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TDWI Upside - Where Data Means Business

How To Take Control of Your Data

Much has been made of the amount of data being generated this year, but who controls that data and what can they do with it?

Adoption of emerging technologies has grown exponentially in the past decade, resulting in more data generation than ever. At the start of 2020, the world’s estimated total data was 44 zettabytes. In 2025, the amount of data generated each day is predicted to reach 463 exabytes. The big question is: Who controls the data?

For Further Reading:

How the Right Data Management Foundation Fosters Digital Transformation Success

Next Year in Data Analytics: Data Quality, AI Advances, Improved Self-Service

The 3 Vs and Unstructured Data Analytics

Data control has become a hot topic in 2022 because data accessibility has favored some companies over others. Giant companies such as Google, Facebook, Amazon, and Microsoft store at least 1,200 petabytes’ worth of data. However, unlike these four major tech corporations, most companies don’t have the resources to store their data in-house. They have to outsource their data management needs to these large companies. (Think Google’s Big Query or Amazon’s AWS.)

So what’s the problem? Well, for one example, if your website uses Google Analytics to track users’ engagement, you only have access to the portion of your data Google deems accessible, often through dashboards and reports. The underlying original user data belongs to Google, not you, and companies have limited authority over its storage, its management, and -- most importantly -- its security.

To that end, many modern businesses are starting to see data control as a business advantage. This has caused a massive pushback against companies looking to monopolize the data market, resulting in new trends revolutionizing the data industry.

Google Shakes Up Analytics

Google plans to roll out Google Analytics 4 (GA4), an upgrade to the existing Google Analytics 3 (GA3), on July 1, 2023. Although this update promises better tracking of user activities across apps and devices, it has one unsettling deficiency -- it won’t allow you to import your previous data. This update is a big deal, considering almost half of all websites (47 percent) use Google Analytics. Companies that have built years’ worth of user data on the platform can only view their GA3 data in a read-only state once they upgrade. This negates the purpose of having the data in the first place.

This disruptive move by Google has driven companies such as Dreamdata to build their own analytics tools instead of outsourcing their proprietary data to Google. A few European countries have also started revisiting legislation on data -- especially with Google. Earlier this year, France, Austria, and IItaly banned Google analytics from their websites claiming it violated the GDPR. It is expected that more EU countries will follow this path.

A Renewed Focus on Efficiency

The increase in online adoption during the pandemic created a pivotal shift in the daily activities of many sectors. For example, the World Bank reports claim that over 40 percent of adults who made electronic transactions during the pandemic did so for the first time.

The downside to this adoption is the level of unpreparedness among many companies. Taken completely by surprise, many organizations decided to digitize their business processes and outsource their data management to third-party platforms. Although this solution worked in the short term, it was a ticking time bomb in the long run. The problem? These companies can’t claim ownership of their own data, leaving them at the mercy of the third-party platform to decide what data they have access to. Unfortunately, this inhibits scalability.

Fast forward to the present day. Offices are open, inflation is on the rise, and a possible recession is looming. Companies can’t afford to spend more to acquire the same number of users -- or worse, fewer. This year, nearly 60 percent of marketers’ budgets are being cut or staying flat, while 21 percent report their budget being cut mid-year.

For Further Reading:

How the Right Data Management Foundation Fosters Digital Transformation Success

Next Year in Data Analytics: Data Quality, AI Advances, Improved Self-Service

The 3 Vs and Unstructured Data Analytics

Now, online firms are beginning to rethink their position on outsourcing their data. Their new stance is focused on efficiency and getting more revenue per user. Old marketing tricks are proving ineffective and brand loyalty is not a factor with frugal consumers. Their saving grace? Data.

It’s obvious marketers need to double down on prioritizing data and first-party analytics. Gone are the days of relying on third parties to capture, clean, and store user behavior data. Now, brands are seeing that opportunities abound when it comes to owning quality user data -- and they want to keep it in-house. This approach is the first of many that will accelerate the adoption of large in-house data stores in 2023.

Digital Advertising Takes A Price Hike

Digital advertising has been a crucial marketing channel. For most online businesses, it’s one of the best ways to reach new customers and retain existing ones. With the right content, and on the right platform, businesses can get in front of millions of potential customers at very little cost. However, that will change soon.

New rules and regulations imposed on data accessibility have driven up cost. Channels now have to pay more to get user data, which affects digital ads. For example, Meta’s CPM increased by 61 percent year over year, averaging $17.60, while TikTok’s CPM increased by 185 percent, averaging $9.40. In other words, businesses are paying more and getting fewer clicks.

At this rate, digital advertising costs aren't going down any time soon because more advertisers are competing for ad placement from the same inventory. This increases costs and makes advertising only effective by the highest bidders.

There’s hope, however. As the cost of digital advertising increases, firms are looking to make cost-effective changes. They’re looking at personalizing low-cost customer channels such as email and SMS -- and the stats are looking good. The average click-through rate for SMS campaigns is 80 percent. Personalization, specifically, has experienced a revival as firms begin to translate new data captured (e.g., customer product views, similar shopping patterns) to feed AI models such as Amazon Rekognition.

The intent is to increase new customer adoption and returning customer average revenue-per-user. This will drive rapid adoption of analytics technologies across the spectrum, from data capture to data lakes and data integration to new data stores such as vector databases that power search, personalization, and other AI-enhanced solutions.

Overall, it’s evident that progressive companies are the ones with the most data. They have a competitive edge and have higher potential to scale. Third-party solutions may have their perks, but in the long run, owning your data is far more beneficial.

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