How Our Obsession with Information Is Fueling a New Form of Commerce.
Look back in history at what civilizations once deemed most valuable: first it was salt, then gold, and now oil. However, when it comes to what is most sought after today, there has been a marked shift away from tangible goods toward a new economy that prioritizes, and is fueled by, data.
A staggering 90% of the world’s data has been created over the past two years alone, and, worldwide, there are more than 5BN searches daily, resulting in nearly two trillion searches each year. This is aided not only by our actions but also technology like voice-driven personal assistants and other IoT devices. As people become increasingly connected and more devices are plugged into continuously faster networks (5G will start to roll-out next year), the amount of data in existence will increase exponentially–according to IDC, by 2020 the amount of data that is worth analyzing will double.
It’s no surprise, then, that data has become the cornerstone of business. At present, businesses still have difficulty measuring and using data, which is holding them back.
Studies show most companies end up discarding the data they cannot yet fully analyze (either due to lack of adequate strategy or technology), creating a pool of what’s now commonly referred to as “data exhaust.” At present, Forrester reports that between 60 and 73 percent of all data within an enterprise goes unused for analytics. In an unrelated 2018 survey of digital marketers, 28% of respondents had no idea how much they were discarding. These are all remarkable facts given that in 2019 marketers, specifically, are expected to spend $19.2BN on adding even more third-party audience data to the trove (not to mention the technology solutions to manage, process and analyze all that data), equaling a 17.5% year-over-year increase in spend on third-party data and related infrastructure.
As with all physical commodities like salt, gold, and oil, extracting the useful product is hard; it needs to be mined and refined. The same can be said for data–getting at the useful bits has historically been a challenge, and that will continue to occur. What has changed is the dynamic: the people companies are extracting data from are now starting to understand the value of their personal data.
If you think that 2018 by and large marks the era of the “informed consumer”, 2019 will usher in the era of the “demand consumer”, an empowered buyer who is no longer willing to put up with faulty practices and advertising that isn’t relevant to their lives and personal buying behaviors. This is certainly a groundswell movement that began this year as more people have become aware of how and when their personal data is accessed and used (thanks, in large part, to increased media attention of privacy breaches and the roll-out of necessary regulations in Europe, and soon the U.S.). The numbers prove it–according to the UK’s Information Commissioner’s Office’s annual report, data protection complaints rose by 14.5% in 2017/18; it also recorded a 29% rise in self-reported data breaches from organizations.
As more people demand greater control over their information (and continue to become smarter and more informed), it isn’t so far fetched to think that we could see a more formal marketplace for data in the future, possibly one where consumers have the control to set the “data exchange rate” by determining the monetary value of their own information.
To cope, marketers need to implement strategies to close the gap between knowing the information exists to understanding how to use it to its full potential. The only way this is going to happen is through harnessing and improving the technology used to mine this data–think about the strides made over the last few years in AI, data visualization, and data storage/processing tools. I am certain that as strategies and technologies continue to improve, so will our ability to mine meaningful, and dare I say actionable, insights.
Marketers are facing a critical timeline: learn to efficiently use data and minimize exhaust (so when it does become more commoditized you’re not leaving money on the table) or simply get left behind. As soon as the data marketplace becomes more fully realized, overhead will increase; as a payoff, so will data quality and meaningful insights, but only with the right strategy.
As we move into the new year, the mindset toward throwing unrealized data away will soon become similar to throwing away any other commodity–nothing more than a waste of a valuable resource.