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Corporations are making big bucks from your data

Posted by: Robert Stokes

A recent report from The Economist has found that over 60% of professionals believe that data is successfully generating revenue within their organisations. Pair this with 83% feeling that it is increasing the profit made by existing services and products, and it’s clear that businesses are finding ways to turn your data into a valuable asset.

Mining large sets of data to find patterns and trends is progressively becoming standard business practice, possibly down to the fact that technology infrastructure is now powerful enough to work through the sheer volume of information at our fingertips. Big data is estimated to generate over $50 billion by 2018 and with more and more data generating products coming onto the market, such as smart cars, smart clothing etc, this is only set to increase.

Overall, economic growth is at an all time low, around the 0.6-1% mark. This may not be true for everyone, but for the majority, this plateaued growth means that companies need to react to this change. Used in the right way, data collected by companies can be structured or leveraged to generate a return on investment. There are four main ways that companies use big data; advertising, marketing, product development and data management.

Tech giants like Google and Facebook, are positioning themselves as data-first operations built entirely around data collection, analysis and redistribution. Rather than just using it as business intelligence to improve their service, they are selling your information to advertisers to provide “a taste” of what certain demographics are looking for. With this specific data, advertisers and corporations can pinpoint a much more exact market for their product or service. Advertisers then transfer this information over to marketing to actively sell you a product tailored to you. These patterns can then help companies build up predictions of what people want, and this can result in companies offering deals tailored individuals and manage supply and demand.

Data management is becoming a business model in itself, due to the investment needed to sift through all the available information. This could mean that we could begin to see companies created for this purpose only and could result in companies bigger than Google. But currently, companies who harvest and sell personal data are doing it without the consent or knowledge of the data owner, and they are making billions. But this asset could very well become a huge liability as they face fear of hacking, “distrust” from the public and new data regulation laws such as the General Data Protection Regulation, passed by the EU council. With such laws, companies will need to be obtaining consent from the data owner, meaning that collecting and storing without a plan, could become a very risky strategy. Businesses will also be required to provide customers with a copy of any data held on the, this will put the control into the hands of the data owner and could spark the decentralisation of data as the owner will become the point of integration.

It is clear that there needs to be a re-think regarding the collection and use of big data. The increasing power of cloud processing, analytics and storage has meant that data is increasingly accessible to businesses of all sizes, however companies need a robust strategy to deal with otherwise the data could become a liability rather than an empowering, valuable asset.

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