Oil for a long time has been one of the most sought after commodities on the planet. However, as our online lives develop, data is fast becoming recognised as potentially more valuable than even the ‘liquid gold’ drawn up from the earth. Instead of huge mining rigs out to sea, entrepreneurs have now taken to surfing waves of the digital kind, mining electronic databases instead to create value from seemingly thin air.
Unlike oil however, data is not a commodity to be bought and sold on the market. The value of data comes instead from its position as an asset. In terms of a digital gold rush, this makes the potential value of data as open for business to far more of us than would ever be able to dig down to an oil well. Whilst an individual’s data might not be worth much on its own, thousands of peoples data collected into sets is worth far more to the enterprising thinker.
With hundreds of different datasets available, it becomes far more possible to use the information available to better understand and predict consumer and market trends. Increasing accuracy comes also with this type of prediction, as the law of averages creates relatively reliable outcomes.
They say if the product is free then you’re what’s on sale, which is a claim lobbied at internet giants such as Facebook, Google and other social media networks in particular. Not all big firms however are looking to get value from their data through its sale. Companies such as Amazon and Alibaba for instance, find much more value in mining their own data for clues and insights as to consumer trends and preferences. An online shopping merchant for example, might use the data it has collected on customer shopping habits to better match consumers to their next purchase, subsequently increasing profit through a higher volume of revenue.