“Information goods” are broadly defined as “anything that can be digitized” (Varian, 1999). The information good that we want to take a closer look at today is market data. We will look into two companies who have managed to create a business out of data gathering: Hootsuite, and Premise.
Hootsuite
Social media is predicted to be used by almost 3 billion people by the end of 2020 (statista.com). Platforms such as Twitter, Facebook, Instagram or Linkedin are known for generating an extraordinary amount of data, which can be highly valuable to enterprises.
However, engaging across many different social media channels, and analysing the outcomes, can be overwhelming for enterprises. Hootsuite offers a tool designed to make social media activity manageable and measurable by organising the different streams into a single customizable dashboard. By digging into Big Data and Machine Learning, Hootsuite allows its customers to have deep insights on every aspect of their social media.
Hootsuite’s biggest strength is certainly its large customer base. However, customer communication on social media may not reflect overall buying behaviour and customer satisfaction. Hootsuite will find lots of opportunities in the market for social media management, which is relatively new, still growing and far from saturated. Nevertheless, social Media are known for changing rapidly. If Hootsuite does not keep up with these changes, it may quickly be overcome by competitors.
Premise
Crowdsourcing is the process of obtaining needed services, ideas and content by seeking contributions from a large group of external people. If done right, crowdsourcing brings immense opportunities to businesses which decide to make a use of it.
Premise is a US-based research company that uses crowdsourcing in order to gather the data especially within emerging markets. Global contributors are asked to take photos of specific requested data with their smartphones, and upload them into the Premise database via a mobile application. The collected data is then aggregated and used to create alternative macroeconomic measures which are sold to businesses, governments and NGOs worldwide.
Premise finds its strength in the size of its network. As for its weaknesses, premise hasn’t made any profit so far. Opportunities for Premise are far from scarce, since there is still a tremendous amount of uncollected data all around the world. However, a long-term threat that Premise might face is a rise in the price demanded from their contributors, which may cause their paid crowdsourcing model to fail.
Conclusion
After analysing the two businesses we would like to finish by giving three predictions for the future of market data gathering:
Internet of Everything
As digitalization goes on, objects once far away from IT will now generate vast amounts of data through implemented sensors.
Machine learning
Machine learning will be an essential element for preparing and analysing data in the future.
Unpredicted new sources of data
Just as Hootsuite or Premise would not have been imaginable 15 years ago, there will probably be new sources of data gathering that we are not able to think of today.
Sources:
Varian, H. R. (1999), Markets for information goods (Vol. 99). Institute for Monetary and Economic Studies, Bank of Japan
<https://www.statista.com/statistics/278414/number-of-worldwide-social-network-users/>
