Monetizing information today is no longer just the purview of data brokers, and it can involve a variety of methods beyond simply licensing it.
Take real estate websites for example. Users drive 90% of the activity by clicking on photos. However, most of the photos and objects in them are not tagged, leaving the sites with no way to determine visitors’ interests.
One U.S. real estate information provider solved this problem by creating and training a 1-billion-node neural network to learn what was in each photograph. This made it possible to learn which home features are viewed by whom, how often, and for how long. Shedding this light on “dark data” gave the company enhanced marketability and a new revenue stream from its information assets. Now users can search, for example, for “Pictures of wine cellars in houses in the Hamptons.”
What information assets can your organization monetize to gain a competitive edge?
“Traditionally, information managers have had a limited view of how they can help business leaders generate value from information, mainly focusing on operational and analytical benefits,” said Douglas Laney, vice president and distinguished analyst at Gartner, and author of the book, Infonomics.
“Business leaders increasingly see others in their own or adjacent industries monetizing their information in various ways, but don’t know how to get started doing it themselves,” he said. Additionally, in many organizations, information sharing is rare because of turf wars, information silos, or poorly managed and governed information assets.
To realize true economic benefits of information, start treating it as an actual business asset. Infonomics is the theory, study, and discipline of asserting economic significance to information. It provides a framework to apply both economic and asset management principles and practices to the valuation, handling and deployment of information assets.
Read more: Treating Information as an Asset
The following seven steps will help your organization take a structured approach to monetizing information and treating it as an asset.
- Create an information product manager role. Give your information the same product management discipline you give other valuable assets and competencies. Organizations typically have a defined approach for managing and marketing products. Analogously, if you are considering licensing data in any form, you need someone whose job is to define and develop the market for the information asset and to productize it.
- Inventory available information assets. If you don’t know what information you have, or need, you can’t leverage it as an asset. Identify all types of data, including operational, commercial, public, social media and Internet content you can mine for new forms of value. Next, help business leaders understand the range of data available and use various technologies to refine the raw data into more consumable and marketable forms.
- Evaluate direct and indirect methods for monetizing information. Indirect monetization entails using information internally to improve a process or product in a way that results in measurable outcomes, such as income growth or cost savings. Direct monetization involves a transaction. It ranges from exchanging information in return for goods and services, to incorporating data into existing or new products or services, to outright selling it (more often, actually licensing it) in one form or another.
- Borrow ideas from other industries. Check out what other industries are doing to jump-start your own monetization efforts. Looking beyond a single industry is increasingly important — not just to find good ideas, but also as a an early warning about how other companies are evolving their information monetization initiatives that could encroach on your market in unexpected ways.
- Test ideas for feasibility. Put ideas to the test by asking a series of feasibility questions regarding whether your ideas are practical, marketable, scalable, legal, ethical, economical, etc.
- Prepare the data. How are you going to gather the data, and from where? Then, what are you going to do to enhance its utility and potential economic value? Again, think of how physical production processes use raw materials to eventually create finished goods.
- Make the market. Finally, for externalized information products, focus on the marketing aspect, starting with packaging the information product, determining how it’s going to be positioned, priced and sold, and what the terms and conditions for its use might be. This is where a dedicated information product marketing role can pay off.
Monetizing information shouldn’t be perceived as something extraordinary, or only for new age digital businesses. Rather, it should be a core competency for every organization today - one that generates significant economic value from the burgeoning array of information assets at their disposal simply by applying traditional product management methods.