When Data Means Money
In recent times, we’ve experienced some major revolutions in the way businesses operate, especially tech-businesses. And among such revolutions is the way data now translate to money. For those who do not know, data is a set of values with qualitative or quantitative variables. They are facts and statistical values collected for reference and analytical purposes. Simply put, data is information in bits. But with this understanding, how come data is money? And at what point does data translate to more money? A question which will be answered in this article.
Most times, because of the minuteness of data, it easy to assume they are just some set of ambiguous values with no reference to anyone or anything. But Data do have references, — reference to a thing, a person, or a place, and the collection of these bits of information is wealth of its own. Not to mention owning and accessing these Data, or analyzing and using the resultant information.
Today’s tech businesses are massively exploiting the value of data. What tech companies do is create tools in the form of mobile apps, web applications, and software which inadvertently mine our information during use. Have you ever thought of what Google has to gain from creating a search engine that everyone uses freely, of what sense does it make to give everyone access to the Android OS such that a majority of the population now use an Android phone? What does Facebook has to gain in providing us a social media, where we can post as many pictures and videos as we like without any regulation from them? I think someone should be tired by now.
I mean, have you ever wondered if Facebook is concerned or affected by the incessant images, videos, and posts uploaded on their server daily? Most people like me would think that maybe one day, Mark and his team would come up with a policy to lessen the kinds of posts uploaded on Facebook. But, instead of this expectation coming true, they keep building new data centres, publishing new tools and concepts to collect more data from us. For the average person, it’s incomprehensible to think Facebook uses any of our information for any reason. Most of us assume Facebook and other social media sites are just for fun. Of course, we have fun using them, but these bigwigs are making huge money from mining and storing our data, — your information.
In the early years of Truecaller, I used to think, they get our contact details from these service providers like Airtel or Orange to mention a few. It wasn’t long I discovered they get these information from us, from me, from you. Once they are able to persuade you to download and install the Truecaller mobile app, they immediately have access to your contacts and uploads them to their server. Now imagine when 20, 500, 1000 and more people install it on their smartphones. That is massive data, with which they’ve been able to create a market for themselves. With these pool of contacts stored with them, they make about $36 million annual revenue on the average according to Unicorn Economy. And this is just by persuading us to install their mobile apps, and remember, it’s free.
To some, Google is just a search engine, to others, it’s Gmail, to some, it’s Google maps, to others, it’s Android and to some others it’s YouTube. And remember for the average user, all these services/tools are free for use. Isn’t it astonishing that Google freely gives us access to 15 GB disk space for each Gmail account we create? Now let’s look at some of the data which Google mines and stores. They index sites on the web, every single site on the internet, Google has a record of it. Google takes records of your locations, they have records of your search history, and they have records of trends in different geolocations, business locations and many more. According to thesun, as of 2016, Google had made about $80 billion mining the data of its users.
Sometime last year, I was carrying out an investigation on an eCommerce site, and I had to scout for proofs they really plagiarised. I turned to Google, and I was able to access snapshots of the website up to two years backward. Now that’s valuable information stored by Google. Have you been to weblogs, news sites, or eCommerce sites, and you’ve had to sign up or subscribe to access the site. That’s is an attempt to store your information. They are keeping records of their customer base, site visitors and traffic, which in turn is data. These information when compiled over a period of time determines the amount charged to place an ad or sponsored posts on that weblog.
Unlike modern businesses, traditional businesses do not really care about these records. They are just concerned about buying and selling goods and services, without any active data mining and analysis. But with technology and the internet, our business model has changed. As rightly stated by Jonathan Taplin, author of Move Fast and Break Things: How Google, Facebook, and Amazon Cornered Culture and Undermined Democracy, “Data is clearly the new oil”.
Our data are used to fine-tune our experience on the internet and online stores. Imagine how much Facebook pays Google to access your search history and advertise your search related product/services while on Facebook. Imagine how much was paid by Amazon to access the information of people in a particular locations and feature products they would most likely buy when they shop on Amazon. It took some data analysis to do that.
Data is used for selling and displaying ads. When you pay to advertise on Facebook, Google or anywhere, you are actually paying for data. Data powers the web, it is the raw material behind the technology. According to PayPal co-founder, Max Levchin, “The world is now awash in data and we can see consumers in a lot clearer ways”. Data is used for research purposes, data is used by military organizations to spy and study their military opponents. It is useful for investigative purposes.
We do lots of stuff on the web freely, but in the real sense of it, we pay with our identity, your information, which is stored and analyzed are sold to advertisers, military organizations, researchers, manufacturing industries and medical scientists of different specialties at very high costs. Many free sites like Facebook and Google, logs your name, your friends, your activities, and your search history, assembles it, analyze it and build a detailed profile of you. Which is hugely paid for by the aforementioned groups.
With your data, they could determine your risk tolerance, your sexual orientation, your idiosyncrasies, your biography, your location, and your religious inclinations when analyzed. This explains, why Data Science or Data Analysis is the next big career as we move into the era of Artificial Intelligence. The funds raised from Data is enormous that many online companies and blogs invest so much in mining the data of their users, readers, and site visitors. The other time, someone asked me if I could give him the contact numbers of people living in Abuja. I had to refer him to Truecaller. You must have seen notifications from their mobile app requesting access to your location services. That’s an attempt to mine data, and it costs so much.
In conclusion, whether you have a blog, a website, a product, an eCommerce site, an array of customers/consumers/users, a mobile app, a web application. You just might make more money when you can mine data from your users, analyze them and trade those information to vendors that require them. You should integrate it into your company’s long term goals. Remember, “The world’s most valuable resource is no longer oil, but data” — (economist, 2017).
References
http://www.cbc.ca/news/technology/data-is-the-new-oil-1.4259677
https://www.theguardian.com/break-into-tech/2016/nov/21/big-data-means-big-money
Originally published at olubiyiontheweb.com on February 15, 2018.
