What is a data marketplace and how does it work?
A data marketplace is a virtual platform based on cloud services where data providers and and data buyers can interact to discover, sample, compare, and purchase datasets.
These platforms follow strict privacy regulations, providing a safe environment for both parties, along with quality and consistency. Thus, a data marketplace is where multiple data providers upload information while data buyers search for and purchase data that meet their requirements and needs.
What is data monetization?
Data monetization is the process of using company data to generate economic benefit.
A data marketplace is tightly connected to the concept of data monetization. On certain data platforms, data providers, such as companies, can upload data assets and enrich their income streams. For instance, McKinsey & Company has a data monetization strategy. A data monetization initiative has several steps. Data providers first need to identify the value, type, target clients, and what insights their data can provide to other companies. From there, data providers must choose the right data monetization platform, as there are a variety of platforms that cater to different industries.
Data marketplaces versus data lakes
Data lakes or data warehouses refer to in-house solutions established by businesses to manage and analyze data. These are used to process the data inside the corporation. On the other hand, data available in data marketplaces are external and, as a result, much broader. Unlike internal data warehouses, a data marketplace allows businesses to access any type of external data. Further, internal data lakes often contain vast amounts of unstructured data. Additionally, sometimes internal data warehouses are difficult to use due to a lack of metadata and other data fields such as customer behavior, geolocation, and financial data.
Additionally, the benefit of a data marketplace over the on-premise solutions is that the datasets are often ready-to-use and convenient for businesses. Information obtained from a marketplace is already processed, so you can spend your time gaining strategic insights rather than processing data. For example, API data solutions provide companies with near-instant data that can be integrated into a variety of analysis tools or analyzed by data scientists.
What kind of data can you buy on different types of marketplaces?
Data marketplaces offer a wide range of external datasets, including business intelligence data, IoT-generated data, consumer and consent-based personal data, financial datasets, geolocation data, and web-sourced alternative data.
B2B data marketplaces
B2B data marketplaces allow businesses to trade internal information. This is the most common type of data marketplace as organizations are most interested in data sharing. Companies monetize data assets and provide data buyers with analytics-grade, powerful datasets. These give an insight into competitors, clients, market trends, and more.
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IoT data marketplaces
IoT data marketplaces are platforms where users can buy and sell intelligence created by the Internet of Things. All of this information comes only from interconnected devices, databases created to streamline the information produced globally. When structured, these datasets provide potent insights into online trends, consumer behavior, and technology.
Personal data marketplaces
Many media scandals focused on how big tech companies sold their users’ personal data for their own commercial benefit. Individuals now use personal data marketplaces to share their own data, such as location, online behavior, and other consent-based information, while receiving financial incentives. This is the main driving force behind data for good, a recent movement that aims to use data and analytics to improve human well-being, respond to emergencies via location mapping, and more.
Why is data marketplace important?
Data marketplace connects data sellers with data buyers. Data is often optimized, cleaned, and structured so external businesses can use it with ease. Data sharing via these platforms is safe, often based on blockchain technology.
The IoT and web-scraping helped more than 2.5 quintillion bytes of data to be created every day. In fact, it is expected that global data creation will reach 180 zettabytes by 2025. This enormous creation of global data is what underpins the importance of data marketplaces.
Firstly, data marketplaces are important because they encourage individuals and businesses to generate income by selling the internal data they generate via regular processes and internal systems. Mass adoption of technology and user-generated content has led to a massive digital footprint when it comes to publicly available data. As a result, data marketplaces connect this data with the right data buyers, allowing them to purchase external data with ease for enhanced data-driven decision-making.
Additionally, these marketplaces provide a stable, straightforward method of navigating this entire data world. This is because such platforms are built with user-friendliness in mind, so both individuals and businesses can harness the power of data, not only analysts or data scientists. Data marketplaces often resemble regular e-commerce platforms, so users enjoy a familiar experience – however, instead of purchasing products, they buy datasets, similar to any other product sold online. Most of these datasets are already curated and structured, ready to be used instantly by anyone.
Lastly, the data market brings benefits to both buyers and sellers. These platforms do not own the data; rather, they facilitate the data exchange, allowing for a low-cost, transparent method of exchanging data between the interested parties.
How to choose the right data provider?
Not all data providers are created equal, and choosing the wrong one can quietly undermine the analysis you build on top of it. Before committing to a provider, there are a few crucial factors worth evaluating closely, each of which directly affects how reliable, scalable, and actionable your data will be.
- Global coverage and source diversity. What matters is whether the provider accurately reflects hiring activity in your specific target markets, with sources that are actually representative of each region.
- Data freshness. Look for providers that regularly update their data to meet your needs, especially if you're using it for talent intelligence, competitive analysis, or market research.
- Deduplication. When a company posts the same role across LinkedIn, Indeed, its own website, and regional job boards, that's one job, not four. Providers that don't deduplicate across sources inflate job counts and distort analyses built on them.
- Historical depth. Current data shows you what's open. Historical data shows you how long roles stay open, which positions get repeatedly reposted, and when companies accelerate or pull back on hiring.
- API access and scalability. Manual file downloads don't scale. For any serious volume of research or production use, you need a flexible API that integrates cleanly with your existing tools and workflows.
How do companies buy data from data marketplaces?
When companies buy data from marketplaces, they usually follow a clear process to reduce risk, ensure data quality, and find datasets that meet their business needs. The key steps are finding providers, comparing their offers, checking sample data, choosing the right pricing, and verifying the provider’s trustworthiness. This method helps businesses efficiently evaluate external data while remaining compliant and achieving the best value.
