Data monetization is an increasingly popular revenue stream for companies across industries: from financial services firms and retailers to media and publishing businesses.
These organizations are turning their first-party data into a ‘data product.'
And doing so has enabled these companies to both test an entirely new, lucrative monetization method and gain a sizable competitive advantage in the market.
In his 2019 report on retail business growth strategies, eMarketer Principal Analyst Andrew Lipsman noted the common traits found in brands that successfully monetize their data:
“[They] have both quantity and quality of first-party customer data, heavy online traffic volume, an advertising tech stack and an organizational commitment to the business.”
Translation? They are data-driven and make wise use of their data sources, internally and externally. That is, for internal marketing efforts and in externally focused business models.
The first step to monetizing data? Building a robust, relevant data set with the right tech.
First-party data monetization: A growing trend — and a proven revenue driver
“Many organizations do not manage customer data as a corporate asset, and the monetary value of that data is often ignored,” Gartner noted in 2015 following its big data conference.
Fast forward to today: This is still very much the case for countless businesses.
Many companies have (finally) prioritized first-party data collection. Why? To scale and streamline their growth-focused teams’ (marketing, analytics, data science) daily activities.
They use this data to provide individualized, bespoke customer experiences via their cross-channel strategies, develop predictive models, and glean insights from audience segments.
But this is just the tip of the iceberg when it comes to how they can use their first-party customer data to improve their bottom lines in the long run.
Just look at how two well-known companies in two popular industries have taken advantage of their first-party data through inventive and innovative data monetization strategies.
Media: Conde Nast’s Spire ‘audience targeting platform’
Advertisers are in a precarious position today. Why? The end of third-party cookies is nigh.
The demise of the once-helpful marketing resource has led many advertisers to explore new options for targeting and retargeting prospects and customers in their ads.
Now, many media brands are coming to the rescue by offering up their data.
Take media conglomerate Conde Nast. The brand recognized it could help advertising partners shift their strategies by allowing them to capitalize on its wealth of first-party data.
Recently, the company created a new data monetization platform, Spire, that helps those that buy ad space on its web properties. Often, these are travel, retail, and beauty brands.
The platform helps them reach the right consumers (i.e., those who expressed interest in content related to their products) with relevant, personalized messaging across channels.
By gaining direct access to Conde Nast’s “high-value audiences,” the marketers at its partner organizations can ensure consistently strong ROI from their advertising efforts.
(Note: You don’t have to be a Conde Nast to monetize data and accelerate revenue. Many BlueConic customers utilize their first-party data stored in our CDP to provide ad partners with highly targeted segments to increase their conversion rates.)
Retail: CVS’s Media Exchange partner advertising network
Non-traditional industries like retail have also implemented data monetization programs.
Pharmacy chain CVS, for instance, set up a similar data monetization program. It's available to partner companies via its proprietary advertising network called Media Exchange.
According to AdExchanger, the purpose of the Media Exchange data product is to “help advertisers and suppliers reach CVS customers when they’re in the shopping mood.”
In short, advertising partners — like consumer packaged goods (CPG) companies — can target individuals across channels by leveraging the brand's first-party data.
Roughly 70% of those residing in the U.S. live within three miles of one of the brand's 10,000 brick-and-mortar locations, the company recently noted. Moreover, 4.5 million people across the country shop at or are served by CVS online or offline each day.
Suffice to say, CPG companies that stock merchandise at CVS locations nationwide have plenty of reason to want to utilize the chain’s considerable customer data set.
For instance, CPG partners can take advantage of the Media Exchange network. They can determine which shoppers to serve ads (video, search social, and banner) across the web, on the CVS website, and even in in-store placements at physical retail stores.
Building second-party data relationships another option for monetizing data
If creating a first-party data product seems daunting to your growth-focused teams, there’s another data monetization alternative: building second-party data relationships.
A data exchange program with another reputable brand a) you know will ethically and legally use your data and b) whose first-party data sets could aid your engagement efforts (i.e., due to target audience overlap) is a premier way to improve your marketing ROI.
Second-party data from a partner business could also augment your existing profiles for customers. This means you can include data from partners in your audience segments.
You can also share first-party data with trusted partners so they can reap the same rewards.
With BlueConic, you can even manage consent and federate it across your tech ecosystem. That means your business can ensure it only shares the first-party data a customer permits.
As Ad Age contributor Gary Walter explained, though, trust is vital in any data-sharing relationship. Particularly second-party data partnerships between organizations:
“As second-party data relationships are coming back into fashion, marketers who take proactive steps to ensure privacy and ethical use … will reach the highest number of receptive customers.”
In other words? It’s crucial the companies you form longstanding second-party data partnerships properly (and legally) use your first-party data in their marketing efforts.
Just as you work hard to retain your customers’ business, your best bet for a thriving data monetization strategy is to get partners to invest in your ‘data product’ for a long time.
And investing in a pure-play customer data platform (CDP) like BlueConic.
Devising your data monetization action plan with a customer data platform
“Every company operating today is a data company.” That's what data analytics pros noted for MIT Sloan Management Review on the various types of data monetization approaches.
The key to success as a ‘data company'? Form a data monetization framework.
That is, you need high-quality, first-party data you can conceivably share with or sell to other brands. Moreover, you need to ensure that data persistently stored, always accurate, and easy to package up (i.e., segment and activate across platforms).
Enter the CDP. An advanced solution that checks these three important boxes.
BlueConic Director of Product Marketing noted for Marketing Toolbox how a pure-play CDP can enable various data monetization use cases for brands across industries:
“Some brands, like media and publishing organizations, leverage their data assets to diversify their revenue. They can use a CDP to build interest or product-based audiences to share with relevant partners, including those who buy ad space.”
Put another way? Dynamic segments of prospects and customers that update in real-time, account for all individuals consent preferences, and incorporate their latest behavioral and engagement data are your most valuable data monetization asset.
And BlueConic is the tech that can provide you and your business this constantly ‘refreshed,’ persistently stored asset. One that can lead to long-term data monetization success.
Take publishing customers that use BlueConic’s CDP for data monetization.
They use our Interest Ranker 2.0 feature to track readers' interests (i.e., browsing and buying habits) and store that data in our unified, persistent customer profiles.
These businesses can sell targeted ad space on their sites. What’s more, they compile those interests into custom segments and bundle them, so to speak, for advertisers.
News-Press & Gazette Company, for instance, showed visitors interested in “travel” an on-site, lightbox dialogue with vacation- and wildlife-themed pictures on its site. This then drove traffic to partner advertisers’ sponsored content.
BlueConic can help media and publishing companies, as well as businesses in other industries, store their first-party data and use it to build premium ad products for partners.
(What's more, these organizations can even take advantage of our BlueConic-to-BlueConic connection for any second-party data programs they execute.)
The era of customer data monetization is here to help brands like yours both cope with the diminished value of third-party data and take advantage of first-party data.
So long as they have the right people, processes, and tech in place.
Watch our "ROI of a CDP" webinar today to learn how companies across industries realize greater revenue growth and enhance operational efficiency with BlueConic.