Now that we are firmly in the age of big data and data-dependent business models, it makes sense to view data as the new gold. The collection and monetization of data is part of the business model of virtually every online company.
Think about the last time you visited a news site that didn’t ask for your permission to leave various cookies on your computer (or to inform you that it did). Below are a number of metaphors that explain why data is the new gold.
Data is precious like gold
Data is valuable like gold. However, the need for protection is even more sensitive. There are two reasons for this.
First, data is not just an inanimate element that humans have chosen as a means of storing value. Data represents information and insights into the personalities of real people around the world. Second, the cybersecurity threats are far more numerous and ubiquitous than the threats to physical gold. Businesses are constantly exposed to real-world threats from hacking and theft on the Internet.
Just as governments around the world go to great lengths to secure and protect their gold reserves, any company that collects, uses, or trades data should ensure that the mines are well maintained. Choosing the right data center with the right security (from infiltration and natural disasters) is a crucial part of doing business online.
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Like gold, data can be converted into profit
Data that is aggregated into actionable information equals sales. This is becoming an increasingly important part of the business models of a large number of companies. Like gold pulled from the ground, data can be turned into profit in two ways: it can be sold raw or it can be made into a finished product.
Businesses can either collect and use data to better understand their customers and provide them with more meaningful advertising and buying opportunities. and / or they can sell their data to others. In the latter case, more and more so-called “data brokers” are buying bulk data from countless apps, which they then sell to advertisers who use them to better target consumers.
Like gold, everyone is rushing to mine it
The gold data read-across is understandably widespread for several reasons. However, one of the most obvious is that the rush to mine and collect it is very similar to the gold rush of ages past. By realizing that data equals profit, everyone wants to make them rich.
No longer is data just an additional tool that companies (new and established) make an additional part of their overall business model, it is now critical to success. There are currently an estimated 27 billion connected devices worldwide, which are expected to grow to around 125 billion by 2030. There is gold that can be mined, and companies make huge profits from it, and people know it.
Like gold, processing brings added value
Virtually everything a person does online – from the websites they visit, to the things they buy on Amazon, to the people and posts they interact with on social media – generates a data point. Like gold, this information is valuable in and of itself and there is often someone willing to buy the commodity.
The real gain, however, lies in its synthesis. The real added value is created through the ingestion of data and the application of sophisticated artificial intelligence (in the form of algorithms) that extract meaningful behavior and personality patterns. Like raw, unclean gold that is melted and ultimately turned into an 18-karat bracelet or pendant, cultured data represents high-value customer insight (in the form of targeted advertising).
As with gold, there are rules and regulations that govern the extraction
The breakdown of data is ultimately a euphemism for the collection of personal data from internet users. Often times, the privacy and consent agreements that users must agree to in exchange for accessing websites and apps are not transparent and sometimes completely misleading.
Just like most gold miners can’t start digging holes wherever it feels, no questions are asked – there are rules and regulations for mining in most places – there are increasing rules and oversight dictating how and which data can be mined online. Companies like Facebook have been brought before Congress and other governing bodies around the world to provide insufficient transparency about their data collection methods and the data collected.
The “data as gold” metaphor is appropriate for a number of reasons. Both are considered precious; both are convertible into currency or profit; Everyone wants some of the data frenzy. the processing increases its value in the market; Just like with the extraction of natural resources, the gathering of data involves ethical issues that must be carefully considered. Perhaps the most important thing in collecting data is to find a secure space to store it and protect it from theft and other threats.