Data Brokers – What You Need to Know

It’s all about data and data, everywhere. Who needs the data, who has the data, and what is done with the data.

The demand for data is such that recent times have witnessed an unprecedented data explosion as detailed consumer profiling for business advantage has become the norm.

Data explosion infographic

A 2014 Infographic – Erik Fitzpatrick 

As a data practitioner, you may be inundated with data, structured and  unstructured. Yet, do you cringe at the idea of having some more information that helps you gun for the best customers? I am sure NOT. Every business and analyst likes to have at its/his disposal, a detailed consumer genome that is used to consistently adjust prices and offers and even customize service / product models based on consumer’s characteristics, browsing behaviour, location and even disease or pregnancy status!  The demand for data is no longer confined to the 3600 view of the consumer, but more and more granularity.

Lawful data gathering

When license plate tracking was used for surveillance databases by the U.S. Homeland Security, it was considered perfectly legal, even though an invasion into privacy. The explanation was national security and public safety. But when companies like Acxiom process trillion data transactions to amass publicly available information (social media, blogs, consumer surveys, public records, etc) in its 23,000 servers – it is for analysis and sale! As information is mined from publicly shared data, it is not considered unlawful (!!).  The ethics may be questionable, but as a data practitioner, all we are concerned is the data…

The Data Brokers

The spiralling demand for data invariably led to filling in the gap. Enter, the Data Brokers.

These are companies  not onto data gathering and analysis alone. They sell the data to banks, investment services, insurers, auto makers, department stores, digital marketers, education companies, health care operators, real estate chains and more. Some go beyond to analyse credit ratings and background checks, to up their services amongst banks and financial companies. Firms are also re-packaging and selling this data as a product, tailored to the end-user needs. These suppliers of data, in both raw and processed / analysed form, are the Data Brokers.

TechTarget defines the data broker as an information broker, often functioning as a database marketer and consumer data analytics firm.

The business of data brokering is a multi-billion dollar industry worldwide, albeit considered a shadow / unregulated industry, lacking transparency. However, in a demand-led data revolution, data users and analysts typically rely on the services of data brokers for detailed consumer DNA or market expansions.

Data practitioners and Analysts or Data Brokers?

The drive to collect and analyse data gets more intense every day. The lines between data analysts functioning as data brokers are also getting fuzzier. With decisions becoming more data-driven, it is a cut throat competition out there, where Data reigns supreme.

However, transparency of data sources and methodologies used, as well as opt-outs and accountability, are ways that data brokers and marketers can continue to thrive in a market driven industry.

Bottomline: It is interesting to note that in the parallel geospatial data industry, the data source is very pertinent to analysis. While in analytics, it is the quality and granularity that counts. At the end of the day, perhaps there is need to look at all the three – data source, quality, granularity – as data brokering gains increased acceptance as a functional area.

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