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Wired: Putting a Dollar Value on BigData Insights

Wired: Putting a Dollar Value on BigData Insights

Jul 25, 2013

Innovation Insights

Putting a Dollar Value on Big Data Insights

Image: BBVAtech/Flickr

The Big Data phenomenon produces some mind-boggling statistics, such as the fact that the volume of global data produced doubles every two years. At the University of California at Berkeley, researchers found that, currently, five quintillion bytes of data are produced every two days, which is equal to all the information ever produced by every conversation that has ever taken place on the planet.

These statistics are amazing from a scientific and cultural perspective, but most of the hype surrounding Big Data has focused on its enormous potential to transform decision-making, particularly in the business world. And the hype is justified when we examine the practical applications. To cite just one example, retail giant Walmart was able to use Big Data analysis to drive a 10%-15% increase in completed online sales for $1 billion in incremental revenue, which is a well-planned ROI using data.

Analysts were able to determine the value of the changes Walmart made by looking at sales before and after Big Data insights were applied to transform the retailer’s ecommerce strategy. But as the volume of information grows, researchers and business leaders are beginning to explore new ways to place a dollar value on the insights it generates as a commodity in and of itself.

We already know that there’s value in the volume: When huge sets of transactional data are analyzed, they can reveal stunning insights into consumer preferences and behavior – insights that can guide business decision-making and drive revenue. That’s why my company, iSIGN Media, is currently exploring the dollar value of Big Data insights in the proximity marketing realm.

iSIGN currently operates the world’s largest interactive digital signage network, collecting approximately 0.25 terabytes of data per day by reaching 1.5 million mobile phones. But we estimate that upcoming technology innovations will increase our data capture 20 to 25-fold over current levels. New technology will exponentially increase our data collection capacity by giving merchants an affordable way to reach multiple mobile devices simultaneously via Wi-Fi and Bluetooth® at outdoor locations such as drive through menu-boards and digital signage displays in the quick service restaurant and convenience store markets.

The retailers who use it will be able to send rich media messages in a non-intrusive, permission-based way and gain powerful analytics about the potential customers they contact. But now that new technology allows us to double the number of mobile devices contacted – and double the insights generated via backend analysis – we’re looking at the volume of data generated in total as a separate commodity. We are currently conducting research to estimate the value of the insights our growing data stream yields on a per-insight basis and as an annual value.

This research is made possible because we’ve created a data-gathering ecosystem with installations throughout North America, including proximity marketing deployments at a large convenience store chain, gas stations, municipalities and resort towns. The research is ongoing, but we estimate that the per-insight value of this data is $0.20 to $0.75, and the annual value of the data we collect could reach $200 million, using a conservative projection that pegs the value of each insight at $0.20. Factors that support preliminary data valuation include a projected opt-in rate of 20% to 30% for customers in proximity to the point of sale, which is based on consumers’ self-reported receptiveness to downloadable loyalty program or mobile coupon offers.

As advances in technology widen the data stream and businesses more fully embrace the possibilities of Big Data, the value of the insights it yields will grow. Is it possible to effectively analyze very large datasets and ascribe value to it before the insights are applied in a proximity marketing setting? We believe it is possible and are confident the market will recognize Big Data’s potential value as a commodity in this sector: a real-time database that will increase any operation’s ROI dramatically.

Alex Romanov is a business executive with a history of identifying opportunities and turning them into high growth and profitable enterprises.

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