Despite the efforts of the GDPR, and the disruption and panic it caused when it was first implemented, customer data is still the most valuable asset a company can own. It has been compared to oil and gas by economics looking at the Big Tech companies like Meta, Google, Apple (News - Alert), Amazon, and Microsoft are siphoning the commodity like panic-buyers running down the toilet paper aisle.

Being compared to oil is no over exaggeration either. Data has surpassed fossil fuels in value, with one user’s Facebook (News - Alert) data alone being worth over $100.

We deposit data wherever we go on the internet, which can really add up. What you like, post, click on, watch, and otherwise interact with is all collected as data and often fed back to you in various ways. And although these different platforms might be sharing your data from Facebook to your email to your calendar, you can only access each of these at a time, so you’ll never really get the full picture of what your individual data is worth.

So, why is customer data so valuable? What are companies doing with your data that makes it such a hot commodity? We’re breaking down what companies are doing with your customer data. Read on for all the details.

Turning data into cashflow

Naturally, with data being so valuable, there are companies whose entire premise is to collect data, like the internet’s equivalent of a fisherman. These data brokers buy and sell information on customers and are now considered its own industry alongside big data.

Because data is so valuable to marketers, this is the data broker’s biggest customer. As time goes on, the demand for this information has gone up and up, leading to the situation we’re in today where data is considered more valuable than oil.

If advertisers aren’t looking to spend too much money on customer data, they can create more sensitive data from what they have on hand. For example, the bank will occasionally ask for voice verification to access your financial information and avoid any fraudulent attempts to get at your finances, but it’s only possible by collecting data from other sources. If you’ve ever called a call centre, whether you know it or not you’ll have volunteered a record of your voice which banks will use, along with machine learning algorithms and tracking technologies, as a reference point for their voice recognition software.

Refining a brand’s marketing strategy

Shopper data is the main commodity of marketing. By understanding what a brand’s customers are responding to, a marketing team can adjust their strategy to reflect what gets you interested.

You might notice this as you shop. You go looking for a pair of shoes, maybe you buy them, maybe you don’t, but once you’re off the site and scrolling through social media you spot lots of shoe adverts, maybe in the same style or from the same provider.

But it doesn’t just stop there. Personalised data can travel from website to social media platform and vice versa. You can travel all over YouTube (News - Alert), LinkedIn, Facebook, Instagram, and even other websites and have those shoes follow you.

Or the data of these stops will be used to show you something entirely new, but you are predicted to enjoy. If you’re looking for shoes, make-up, jewellery in a certain price bracket, your marketing might show you women’s clothes from a store in the same price bracket, having made an assumption that that is what you’d otherwise be looking for.

Improving customer experience

As mentioned, a lot of your data is fed back to you, although it might not be obvious. Companies use consumer data as a means of better understanding and meeting their customer’s needs and demands. Think of it as a focus group, except the number of members in it is greatly expanded, giving a more solid idea of what is wanted from the group.

But there are a lot of flaws to focus groups. They almost convinced The Little Mermaid producers to cut the best song, Part of Your World, due to “seeming restless”. One loud voice can intimidate others into silence or pull creators away from an innovative idea that the industry hasn’t seen before. By having a lot of voices, not in the one physical place, therefore not allowing for one person talking over everyone else, data allows for a more solid opinion forming, and therefore a more informed decision.

And data doesn’t only inform of an opinion. In fact, it might not reflect an opinion at all. After all, actions speak louder than words, so if you are viewing a genre of YouTube like mukbang and not willing to admit it, the data will know. It follows your customer behaviour from what you are clicking to what you are hovering over, inferring what you are watching and what you are engaging with.

From collecting your data, business can form personalised experiences for you. They can offer you more content you will watch, products similar to ones you have expressed interest in, and even promotions that are tailored to what you’re there for.