DATAVLT Research Shows 96% of Today’s Companies Won’t Be Here in 10 Years, 99% of Business Data is Wasted
For anyone that's involved in the world of marketing, they'll be firmly familiar with the old lesson taught to budding students and veterans: “Half of the money I spend on advertising is wasted; the trouble is that I don't know which half.”
Now while this is a commonly known lesson, it turns out that the lesson may be a far better adage than the reality. The latter of which is shaping up to be a truly bad one – as not just half, but the largest majority of marketing budgets are being wasted on customers that don't generate anywhere near the sort of profitability hoped for by marketers and businesses.
This news is according to Peter Fader, a member of the Wharton School of Economics at the University of Pennsylvania.
The emergence of a world and marketing world centered more around the application of big data and analytics technology, and the fact that they stand to profoundly impact the market even more. One of the reasons that these elements are becoming increasingly valuable is due to their ability to tell a wasted marketing budget from an effective one.
Regardless, there are few companies have the potential to really tap into the wealth that big data allows for, and the consequences of that may be dire, not just for the effectiveness of a marketing campaign, but for the survival of some businesses.
According to the Singapore-based data science company DATAVLT, which states that nearly 99 percent of corporate data is going wasted, and as a result, will never be used to draw knowledge from it. Out of all that data collected, only one percent of that same data that companies collect and store is ever analyzed and put to use in a meaningful way.
So why is this information significant? Well, it's because of this that DATAVLT theorizes that it will cause as much as 96 percent of all businesses that are in operation today to fail within the next 10 years.
Nevertheless, few companies have what it takes to tap into big data riches, and the consequences may be dramatic. Singapore-based data science firm DATAVLT says that 99 percent of corporate data is wasted and never used to draw knowledge from it. Only one percent of the data companies collect and store is ever analyzed. This, according to DATAVLT, will cause as much as 96 percent of businesses that exist today to fail in 10 years.
Internationally speaking, big business is only now starting to realize the profound importance of data analytics to an effective marketing campaign. One example of this is from a 2017 Gartner study: “Out of 13 marketing capabilities, chief marketing officers [polled by Gartner] allocate 9.2 percent of their total marketing expense budget on marketing analytics — the most of any capability.” Only a couple of years earlier, analytics occupied 4th place in terms of marketing spending.
To put this into more understandable numbers: spending roughly 9.2 percent of a marketing budget of, for example, $10 million would be $920,000, which is not what we'd regard as an uncommon price associated with big data analytics projects.
To put that in perspective, the internet giant Amazon spends more than $7.2 billion on marketing across the world, and data analytics is one of Amazon's core areas. For large corporations and businesses worldwide, Data science has become the proverbial Vorpal Blade for them, all with the desire to have it be put to use to cut costs and anticipate customer expectations.
The Dangers Posed Towards Smaller Businesses
Now, for major companies that are able to pull together hundreds of thousands, millions, even billions of dollars towards big data and marketing, this is all well and good. But what about if you wanted to get some insight with roughly $5,000, which would be 10 percent of a marketing budget of $50,000.
How much would that buy that business? Well, right now, that isn't much at all, as research experts from DATAVLT go on to explain. “If you do not have five to six figure budget, you will not get anything of value out of the data”, this is according to Michelle Yeo, the co-founder of DATAVLT.
According to the company, PayScale, a median salary for a data analyst based in Shanghai, in China is estimated to be $14,000 a year. In Singapore by comparison, the same skill set is worth about $33,830 per year, this is without bonuses.
Now, one thing to bear in mind is that this is regarded as a bare minimum expense required to be even able to just analyze data at least some level of sophistication. Expensive analytical tools add even more to the price, all without any break-through results being guaranteed out of it all.
DATAVLT states that if their predictions are believed to be correct, the first businesses in line for this company-based extinction event would be small and medium-size businesses.
The Need For Affordable Intelligence And Analytics
In spite of all the doom and gloom, the DATAVLT team sees that there's an opportunity for companies like itself to make a change.
The company positions itself as one of a range of affordable Software as a Service (SaaS) data analytics product specifically for any small to medium scale business interested in taking advantage of the same systems available for big businesses.
Some of the best potentials for demand is believed to be in the Asia and Pacific regions. It banks on the application of blockchain technology in order to serve as a cost-cutting tool. Even with a share of what would amount to less than 0.01 percent of the current market, DATAVLT intends to achieve a revenue of about $50 million over the next seven years.
DATAVLT's platform crosses all available and relevant customer data elements. Some of the examples include services consumption, communication, and behavior, with other areas being external open data sources. This kind of engine takes into account the information which derives from economical, sociological, and anthropological aspects.
This then correlates to the data with behavioral inputs like profiling, tonality, and sentiment. The result of this correlation is data which is much deeper and analysis that is more meaningful, the company says.
“It is about empowerment. In an age where the norm is for large corporations to dominate, we can build something inclusive where independent brands can thrive and play a role in building the community together as an alternative. For that to happen, we actually have to help each other out”, says Michelle Yeo.