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THE ROLE OF BIG DATA IN THE DIGITAL ECONOMY

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big data

Before talking about big data and its role in the digital economy, it is necessary to understand the very subject of such an economy. So, the digital economy is a system of economic, social and cultural relations based on the use of digital information and communication technologies.

The main wealth of such an economy is data. The main emphasis is on the collection and processing of large amounts of data (Big Data).

Big data carries value for any modern company. In the US, there are special exchanges for the sale of anonymized data. As marketer Clive Humby said back in 2006, “Data is the new oil.” Also learn more about data management services.

WHY BIG DATA IS A COMMODITY

We are accustomed to shopping for food or clothes, books or leisure items. Speaking of B2B, organizations buy office furniture or CRM systems from each other . So why don’t companies sell de-identified data about their customers to other organizations?

Of course, big data is different from the typical goods and products that we see everyday. I would like to highlight a number of features that characterize the commercial nature of Big Data in relation to the digital economy .

Lots of wording

What is Big Data? Just a lot of data? Or some special technology for working with big data? Is user data considered large? While participating in the Working Group on Big Data at IRI, my colleagues and I faced this problem.

Tight control

Even the most dangerous goods (like weapons) are not controlled in the same way as data. If information about hundreds of thousands of customers falls into the hands of attackers, then they will be able to find out everything about these people. That is why in order to create exchanges for the sale of data, it is necessary to finalize  the legislation .

Low analytical culture in companies

Unfortunately,  companies have an extremely low culture of working with data. My experience shows that small and medium-sized businesses collect data (on customers, sales, employees) at most, but do not use it to test business hypotheses and increase the overall profitability of the organization.

A fair amount of skepticism

This paragraph logically continues the previous one. So far, only large  businesses are working with big data and predictive analytics.  Medium, and even more so small businesses do not understand the full value of Big Data, and also cannot use modern solutions due to their cost.

REASONS TO USE BIG DATA IN BUSINESS

In my article, I highlighted a number of key reasons why you should use big data in business, regardless of its size and scope.

Better customer understanding

Big data can reveal a lot about what makes your customers buy the products and services you offer. Based on information from your own website, social networks and other public online sources, you can track your customers’ behavior and group them based on actions towards your brand.

Development of targeted marketing messages

The key to understanding your customers is the answer to the question “How and when do they shop?”, “What is valuable to them?”. Based on this information, you can develop more effective marketing messages for the market and reduce customer acquisition costs. Big data can help your company (regardless of size) decide when, where and how to target leads and what content will perform best in the current time frame.

Launching new products to the market

This reason is especially important for online products and services, as customer user data can help you understand what works and what doesn’t. How long do your customers use the product? What motivates them to continue using the product or vice versa – to refuse? With this information, you can increase your existing product targets and make new products with better results .

Quick idea check

The peculiarity of small businesses is greater flexibility compared to corporations. With big data, you can quickly capitalize on insights, test them, and bring products to market before your larger competitors take action.

Customer Journey Optimization

The customer journey is a marketing term. Big data just gives you insight into the customer journey and user experience. How do consumers perceive our brand? How do they travel through your site? How long does it take to turn them into a sale? With this information, you can find points of interest along the way from impression to conversion, and make improvements along the way.

Improving business processes within the organization

Looking at the data on existing business processes within the company, collected by the company over the years, as well as analyzing them, you can not only find weaknesses in business processes, but also optimize them or redo them from scratch. Big data can help you predict how many customers are forecast for the next quarter and help stock your stores.

The benefits of big data are clear, but many small organizations hold back from this level of analytics for fear of wasting time and money. However, those companies that do take the plunge often achieve their targets, especially as their business grows more and more data-driven.

How to organize the sale of big data

For the successful use of big data in the development of companies, special exchanges for buying and selling Big Data are needed. Similar exchanges exist in Western Europe and the USA.

The operation algorithm of such an exchange is simple. On the one hand, there are companies that have large amounts of customer data at their disposal. On the other hand, there are companies that would benefit from this data, due to the similarity of the audiences.

Having come to the exchange, the seller company offers anonymized (this is extremely important) data to organizations interested in this. Those, in turn, use the acquired data in advertising, marketing and customer analytics.

For example, knowing that 3% of all 40-year-old men from London watch football every Friday and buy 3 bottles of Late Knights Worm Catcher 5%, based on the data, you can advertise this beer at a higher discount from another retailer, which purchased the depersonalized data.

Conclusion

Big data in the era of transnational companies and international cooperation has ceased to be a national treasure. The role of big data is to be a liquid commodity, a necessary condition for increasing the profitability of organizations through personalized customer service and predictive analytics.

For the digital economy, it is extremely important not only to legitimize a single definition of big data, but also to achieve the emergence of exchanges for the sale of data. This will become a fundamental factor of competitiveness  in the world market, as well as a big step in supporting national business within the country.

Estonian-born, Tallinn-based entrepreneur, CEO, manager, marketing strategist and professional athlete. My work have been featured by Tech.com Engadget, Medium and other publication. In my free time, I love to get engage with people, and travel to explore the world.

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