
-??????Create personalised personas for better targeting. As explained earlier in the article, brands can create more accurate definitions of their consumers, allowing for better insights on how to generate revenue from them. Examples of data they would use would come from social media usage, where users go on the internet or where users go on the company’s website.
-??????Some companies specialise in selling data that they collect. The data is then sold to Data brokers. Data Brokers are companies that purchase data to analyse it and create packages. The data packages are then licensed to other companies requiring additional data for business purposes. The Data broker industry generates over 200 billion dollars annually.
-??????Additional data helps companies understand customer experience and amend their service where necessary. This data would come from users browsing websites where analytics can track where users go, how long they stay and where they engage. Armed with this data, companies can then improve their platform.
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Companies have several methods for collecting data. First-party data is a type of data companies collect by themselves, usually collected when users create accounts, share their emails, answer surveys or directly contact consumers. Another type of data is 2nd party data. This consists of using another company’s licensed data for use or sale. The next type of data is third-party data. Third-party data consists of the data collected by tools or providers. This data is usually in large data sets and aggregated across several websites. Each data type has its pros and cons and different methods of obtaining it. First-party data is the most precise data a company can get from its customers as they provide it. It also needs the most effort to acquire. It requires a much effort to convince users to share their data. 2nd party data is a less popular option as it requires acquiring the data from another company and is limited by the amount of data companies are willing to share. 3rd party data is the easiest to obtain as the data collected is from all over the internet. However, regulations are being put into place to restrict how data can be collected, impacting the quantity and quality of 3rd party data.
Brands need to be mindful of how data will be regulated in the near future. Once a tool used by all companies, cookies will be heavily restricted, with browsers banning third-party cookies. Since 2018, companies have been tackling the issue of replacing their data sources by eliminating third-party cookies. New solutions respecting the various data regulations, such as privacy sandbox, prediction models or focusing on first-party data, are being set up.
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Data has been given a bad name due to the malpractice of certain big groups. Accurate insights can be made when used correctly, which will benefit everyone. The Internet has allowed all brands to know their consumers better and reach larger audiences. With data, brands can make better-informed decisions and increase their chances of improving themselves and bringing better value to customers. However, data needs regulating as if left unchecked, people are ready to take more, cross lines and intrude into personal privacy.
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