{"id":2197,"date":"2015-11-17T23:29:04","date_gmt":"2015-11-18T04:29:04","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/using-data-to-monetize-mother-nature\/"},"modified":"2015-11-17T23:29:04","modified_gmt":"2015-11-18T04:29:04","slug":"using-data-to-monetize-mother-nature","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/using-data-to-monetize-mother-nature\/","title":{"rendered":"Using Data to Monetize Mother Nature"},"content":{"rendered":"

If you\u2019re anything like me, one of the first things you do when you wake up in the morning is check the weather.\u00a0 In my case, I fumble around for my iPhone, open up my Weather Channel app, and figure out what I should wear.\u00a0 With over 86 million monthly visitors to its web and mobile platforms, it\u2019s safe to say that The Weather Company (Weather) has quite the following. But can the most popular weather information provider in the U.S. use its internal and customer data to create a competitive advantage? IBM\u2019s purchase of Weather\u2019s digital assets and data certainly suggests so.<\/p>\n

Let\u2019s start with taking a look at how Weather uses data to create value. First, from its wide user base, Weather captures over 86 million monthly visits, and is therefore able to collect location data from a massive amount of users – far more than any of its closest competitors.\u00a0 Then, in combining its user data from location, cookies, and Weather\u2019s own weather pattern information, the company is able to create a compelling value proposition for retailers, insurance companies, and airlines, to only name a few.\u00a0 Let\u2019s use the example of retailers, and specifically Nordstrom.<\/p>\n

Nordstrom has a large inventory of winter coats and wants to both effectively advertise that product to customers who need a winter coat (to most effectively use its advertising dollars) and ensure that if a customer does want a coat that Nordstrom carries, he\/she purchases it from Nordstrom instead of another retailer. \u00a0Therefore, Nordstrom would love to reach people who live in cold areas and have shown an interest in winter coats.\u00a0 Enter Weather.\u00a0 By using its data to match online habits of its user base, along with weather patterns, Weather is able to provide Nordstrom a marketing opportunity for the precise target customer the retailer is looking for: A customer who lives in an area that is about to get cold and who needs a new coat.\u00a0 Furthermore, should weather patterns shift, Weather\u2019s data enables retailers to make real-time marketing decisions unlike ever before.<\/p>\n

\"857d3b09-c603-49a8-9e15-f573652ddcc3\"<\/a><\/p>\n

When we think about value capture, IBM describes the value up for grabs best in saying \u201cweather is perhaps the single largest external swing factor in business performance \u2013 responsible for an annual economic impact of nearly half a trillion dollars in the U.S. alone.\u201d \u00a0So, even ignoring the incremental value that retailers could capture by better targeting advertisements and products to weather patterns, the value that players could stand to capture from merely sales lost due to weather swings is significant.<\/p>\n

But, it\u2019s not just companies like Nordstrom that capture value from the model.\u00a0 The Weather Channel itself also captures value in ad revenue, as its single largest source of revenue comes from digital advertisements. \u00a0Also, in a similar value creation\/value capture model, air logistics providers will be better able to understand weather patterns and avoid costly delays.<\/p>\n

The relatively new and growing digital advertising revenue has given Weather the much needed capital to reinvest in the business to further enhance the product, attract new users, and improve its internal data collection.\u00a0 And now (post-acquisition), Weather has become a key part of IBM\u2019s business model, as IBM partners with top companies in the world to drive software and data-driven business solutions. \u00a0One of the major challenges Weather faces going forward is most prominently the risk of being incorrect.\u00a0 Despite having a plethora of data, Weather can\u2019t control the weather.\u00a0 Should the company get a prediction or assertion wrong, major marketing dollars (e.g., in retail), supply chain logistics (e.g., in retail and global logistics providers), and core business operations (e.g., in insurance) are at stake, and a misstep could cause Weather to lose a customer, or worse, credibility.<\/p>\n

 <\/p>\n

Sources: Programmableweb.com, techcrunch.com, datacreators.wordpress.com<\/p>\n","protected":false},"excerpt":{"rendered":"

Weather influences 1\/3 of the world\u2019s GDP on a daily basis. With such value at stake, The Weather Company is using big data to help companies worldwide optimize marketing, supply chain, and core business operations to capture the value that weather leaves up for grabs.<\/p>\n","protected":false},"author":37,"featured_media":2198,"comment_status":"open","ping_status":"closed","template":"","categories":[29,868,867],"class_list":["post-2197","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-big-data","category-optimizing-advertisements","category-weather"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/data-driven-value-creation-value-capture-and-operating-models\/","yoast_head":"\nUsing Data to Monetize Mother Nature - Digital Innovation and Transformation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-digit\/submission\/using-data-to-monetize-mother-nature\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Using Data to Monetize Mother Nature - Digital Innovation and Transformation\" \/>\n<meta property=\"og:description\" content=\"Weather influences 1\/3 of the world\u2019s GDP on a daily basis. 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