Just what is datafication?
2022 has been the year of buzzwords. From metaverse to web 3.0, we’re expanding our tech lexicon on a weekly basis, and we’re ready to add another one to your library. Datafication refers to the action of translating human activities into data and then transforming this data into useful information. The term “datafication” was introduced by Kenneth Cukier and Victor Mayer-Schöenberger to refer to transforming invisible processes into data that companies can use to optimize their business.
From gathering info about your location to food preferences and buying behaviour, the statement of “if it is free then you’re the product” is ringing truer than ever. This harvested data has excellent value to marketers, and they are willing to pay! LinkedIn Marketing Solutions earned more than $3 billion in revenue by providing advertisers access to their 700m + users. Likewise, YouTube hit $6.9 billion in advertising revenue in that same window.
“Data is a precious thing and will last longer than the systems themselves.” – Tim Berners-Lee, father of the World Wide Web
We’re all aware of mayor social networks’ data harvesting, but what are some other examples of day-to-day datafication?
Streaming services – Netflix has entered over 44 million households in 33 countries. Keeping millions satisfied with not only externally created but also original content is no small task and having data to help with decision making is key. In an industry where you live and die by the ratings, it’s no wonder that user data plays a major part in choosing which pieces of content gets created, expanded upon or which shows get the axe.
Insurance – Insurers have seen their industry undergo a massive transformation since the advent of easy access to usable data. Being able to assess risks based on real-world data allows insurers to make data-driven decisions. With driving monitors and smart watches that send biometric data insurers are able to see data, not people.
“Information is the oil of the 21st century, and analytics is the combustion engine.” – Peter Sondergaard, Senior Vice President and Global Head of Research at Gartner, Inc
Now this data collection might seem sinister to those conspiratorial minds, but most platforms have a far more productive uses for your data than simply spying on you. Having access to users’ data allows businesses to better cater to and understand users, providing content that is unique to them and to keep them scrolling, clicking or reading.
What does the future of datafication hold and what does it mean to users?
As an increasing number of dimensions of our lives play out in digital spaces, some argue that datafication will intensify. Data science is an in-demand skill set in the workplace and with data becoming as important as currency, we can see this need expanding rapidly.
Datafication can also be a business and product in itself. If you’re looking to create an app or platform that serves to gather, categorise and make sense of specific data for your business, get in touch and let’s talk development. <link>
A final thought is as we’re seeing a current boom in the datafication market, it is important to see how this data is collected and what could be next. POPI, privacy concerns and user mistrust has also gained traction, and users have a growing concern about how their data is collected and what is done with this precious resource. Ethical collection starts with transparency, something that today’s tech giants might not be willing to play ball with just yet, but can be a competitive advantage.