Businesses have long relied on data to make informed decisions to ensure their success. Before the advent of so-called “data marketplaces,” however, that wasn’t as easy to do. Companies had to spend a lot of time and effort accumulating helpful information. What is a data marketplace, though? Let’s find out.
What Is a Data Marketplace?
A data marketplace is an online platform or store where people can buy or sell business information. It is also known as a “data exchange.”
Unfortunately, no matter how much data a company can gather internally, that’s not enough to make the most effective decisions to grow their business. They simply can’t craft the best marketing campaigns and sales and advertising strategies without knowing as much as they can about their competitors. They need to augment internally sourced information with external data, and that’s where data marketplaces come in handy.
What Kinds of Information Can You Get from a Data Marketplace?
In the beginning, data marketplaces were limited to selling general information businesses can use, including the following:
- Business intelligence and research: An example of this data type includes customer preferences (e.g., food people typically order in a restaurant) and why they like that particular choice (e.g., cuisine). This information can be collected via a business intelligence software survey that collects feedback from restaurant customers about different cuisines. In this scenario, a restaurant owner analyzes the customers’ mindset, deriving valuable insights relevant to his/her business. Based on the information collected, the entrepreneur creates business strategies that would appeal to and satisfy his/her customers and be most profitable for his/her business.
- Demographic data: This data type informs business decision-makers on who their customers are and how many of each type there are based on specific attributes, such as age, gender, and place of residence. Some intelligence sources can also include socioeconomic factors, such as occupation, family status, or income.
- Firmographic data: This refers to information about companies, including size, net worth, current status, structure, industry, age, and more. Companies can use it to conduct in-depth analyses to inform their investment, sales, or growth strategies. This data can come from well-known publicly accessible web sources on organizations worldwide, such as Owler, AngelList, Crunchbase, Indeed, and more.
- Market data: This data type refers to price and other related data for financial purposes originating from trading venues, such as stock exchanges. It lets traders and investors know the latest equity, fixed-income product, derivative, and currency prices and see historical trends.
- Public data: This refers to all information in the public domain. It could be anything from a government dataset updated monthly to PDFs accessible upon request.
Note that with each technological advancement, though, the types of information bought and sold through data marketplaces also grow. The advent of the Internet of Things (IoT), for instance, gave rise to IoT data marketplaces.
What Are the Types of Data Marketplaces?
Three kinds of data marketplaces exist today. We talked about the third kind—IoT data marketplaces—above. But what are the others?
- Personal data marketplace: As the name implies, individuals monetize their own data by selling it to personal data marketplaces. The information sold can include their residence, food preferences, favorite brands, and more. The individuals can either set the price for their data and wait for buyers or accept incentives like cash or gift cards for signing up.
- Business data marketplace: The sellers collect and store company data from several data providers in a single platform. They allow data consumers to access pre-curated information from multiple sources companies can use for marketing, sales, and business intelligence purposes.
- IoT data marketplace: These platforms sell IoT data obtained from smart device sensors to third parties. The information is collected in real-time. As mentioned, it can help organizations understand consumer behaviors, improve sales, and create better marketing strategies.
How Has the Emergence of Data Marketplaces Affected Data Science and Analytics?
Before we can discern how data marketplaces impact data science and analytics, let’s define the two concepts first.
Data science refers to the process of studying data to extract meaningful insights for business purposes. It combines principles and practices from various fields, including mathematics, statistics, artificial intelligence (AI), and computer engineering, to analyze vast amounts of data. Analytics, meanwhile, refers to the practice of using data and relevant tools to provide insights so users can make informed decisions. In many cases, the terms data science and business data analytics are often used interchangeably.
Data marketplaces have given data scientists and analysts a means to monetize the information they collect and analyze. In a sense, they have made it easier for such professionals to make data available to as many customers as possible.