Not so long ago, data buying was a laborious task – you’d buy lists of data, often contact details, compiled by a third party. You’d trust (or at least, hope) the details were correct, and you’d use them to augment your mailing lists or boost your list of prospects. But it was a process which carried with it financial risk: data has decaying value, and quickly becomes inaccurate if it isn’t carefully maintained. Add to this the risk of penalties for misuse of data, and the problems became evident.
Just as the way we buy goods and commodities is changing, so is the way we buy data. When we shop online, the majority of us favour marketplaces such as Amazon and eBay over retailers’ websites: 60% of online shoppers in a recent study report that they make purchases through marketplaces rather than directly from retailers’ websites. We like the variety of goods, the fast search options and the value.
This behaviour is extending to data buying. 99% of organisations saying they are open to buying data in data marketplaces, and 54% of organisations are increasing spend there – 38% said they’d spend more than $10,000 USD purchasing marketplace data.
The data marketplace has emerged as a perfect fit for today’s data-driven world. The perception of data is changing from a rigid by-product of a transaction, captured and stored ad infinitum, to an agile, accessible source of insight which generates action and drives new business revenue streams. Data marketplaces provide a secure, easy-to-navigate, user-friendly environment in which data buyers can select information which will help them address specific business challenges.
“We must learn to think about data in an entirely different way – data as a service that is accessed, processed, analysed and reported by everyone who has a need for information,” said consultant Dave Wells from Eckerson Group. “Imagine the power and impact of a curated marketplace that serves a community of analysts shopping for data.”
As businesses look to external data to redefine their customer experience and drive digital transformation, Forrester identifies a new wave of data marketplaces. “The importance of external customer data opens the door for a new generation of data marketplaces…these will help firms more easily find, license, and confidently use external data. They will also improve integration capabilities that help firms blend enterprise and external data and recognise opportunities as data changes”.
Here are the key benefits generated from buying within a best-practice data marketplace:
1. They remove complexity: data marketplaces are designed to be self-serviced, user friendly and easy to navigate, accelerating access to data. As Dave Wells states, they “empower data seekers to find data sets, evaluate their fit for purpose, read reviews from others who have used the data, get immediate access, and prepare data for use”.
2. They can generate cost savings: swift access to accurate data removes the need for project teams to hunt for data across internal and external sources
3. They offer a diversity of accurate, up-to-date 3rd party data sets across a single platform: the type of data set required varies from function to function, from business to business and even across countries. In the US, the Forrester study cited above found participants purchase third party data primarily to obtain customer behaviour data (60%) and geodemographic data (60%). In the UK, businesses select largely social media data (59%) and digital data (58%), and in Australia, transactional data (54%) and customer behaviour data (43%) are preferred.
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4. They provide improved access to 3rd party customer data in particular: 85% of businesses currently using 3rd party customer data cite it as being valuable or very valuable. We believe that, with this data, organisations build out detailed, accurate customer profiles, and – using software to join the dots – can quickly create a 360 degree single customer view.
5. Users can quickly access the data they want to address a specific business issue: “Never lead with a data set, lead with a question,” says Anthony Scriffignano, chief data scientist at Dun & Bradstreet. Searching is fast, with the ability to browse and search different categories and tags quickly and easily.
6. You can ‘try before you buy’: dip in and out of data sets until you find what you want, and visualise data. Some next generation marketplaces enable users to sample and visualise data on a map – visualising data brings it to life and reveals patterns, trends and forecasts.
7. Better data quality: businesses are concerned about the quality of data, particularly when it comes to third party data. 70% of participants in the Forrester study felt that improving the quality and accuracy of this data was their biggest challenge. 69% felt it was a problem maintaining the quality of the data as it changes, and the same percentage, 69%, found it a particular challenge to improve their ability to detect and track these changes. Gartner research indicates that the average financial impact of poor data quality on organisations is $9.7 million per year. With 84% of CEOs concerned about the quality of the data they are using as a foundation for their decision-making, businesses can’t run the risk of inaccurate data.
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8. Their clarity, accessibility and accuracy help drive compliance: with all eyes on GDPR at the moment, there is a renewed focus on transparency and clarity. Businesses must demonstrate best practices in data governance and be able to respond quickly to consumer requests regarding the data they hold. Data purchased in marketplaces is structured and categorised so users can quickly and easily access information required, providing a firm foundation for compliance.
9. Access to all across the business: data purchasing is no longer confined to one or two departments in an organisation. Now every function can operate more effectively by being driven by data – a planning team in a retail business wanting geographic and demographic data when researching a new store location, for example, or a marketing department researching brand reputation across social media.
10. The geographic data sets on marketplaces are vast: understanding the ‘where?’ behind a transaction, interaction or reaction takes customer insight up a notch. Marketplaces provide a diversity of addressing data, GeoEnrichment boundaries, providing businesses with a deeper understanding by connecting people, places and things. The ability to access data sets across new geographies to drive expansion plans is also fundamental to data marketplace users.
It’s important to remember that buying or contracting data is only the beginning of extracting value for your business. Post-purchase support, access to user and product documents, and how updates are delivered are all important factors that the marketplace will provide and standardise for the user.
Of the top five investment priorities for CEOs today, data and analytics capability ranks the highest, according to the Forbes Insights and KPMG 2016 Global CEO Outlook. Data marketplaces deliver low risk, smart investment in data, so leaders can focus on delivering results and driving growth. Importantly, data marketplaces are a conduit to businesses accelerating their digital strategies.
“Firms that exploit next generation marketplaces will gain a digital edge,” said Forrester in its report. “They must catalogue their existing external data sets to understand their current state. Next, they should talk with data service vendors about their marketplace plans, and kick off pilots to automate turning data to insight, and insight to action. Firms that follow these steps will gain a digital edge as they engage customers and drive growth”.
Sourced by Dan Adams, vice president, data product management, Pitney Bowes