What do you know about the $21B location data economy? Did you know that location data companies pay 0,5–2 cents per user per month? Pay with data is one of the most revolutionary digital revenue models.

How? Apps are at the center of this new economy. The mobile location industry started as a way to tailor apps to users’ needs and target adds for geographically relevant businesses. Today, however, this industry has been transformed into a $21B data collection and analysis machine, where retailers, financial firms, and hedge funds are paying 0,5–2 cents per user per month.

The logic of Pay with data is that the customer is offered a valuable service for “free”, in exchange for granting full access to all their data. This data is then organized and either used for targeted advertising purposes or sold to third parties at a premium. How does that work? Well, on the one side, digital-based companies, like Google and Facebook, make money by collecting users’ data from their own apps and using it to sell targeted ads, track where the ads lead the users and personalize their services – which increases the lock-in effect of customers. On the other side, location intelligence and measurement companies, like Cuebiq and GroundTruth, are specialized in analyzing consumer data and selling it to investors, such as Goldman Sachs and Nasdaq Ventures. In this way, financial firms and hedge funds use real consumers’ data to improve their investment decisions.

So this is the Brain Snack of the week. If you enjoyed this content, please comment, follow us, and share this post! Also, you can explore more ways for digital transformation on www.smartbusinessmodeler.com.

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