The importance of data in today’s world cannot be over-emphasized, every piece of information or transaction is data. It is a valuable asset because of how it determines and influences every process, from the world’s economy to decision-making in businesses.
Every business entity strives for data. Companies or businesses with high financial metrics and value are mostly known for their effective analysis and pushing of personalized data. Everything we do, ranging from what and where we eat, to the places we travel is all stored in form of data configuration that is required, collected, and shared by many and used to analyze and understand certain aspects to implement in a proper business model.
In this article, we’ll learn how and where to source data, and how its value can be determined and monetized. Let’s get started
A data marketplace is an online platform or store where users buy or sell different types of data from several sources. Data marketplaces have made it effortless for data providers to advertise, manage and sell their data. On the other hand, data marketplaces allow buyers to explore, analyze and buy data from multiple sources compiled in one, user-friendly marketplace. How possible is this? Let’s find out.
How does a Data Marketplace work?
Basically, a data marketplace works like any other eCommerce platform. Unlike other eCommerce platforms, the product sold in a data marketplace is data.
Businesses, governments, market intelligence agencies, and different types of analysts use the data sold in these markets for their various needs. It connects data providers (sellers) and data buyers (consumers), enabling individuals and/or businesses to upload, access, purchase, or incorporate the data sold there into their business model.
Data marketplaces provide a variety of big data sources, which can be integrated into websites, mobile applications, etc. They are generally cloud-based services for data exchange. Similar to the stock market, the value is determined by the supply and demand of the data available. Data cloud enables businesses to unify and connect all of their data as a single copy with ease, thereby creating an ecosystem of thousands of businesses and organizations who connect to their own data and also connect to each other by effortlessly sharing and consuming shared data and data services.
There are so many databases available, some of them are
Business Intelligence
Market Research
Geospatial
Demographic
Firmographic
Technology stack data
Consumer behavior
Public data
Having known how the data marketplace works, let’s have a look at some of the types of data marketplaces.
Types of Data Marketplaces
Now that we understand how the Data marketplace works, we’ll proceed to learn about its types. Data marketplaces exist in three major types:
Personal Data Marketplaces:
Personal data marketplaces were created to resolve consumers’ dissatisfaction with their personal data being used by tech companies while they receive no financial benefits. Personal data marketplaces fall under the Business Consumer (B2C) type. Here, consumers get paid for sharing their data.
This simply means that consumers can monetize their data. They can choose to whom they sell their personal data and sensitive information and directly pocket the proceeds.
Business (B2B) Data Marketplaces:
B2B (business-to-business) data marketplaces allow two companies to buy and sell industry data to each other. Data sold here can be insurance claim statistics, localized product prices, or data about recent investment deals in a given industry. B2B data marketplaces make up the majority of data marketplaces.
B2B data marketplaces enable businesses to meet their business targets by making it seamless to buy and sell data. Normally, data providers prefer data marketplaces where it’s easy for them to integrate their data. Some data marketplaces offer data providers a free route for monetizing their data, where the provider only pays when they sell their data, while others require their users to subscribe in order to list their data.
Sensor/IoT Data Marketplaces:
IoT (Internet of Things) is a system of interrelated computing devices, mechanical and digital machines, objects, animals, or people that are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.
An IoT data marketplace is a platform for buying and selling real-time data collected from IoT devices. Data collected from these markets provide businesses and companies with a better understanding of consumer behavior, help them improve sales, and build better marketing strategies.
Difference between Data Marketplace, Data Warehouse, Data Lake, and Data Exchange
Data marketplace is different from data warehouse and data lakes which are concerned with the type of storage, whereas a data marketplace is just a platform for buying and selling data.
A data warehouse is more established than a data marketplace. Users prefer and trust data warehouses more. However, data stored in data warehouses can only provide solutions to business-related problems. The business intelligence they provide doesn’t include technical information because they offer a limited Big Data capability, thereby making them a poor source of external data.
Also, the data marketplace is slightly different from data exchange platforms. Data exchange is the private exchange of data while data marketplace is the exchange of public data with financial transactions involved.
The following table summarizes the difference between a data marketplace, data warehouse, data lake, and data exchange:
Data Marketplace
Data Warehouse
Data Lake
Data Exchange
The public exchange of data. It involves monetization.
Stores data that can only answer business-related questions.
Large banks of data gathered using IoT and machine signals, CRM databases, and records.
The private exchange of data.
The range of data spans all categories of Big data.
It has limited big data capabilities.
Offers vast data which usually takes so much time to differentiate.
Updated in real-time thereby, providing users with fresh and on-demand data.
Key Limitations of Data Marketplace
Data marketplaces have made it easy to buy and sell data online. This sounds convenient and eliminates the efforts required in locating required datasheets, but it comes with a lot of limitations. Data marketplaces facilitate the purchase of data but don’t provide the steps needed before and after the purchase.
These steps are equally, if not more important when it comes to integrating datasets into business models.
The key limitations of Data Marketplaces include
1. Unrefined Data
Data gotten from data marketplaces may not be arranged or in the relevant format. Finding data that are most relevant to the business out of the vast data purchased might be challenging. How will you determine which dataset will be relevant to your business model or use case without testing it out first? There are no free trials–you can’t try out a dataset on your model to see if it works prior to making your purchase neither can you predict if it will work on your business model. Most times companies can end up purchasing data sets that end up being irrelevant to them.
2. No proper pricing strategy
There is no way to tell the value a dataset will bring to your company prior to purchasing it. It is unpredictable and has no guaranteed ROI. The cost of purchasing, formatting, handling, managing, and integrating external data into internal data is very high.
The purchase of more than one dataset can be very expensive. If you don’t know what you’re looking for, purchasing vast data is a waste of money.
3. The Security
Not all data marketplaces offer secure data compliance with regulations such as GDPR and CCPA.
What is an alternative to Data Marketplaces?
Individuals and companies can purchase data directly from data providers, this is an alternative to data marketplaces. With an understanding of the type of data you need, data providers such as Enrich Layer offer information collected from online activities and real-time data scraped from the web, e.g. user profiles.
Enrich Layer uses different API interfaces for different profile types. It comes with a fixed cost structure, and packages for upgrades. Unlike most data providers, Enrich Layer offers a bonus–you can run a free trial before purchase to see if the data format matches your criteria
The bottom line
People often search for healthcare marketplaces, enterprise marketplaces, and data science marketplaces denoting specific sectors, but there are no separate data marketplaces for each; it’s just one common ground with different players.
Although you can access different sources and providers of data, it would be a challenge to obtain the necessary data that meet your specific requirements. Alternatively, by outsourcing data from data providers like Enrich Layer, you can be specific about your criteria and get data in the format you want.
Check out Enrich Layer’s 401 Million Individual and Company profiles and the Company Profile API which gets you your desired datasheets.
