To sign up for our daily email newsletter, CLICK HERE
The growing Internet of Things (IoT) gadgets sector has become a fantastic windfall for the data industry. IoT devices are a wide range of internet-enabled and connected gadgets that can communicate with each other via networks. These devices have a multitude of uses but data miners love them for their information gathering features.
Amongst them, there are devices whose sole purpose is collecting and transmitting data for processing. Since they are perfectly connected, IoT devices increase market reach and have enhanced functionalities. It is estimated that there will be over 41 billion of these devices online by 2027.
By 2030, the world will have an excess of 125 billion of these devices. Most vehicles worldwide will become part of the IoT grid. These massive numbers of devices will gather and analyze tons of data contributing massively to the alternative data industry.
What is alternative data?
Traditional data sources include company sales figures, financial statements, and SEC filings for financial businesses or your business’s financial statements. These sources of data are valuable but they hardly ever give a sufficient and timely picture of business demands and operations in a data-driven era. To avoid any calamities, businesses should take help from information suppliers or management leaders like those of HICX Solutions.
When businesses need actionable insights from data they turn to alternative data. This data set has become so popular in financial institutions and hedge funds that traditional money managers are scouring the world for it. Fund managers have invested a lot of capital in the collection, organization, and analysis of alternative data from non-traditional sources to give them an investing hedge in the market.
Most of this data today comes from satellites, sensors, financial transactions, web traffic, news sites, mobile devices, or public records from external sources. The need for alternative data has encouraged the growth of aggregators and data broker businesses that supply alternative data to businesses.
Since alternative data can offer additional real-time insights that traditional data cannot, via computation and machine learning, industry giants like Goldman Sachs and J.P. Morgan are endorsing its usage and support it in research. J.P Morgan has, for instance, invested $3 billion in the acquisition of alternative data.
Major sources of alternative data
● Most of this data originates from individuals who post it on social media platforms or e-commerce page reviews. You can also access this data from search engines.
● Businesses also produce exhaust data from business processes such as sales and credit card transactions and government agencies data.
● Sensors placed in machines, CCTV, parking lots, or POS systems produce unstructured data that can provide vital business insights. Geo-location gadgets and satellite imagery are good sources of such alternative data.
Major classes of alternative data
Now that you understand what is alternative data, it is time to classify its different data forms.
- Web data is a popular type of alternative data. It is generated from click-through dates, web searches, demographics analytics, and web traffic data. It is commonly used in the advertising and marketing sector giving business insights for e-commerce and market research.
- Social sentiment data is mined from social media comments and posts as well as public reactions and reviews. This alternative data is a fantastic source of brand vitality and trends of data insights.
- Geo-location, Wi-Fi and Bluetooth signal data is a good source of location-based business information.
- Credit card transactions and email receipts are a good source of retail revenue as well as customer payments history data.
- Point of sale data can offer price trends, product popularity, and customer preferences and sales volumes alternative data.
- Satellite imagery data is expensive to obtain but can give large-scale economic, agricultural, supply chain, storage and tracking data.
How is alternative data obtained?
Alternative data for business insights and trends can be harvested in three main ways;
Web scraping also is known as data scraping or web harvesting. It is an automated process of online data collection. The process is carried out by programmed codes or bots integrated with artificial intelligence technology.
These bots can crawl and scrape data from thousands of web pages at a go, and download it as a local computer file or send it to a database. The best web scraping tools utilize a rotational pool of residential proxies to prevent detection when scraping which can lead to the blocking of IP addresses.
Raw data acquisition
Unprocessed raw data can be obtained from most IoT gadgets. This data, however, has to be cleaned, analyzed, and processed before it is of any use to your business.
There are data aggregator businesses that collect and analyze exhaust data, process it, and sell it to other businesses.
IoT gadgets are cropping up in every part of the globe with 127 of them connecting to the World Wide Web every other second. They are not just sophisticated communications gadgets like smartphones either. Clothes, tennis rackets, diapers, homes, even pets, and livestock identification chips are all connected to the internet, each bringing in its set of data.
This alternative data explosion has given rise to a new data toolset very popular amongst businesses. Access this vital business tool for your business and enjoy the benefits of Big Data.