The value of data: Because you’re worth it!
We live in the age of big data, where data has become the most valuable commodity in the world. But if you’re wondering just how data has become so valuable in modern day life then look no further than where and how data is being used.
Cast your mind back to September 2017, the Apple X is being launched with the slogan “Say hello to the future” where new features include wireless charging and (despite some technical glitches at the launch event) Face ID, which enables the ability to pay with your face.
Data is digital advertising perfect wingman
But realistically the concept of paying with your data isn’t new, in fact it’s something that all five of the most profitable companies in the world use to thrive. Earlier that year, Alphabet (Google’s parent company), Amazon, Apple, Facebook and Microsoft collectively made a $26 billion net profit in Q1 2017 alone.
And when looking further into the stats for these tech giants things get even more impressive, in 2018 half of all dollars spent online in America went through Amazon. Google and Facebook have equally impressive stats, in 2016 both companies were responsible for almost all the revenue growth in digital advertising in America.
Remarkably, when looking at the most recent yearlong stats, in 2018, this dominant trend is still apparent for all three giants with almost 70% of total digital advertising spend in America being collected by Google, Facebook and Amazon.
Fast-forward back to the present day and even the threat of global economic slowdown in 2019 hasn’t affected global digital advertising spending, which was estimated to rise by 17.6% earlier in the year. Meaning that, for the first-time, digital advertising will account for half of the global advertising market.
If you’re wondering how these giants have dominated the market the simple reason is because these companies have harnessed the power and value of your data. Many of the services they offer their end user are free, in essence users pay for these services with their data rather than their cash.
Welcome into the personalisation era
The data provided enables these companies to produce fully personalised content and platforms, which in turn deliver a better product to the end user, providing them with a better user experience. Factor in digital advertising and you not only have a platform in which people happily use on a daily basis but you also have the information to create best-fitting target groups and improve the users’ shopping experience through targeted advertising.
What’s more, from a business point of view these tech titans have an even greater competitive edge thanks to their use of data as they can pinpoint a new product or service gaining traction in the market and either copy them or simply buy them out before they become too big a threat. For example, Facebook’s purchase of Instagram in 2012 for $1 billion and WhatsApp in 2014 for $22 billion.
Historically tech giants’ collection of personal data was limited to people’s use of computers, however now a whole new range of devices have changed how we go about our daily lives. Smart phones, smart speakers/personal assistants and wearable technology have all opened the door to the collection of new forms of personal data on an almost continuous basis.
The type of data being collected ranges from – demographics (age/relationship status/education), web search history and your likes/dislikes on social media to the more sensitive – biometric data (voice/facial recognition), health data and income.
Understandably the most valuable data points on the market are linked with the types of data which are harder to get access to i.e. health. So much so that remarkably health data is more valuable to organisations than knowing whether a potential customer has a net worth of over $1 million.
From data collection to data connection
As Google is able to track most of its users’ life and activities from so many different platforms and services from query searches to location and fitness tracking it is widely seen as the best placed out of all of the tech giants to collect user data.
And the impact of this data can already be seen in business. Take forecasting for example, recent research has shown that trends in increasing or decreasing volumes of housing-related search queries on Google are actually a more accurate predictor of house sales in the next quarter than the forecasts of real-estate economists.
Data also plays an important role in the advancement of artificial intelligence (AI) in business. Most of our buying decisions are based on emotions, trust, intuition and culture rather than logic.
And this is where AI comes into play as algorithms are increasing the capacity to identify these factors enabling businesses to create customer behavioural patterns, which identify common characteristics between successful and unsuccessful prospects and allows for the creation of groups of potential customers who share similar qualities.
Estimates show that by 2025 AI’s impact on marketing alone will reach nearly $40 billion, however despite knowledge of what AI is, a great number of companies are still unaware of the beneficial impact it can play.
With vast amounts of personal data currently available, the possibilities for customer intelligence, customer personalisation and customer experience are endless. But remember, with big data comes big responsibility; the customer should always come first.