Data monetization is the process of extracting economic benefits or value from data resources. Data assets refer to raw, combined, or deduced data organizations get, keep, analyze, or distribute. Data monetization can be accomplished through several approaches, such as selling data to external entities, creating data-driven products or services, enhancing existing offers with data, or reducing costs or risks by utilizing data. Data monetization can be classified into two main approaches: direct and indirect. Direct data monetization involves exchanging data for financial remuneration, whereas indirect data monetization involves leveraging data to improve corporate performance or customer satisfaction.
The market is growing because of the escalating quantity and variety of data from various sources. The Cisco Annual Internet Report, 2018-2023, predicts that by 2023, almost two-thirds of the world's population will have access to the Internet. By that year, the global internet user count is estimated to reach 5.3 billion, making up 66% of the world's population. This increased from 3.9 billion in 2018, which accounted for 51%. This is anticipated to lead to an increased volume of data produced, indicating a favorable trajectory in the data monetization market.
Furthermore, the widespread adoption of social media and e-commerce has fundamentally altered how people purchase. The extent of consumer data has been expanding in both organized and unorganized formats. Therefore, industry participants utilize this information to improve their business goals by obtaining the most current insights. These insights enhance the effectiveness of marketing, sales, operations, and supply chain management by increasing efficiency. Google LLC's advertising revenue in 2020 reached USD 146.92 billion, indicating a growth rate of 8.98% compared to the previous year and a positive advertising trend. The rapid increase in data diversity, volume, and speed has led to data monetization, driving market expansion.
The key participants in this market are actively involved in strategic initiatives such as mergers and acquisitions, expansions, collaborations, and product launches to enhance their position as market leaders. For instance, in February 2023, Snowflake expanded its Data Cloud capabilities to serve the telecom industry specifically by unveiling the Telecom Data Cloud before the Mobile World Congress Barcelona 2023. The program aims to aid telecoms firms in generating income from data and enhancing their operational efficiency.
Furthermore, in September 2023, Gulp Data and Eagle Alpha established a partnership to enhance the commercial potential for data monetization and expedite access to capital without dilution. The partnership will allow data to be recognized as a real asset on the balance sheets of larger companies as well as small and medium-sized businesses. By providing secure data platforms and information access, these organizations can leverage the value of their datasets. Consequently, these actions generate opportunities for market growth.
North America is the most significant global data monetization market shareholder and is expected to expand substantially during the forecast period. North America is dominant in the data monetization market due to the significant volume and variety of data generated from various sources such as social media, IoT devices, cloud computing, mobile applications, and e-commerce platforms. According to Statista, the eCommerce market in North America is expected to grow significantly, with an average annual revenue growth rate of 14% between 2022 and 2026. Driven by this development, the sector will surpass the critical threshold of USD 1 trillion in eCommerce revenues by 2023. Data analytics and business intelligence technologies are widely used in North America, enabling efficient data processing, analysis, and visualization. This leads to the generation of useful insights and advantages for regional firms.
Furthermore, the North American region is witnessing an increase in data breaches. As per data from the Identity Theft Resource Center (ITRC), there has been a gradual increase in the average number of breaches in the United States in recent years. The United States experienced a surge in data breaches, escalating from 1,506 breaches in 2017 to 1,826 breaches in 2021. Canada was third in the ranking of countries with the highest average overall cost of data breaches, as stated in the 2022 Cost of Data Breach Report published by IBM. The country's average cost of data breaches rose to USD 5.40 million in 2021, up from USD 4.50 million in 2020. The increasing occurrence of data breaches in many industries is expected to accelerate the need for data monetization in the projected timeframe.
The key players operating in the global data monetization market are Accenture, Cisco Systems, Inc., IBM Corporation, Infosys Limited, SAP SE, Reltio, Comviva, Thales Group (Gemalto N.V), Adstra, and Dawex Systems, among others.