At ICOM, Chandos Quill of ACXIOM spoke on a panel about business models for data partnerships with representatives from Winterberry Group, IPG Media Brands, IBM, and Ebiquity. Here, she considers the ideas behind the term and how we might nuance our understanding.
The word partnership tends to be overused to encompass client or vendor relationships as well as actual partnerships. And, on the panel, you had a wide variety of companies from consulting and services to data and technology. The business models and partnerships for each of these industries can be quite different.
For example, as a data company, the primary business model used for years has been to ‘partner’ or work with companies to acquire data to build products and services using a royalty model. There’s also the list management/list rental model, where data companies represent certain data sets to the market and handle all the order and fulfillment of data. Over the past few years, the business model for data partnerships has begun to change from data acquisition to enabling data everywhere. This change is being driven by three major trends.
Big Data – with the rise of the internet and the advancement of technology and analytics, the amount of data being collected by all kinds of companies has grown tremendously. Companies of all types are creating interesting and unique data, either intentionally or unintentionally. This means that it’s not just data companies that will be partners; partnership models need to be created to support data monetization for companies that aren’t in the data business but are collecting unique data that can be valuable to others, especially when mingled with other unique data sets.
Machine Learning – new technologies to support advanced analytics such as machine learning will change the way companies partner in the data industry. Machine learning will allow for faster and more intelligent combining of data to create unique data sets that will fuel the marketing ecosystem.
Blockchain and Bitcoin – with all the unique and valuable data that will be unleashed, the last major impact on business models for data partnerships will be the use of blockchain and bitcoin. These technologies will open the opportunity to create global partnerships that connect buyers and sellers of data in a massive and secure data ecosystem.
All of these advances and changes will enable us to rethink and redesign business models and partnerships in the future. And it will be even more important than ever to have a clear definition for partnerships and an understanding of which companies are clients, vendors or partners. In managing partnerships, there will still be some fundamental principles that will exist even with all the changes in the future.
- Avoid partnering for partnership sake. Align the partnership strategy closely to the overall business and/or product strategy. Partnerships take time and resources, and if they are not closely aligned with the priorities of the business, they will not get the resources and focus needed to survive long term.
- Don’t be afraid to say no. After spending time working on a partnership, the value proposition should become very clear. It should be something that can be easily understood across the organizations so that people can rally behind it and understand why the partnership is important. If a clear value proposition can’t be created, it may be a partnership that needs to be put on hold or passed on. Oftentimes, this important step is missed or dismissed, which increases the chances for a failed partnership.
- Make sure there is life after the contract. Too many companies focus on getting that partnership contract signed and fail to focus enough resources, time and process on making sure the value of the partnership gets fully executed after the contract. A partnership is an ongoing relationship that needs time to develop and must be nourished.