Finding the right data providers
When organizations want to enrich their processes with valuable data, it is important that they thoroughly research potential data providers in order to find the right third-party data provider for them. The main benefit of a data marketplace is that it has multiple data providers, increasing the chances of finding the right data source. Also, users on these platforms can be physically located anywhere in the world, so any business can connect with the right data provider, which might not be possible otherwise.
For instance, data platforms allow you to browse, scrape and filter data according to numerous parameters. Similar to filtering accommodation on Booking.com or looking for a specific product on Amazon, businesses use data marketplaces to find a particular type of data according to their budget, geographical location, and other criteria.
Compare your possibilities
Finding a trustworthy data provider can be challenging. Unlike other data sourcing methods, a data market allows businesses to easily compare data providers because these platforms are independent intermediaries between sellers and buyers.
The ability to easily compare different data sellers increases your chances of finding the right datasets. This unbiased way of sourcing data is not only transparent, but you may also access data sourcing advice. Many platforms provide consultancy services, so you can tap into a pool of information to find the perfect match for your requirements.
Access to external data samples
Buying external data, also known as third-party data, can be extremely costly as it provides an unmatched competitive advantage. Fortunately, many data marketplaces allow organizations to try a sample of the chosen data before paying for the entire set. This helps you ensure that the data you chose is suitable for your needs, so you can use it to make data-driven decisions.
Also, in some cases, businesses need to ensure that the third-party external data they purchase is compatible with their corporation’s software capabilities. A data sample allows you to run a test and make sure the data is suitable before purchasing third-party data.
Purchase your data
After you try the right data sample, you can purchase it. In general, these sets will be available in different formats, depending on the data provider. For instance, some might provide bulk databases via S3 drops, APIs, or continuous data feeds. In general, the platform will charge a commission for connecting you with the right seller. Depending on your chosen data marketplace, the cost structure might differ:
- On-going data subscription where you have access to continuous data streams.
- Usage-based agreements where you pay only for the data you use and when you use it. Sometimes, there might be a minimum monthly fee.
- One-off data purchase occurs when you buy one or more datasets at a fixed price, but there will not be any guaranteed updates to your data.
Review Your Experience
One of the main reasons why the data industry is currently intransparent is the fact that there is a lack of post-purchase feedback provided by actual buyers. Data marketplaces often invite buyers to leave feedback after purchasing the data. This allows you and other buyers to choose only trusted, high-quality data sources.
Data marketplaces allow you to check which data providers are the top ones, the availability of customer service, and the quality of the overall experience. This ability to review your experience turns data shopping into a productive experience, shaping the entire data community for the better. Authentic buyers’ reviews enhance transparency and encourage data providers to improve the quality of their services.
How data marketplaces ensure data quality and compliance
To ensure data quality and compliance, data marketplaces must evaluate each participating provider thoroughly. Here are main criteria that indicate that a data provider provides data of trustful quality:
- Dataset samples and testing. A trustworthy provider should give you sample data before you commit. Testing it with your real use case is the best way to check if the data is complete, logically structured, and up to date.
- User reviews and transparency. Feedback from companies with similar data needs and systems gives you a real perspective that documentation by itself can’t provide.
- Provider verification processes. Certifications such as the Ethical Web Data Collection Initiative, ISO 27001, and SOC 2 demonstrate that compliance is part of how the provider operates, not something they add later.
- Compliance with data privacy regulations. Business contact details, such as emails and IP addresses linked to people, are protected under the CCPA and require a clear legal reason for use under GDPR. If a provider can’t clearly explain how they collect data and the legal basis for that collection, they could pose a risk.
- Standardization and cleaning. If raw data comes in without consistent formatting or normalization, your team has to clean it. The more the provider does this work beforehand, the quicker you’ll see results.
How do companies benefit from data marketplaces?
The value of data for businesses is increasing every day. The growth of big data has become increasingly evident as business professionals’ implementation of data-driven decision-making is expanding to survive and grow in today’s highly competitive digital landscape. Consequently, a data marketplace provides an excellent solution for businesses and investors looking to stay ahead of their competition.
According to Pitney Bowes, businesses are quickly increasing their spending on data marketplaces. For instance, 54% stated that they aim to spend more, while 37% of companies were willing to exceed $10,000 worth of data. Overall, 99% of businesses want to purchase data via a data marketplace.
Numerous reasons reinforce this decision. Adding external data to internal databases allows corporations to make data-driven decisions with enhanced accuracy and confidence. Some additional benefits include:
- Improve predictive models
- Increase ROI
- Enhance productivity
- Improve risk management
- Ability to win new customers
- Improve business processes (i.e., increase throughput, reduce cycle time)
- Opportunity to become an industry disruptor
When it comes to data selling, there is a new set of benefits for companies: data monetization. Because data marketplaces allow for data monetization, which turns information into a secure source of extra income, companies that create massive amounts of data as a by-product of standard business processes now have the opportunity to sell them to interested parties. Furthermore, firms from all industries are starting to realize the tremendous value and demand for their internal data, so data marketplaces allow these businesses to take advantage of these new opportunities.
Final thoughts: using data marketplaces for smarter data sourcing
Many businesses use external data from social media, third-party tools, or their own systems. But as data needs grow more complex, one source often isn’t enough. Data marketplaces are platforms where multiple providers share datasets, making it easy for buyers to find and purchase what they need.
As data marketplaces develop, they make it easier to get fresh, organized, and compliant data without the cost and effort of building and managing your own collection systems. They give you direct access to verified datasets from many providers, all in one place, without the need to build and maintain expensive collection systems.
