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Businesses now understand the value of data sources. These options may not have even been on their radar in the past. One of them is alternative data sources.
For those who don’t know, this is information taken from nontraditional sources. This new market research method helps companies predict and observe the success of a product or campaign.
Types of Alternative Data
To further understand what constitutes alternative data, let us take a look at the different types that exist.
Credit Card Transactions
Data sourced from debit and credit card transactions come in handy at tracking revenue. This offers accurate and insightful information about consumer habits and behaviors.
These are obtained upon purchase of service or delivery of a product through invoices, opt-in email responses, rewards app bonuses, and more. The data is good at retail revenue tracking.
This is information from devices that track the physical location of the user. It comes from GPS, Bluetooth, and Wi-fi signals. The data can help businesses make location-based decisions.
Point of Sale Transactions
The data mined from these transactions offer insights into sales volume, prices, and revenue. It also lends a deeper understanding of product popularity and consumer preferences.
This increasingly popular source of data comes from low-level drones and satellites. The raw data comes in the form of images that are then processed to get the desired information.
Alternative data from text posts, videos, and images on social media offers valuable insights on trends and virality. This includes how the public reacts to product ads, the news, and more.
This is any information that can be extracted from a website. Web traffic, demographics, top web searches, and click-through rates can help gauge the success of an ad company or product.
The elements also dictate economic decisions. This type of alternative data comes from pressure sensors, thermometers, precipitation sensors, and the like.
Challenges of Obtaining Alternative Data
The non-traditional sources can make things challenging for alternative data collectors. Here are some of the obstacles that they normally face:
Poor Quality Of Data
One of the biggest obstacles is ensuring high-quality data. The problem lies in telling useful and unhelpful information apart. Likewise, you also need to confirm that the data is coming from a legal and factual source to ensure that it offers accurate knowledge.
Alternative data collectors have to deal with how unstructured many sources are. The raw data is often disorganized because it was not made to be used this way. The data gatherer often has to spend plenty of resources and time extracting, cleaning, and processing the data.
Some websites restrict access to users from certain parts of the globe. This can make data collection tricky, but there is a way to get around it. If you can’t access a site available only within the United Kingdom, you might be able to get in by using a UK proxy. Follow the link to learn more about the UK proxy.
Licensing fees must be paid to gain access to financial transaction data. Aside from this, processing the information can be costly. Analytical resources, computing power, processing capacity, and storage server are necessary to process a huge volume of information.
How to Navigate These Obstacles
Alternative data offers rich sources of new information for businesses and individuals alike. While the process might sound daunting, there are available tools that can make the process easier.
Web scraping is a cheap and common alternative data collection method. This automated technique uses tools to collect data and get insights into customer preferences. You can scrape public domain websites to get useful information without spending too much money or time.
However, website servers might catch robotic activity and ban the IP address you are using. You will be unable to access the website once the scraping tool is detected. It is a good thing that you can use a proxy to hide the real IP address. The software sends browser requests through a different server. It can also help bypass the geographical restrictions of the website.
It is important to understand customer behavior and preferences if you want your business to succeed. You should always be on the lookout for new data sources to gain an edge over your competitors. This is not quite as complicated as it might sound. Alternative data offers a goldmine of information that can be utilized to make better business decisions in the future. By using the right web scraping tool and proxy server, obtaining this information will be a breeze.