Sunday, October 06, 2013

What is the value of big data?


Ever since Twitter filed to go public, rumors have been swirling about the viability of the revenue opportunity.  Of course people understand the advertising side of the equation, but how significant is the opportunity to sell the data behind the millions of tweets that go out each day?

In my mind, the first question is, “Is there demand?” – If history is a judge, the answer is “Yes”.  During the first half of the year, Twitter made $32.2M from its data licensing deals.  This is poised to grow as Twitter’s user base grows and penetrates new jurisdictions.  It’s obvious to see why consumer goods companies would want access to this information.  Not a day goes by that I don’t see a tweet about products and the attributes that make consumers love or hate them.  Recent examples from my Twitter feed include things like, “Mmmm, Chobani”, and “Did you know there was such a thing as Raspberry Coke? #intrigued”.   But what about B2B companies? For example, is there any reason that Grainger, a company that supplies industrial products like pumps and valves to see value in Twitter’s trove of data? The answer is, “It depends”. If access to Twitter analytics could give the company a window into marketplace trends, then perhaps it would be of interest.  In the meantime, however, it’s a wait-and-see game.  Advertising revenue is the easy lever, let’s see how Twitter can diversify its revenue opportunity and capitalize on the billions of bits of information that pass through its servers each day. 

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