Monetizing big data: Six recommendations to avoid pitfalls

Published June 21, 2015   |   

When discussing how companies can capitalize on Big Data, we often hear about successful use cases that have helped companies achieve various business goals, such as improving sales and efficiencies, strengthening customer relationships, and providing better products and services.  Another way companies can capitalize on Big Data is by monetizing it.

Data monetization defined

The Center for Information Systems Research (CISR) at MIT Sloan defines data monetization as “the act of exchanging information-based products or services for legal tender or something of perceived equivalent value.”  In practice, companies generally monetize data by selling it, bartering for something of value, or by building it into other products or services.

Data can be sold as raw data, research data, and predictions. It also can be aggregated in networks or consortiums with other data providers, which can enhance the value of the data for everyone involved.

Some have advised against monetizing data, see, e.g., Never Sell Data, in part because of the associated reputational risks, especially if protected information is not safeguarded.  But because of the immense value that is contained in and can be derived from information, many companies will consider monetization.  When they do, they should keep governance issues in mind.

Considerations before monetizing data

Commercializing data is not without risk of legal, regulatory, and reputational problems.  It is crucial for entities to properly govern data they intend to monetize to avoid these pitfalls.  The following are some of the issues entities need to consider in connection with data monetization:

➜    If the company does not own the data to be monetized, it needs to legally obtain those rights.  Data ownership must always be respected.

➜    Data ownership should also be considered at the time of monetization, as should ownership of any associated intellectual property.  Sellers may want to retain ownership of the data and any IP, and restrict resale and use.

➜    De-identification should be addressed throughout the entire transaction.

➜    Consider the effect of all contracts, privacy policies, and disclosures related to the data at issue.

➜    Different laws and regulations apply to different types of data and can affect data collection, storage, use, sale, and security.  Ensure that all applicable laws and regulations are fully addressed with regard to the type of data at issue.

➜    Consider forming a separate company or division, apart from the core business, to focus on data monetization and other information-related business activities.


As more and more information is being created and collected, and analytic capabilities continue to advance, companies can generate real value through data monetization.  Doing it correctly will help to maximize that value and protect the all-important corporate brand and reputation.

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