Breezy Briefings is pleased to present a brand new essay series by Abraham George titled Why Data Is The New Oil? Subscribe using the button above or Telegram to receive the latest updates as soon as it is published.
Advertising is big business - especially digital advertising. Traditional mass media (telecast, broadcast, print) is losing its impact and relevance today. Street hoardings still retain some appeal but then again it’s very localized in terms of reach. The growth in data collection, mining, and the application of artificial intelligence and machine learning has taken digital advertising to a whole new level. Through the upcoming articles, I will highlight its impact on consumer behavior and how business models are adapting to the legislative challenges and spinning off new business models.
The two tech/media companies that have historically and still are dominating the digital advertising space are Google and Facebook. But this could be challenged and they themselves will be forced to morph their business model. A little over the last two decades we have knowingly or unknowingly entrusted gigantic heaps of our personal data to these two companies for free. They have monetized our personal data to make an incredibly exponential profit for themselves. This is now broadly referred to as ‘surveillance capitalism.’ One only needs to look at their 2020 revenues to get an inkling of how successful this business model has been. Google made revenues of $169 bln while 98% of Facebook’s revenues came from digital advertising giving them close to $85 bln.
You may not agree with their ethics or business model, but you have to admit that they are one of the most successful companies in the world. I’m sure that you have all heard the catchphrase “Data is the new oil”. What does that really mean?
Though oil does not form part of the consumer price index (CPI) due to its extreme volatility, for decades, oil has been the most important commodity that is a key driver in a multitude of economic activities and business endeavors. There are different grades of oil and different processes that determine its pricing and various use cases. Similarly, data has become very important in maintaining competitive advantage and granular data deciphering gives you the extra edge in business and keeps your rivals at bay.
There is an important change that is taking place in the digital advertisements space. A new regulation is being implemented that will have drastic consequences for the future of digital ads. One company is well prepared for these upcoming changes and is perfectly positioned to take advantage of them. Stay tuned for more on this.
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Abraham George is a seasoned investment manager with more than 40 years of experience in trading & investment and multi-billion dollar portfolio management spanning diverse environments like banks (HSBC, ADCB), sovereign wealth fund (ADIA), a royal family office and a hedge fund. Currently, he is setting up a hedge fund where foreign citizens can invest in Indian growth stocks like Tanla operating in hyper-growth markets like CPaaS.