Why data is the new oil

Can there be any commodity more precious to an online user today than data? This resource is already valuable for those that know how to effectively exploit it and its value is set to grow even more over the next three years.

Data is the oil of the online world — the fuel that powers the engines of online business. Yet there are still many businesses that have yet to grasp just how important the reams of data generated by their customer relationship management systems, online ad campaigns, websites, search campaigns, email marketing efforts, and so on will be to their businesses in the years to come.

This is data that gives one important insights into what targeted customers are searching for through the search engines, their demographics and interests, their browsing behaviour and so much more.

By analysing this data, users can answer important questions such as which search terms are most valuable to their businesses, which cross- and upselling techniques are most effective for their existing clients, and which messaging and environments are effective in converting new customers.

Amongst other uses, this data can enable companies to do effective re-marketing — delivering ads to users that one knows have expressed an interest in the company’s services or products but have yet to convert. It can also be used to reactivate dormant customers through targeted offers or for customer retention strategies. Put simply, one can now target the right customer at the right time with the right message.

But many companies leave this invaluable data in the hands of multiple business partners without considering how these suppliers may use the data for their own benefit or what the implications of a breakdown in a key business partnership may be.

For example, many users outsource their search engine marketing or ad-serving to specialists in those fields without giving enough attention to data ownership issues. They may be shocked to find out that an agency they work with has every right to aggregate and resell their campaign data to their competitors. Be especially wary about free services – how exactly are they making their money?

In an environment where users work with multiple agencies, simply understanding where all their data resides and what rights they have to it may be a challenge in itself. Who owns the data? The business, its marketing agency partner, the ad-network or the company that supplied the ad-serving technology?

Now is the time for users to start understanding all of these issues and to bring their data under their control. They need to ensure that they have full control over and access to their data, even though they can still outsource the really technical stuff to a specialist. And they must put a sound web analytics environment in place so that they can leverage their data to build a more successful business.

The big winners in the online world are the companies that have access to rich data about their customers and know how to use it to drive sales. They understand that ownership of data today is about ownership of customers. Those that don’t own their data are just a step away from losing their customers.