January 14, 2022
Summary
The Data Monetization Index (DMI) for major retailers is in the range of 10% to 36%.
For example, Walmart has a DMI of 28.54% driven by the valuation of data relating to Walmart+ members, Sam’s Club members, advertising and supply chain visibility.
Amazon.com, Inc. has a DMI of 10.28%. Amazon is part of the Consumer Discretionary sector within the S&P 500 but has a market capitalization approaching $2 trillion. The bulk of Amazon’s DMI accrues from subscription revenues (Amazon Prime), advertising-driven user data and product analytics data at Amazon Web Services (AWS). Our DMI estimate is extremely conservative and likely does not account for the richness of data that Amazon collects from households and businesses.
A higher DMI is generally preferable across companies and industries. By way of reference, Google’s DMI is 93 percent as we will discuss in a separate blog.
Summary
The Data Monetization Index (DMI) for major retailers is in the range of 10% to 36%.
For example, Walmart has a DMI of 28.54% driven by the valuation of data relating to Walmart+ members, Sam’s Club members, advertising and supply chain visibility.
Amazon.com, Inc. has a DMI of 10.28%. Amazon is part of the Consumer Discretionary sector within the S&P 500 but has a market capitalization approaching $2 trillion. The bulk of Amazon’s DMI accrues from subscription revenues (Amazon Prime), advertising-driven user data and product analytics data at Amazon Web Services (AWS). Our DMI estimate is extremely conservative and likely does not account for the richness of data that Amazon collects from households and businesses.
A higher DMI is generally preferable across companies and industries. By way of reference, Google’s DMI is 93 percent as we will discuss in a separate blog.
Definitions
Methodology
The data valuation relies exclusively on publicly-available data sources such as SEC filings, industry research and comparable transactions from December 2021. The total value of data will likely be higher with the coverage of additional datasets. For example, Amazon gathers extensive merchandising data on its retail website. In addition, Amazon collects extensive user behavior data on Amazon Prime Video, Amazon Music and Twitch (gaming). Kroger’s DMI does not cover its loyalty members for which we did not have any information.
- Data Monetization Index (DMI) = Data Valuation / Enterprise Value
- Data Valuation is the sum of the valuation of covered datasets including subscribers, loyalty members, user behaviors for advertising, product analytics, supply chain and employees
- Enterprise Value = Equity Value + Long Term Debt - Cash, a key metric used in the investment community
- Product analytics data is user interaction behavior gathered by AWS to help improve the quality of its products
Methodology
The data valuation relies exclusively on publicly-available data sources such as SEC filings, industry research and comparable transactions from December 2021. The total value of data will likely be higher with the coverage of additional datasets. For example, Amazon gathers extensive merchandising data on its retail website. In addition, Amazon collects extensive user behavior data on Amazon Prime Video, Amazon Music and Twitch (gaming). Kroger’s DMI does not cover its loyalty members for which we did not have any information.
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