Alternative Data Category Description
App and Internet data covers a broad range of alternative data that is collected via apps installed on users’ devices and through users’ online behaviors and preferences. App data is generated, collected, and stored by mobile applications on smartphones and other mobile devices. This data can include a wide range of information, depending on the specific features and functions of the app. It includes usage data where apps track how users engage with the app and other apps on their devices that capture the features they use, the pages they visit, the length of time they spend using the app, and their location. It can also provide data on the devices that the user has the app installed on like the operation system and the make and model of the device.
Internet data captures the users’ online behavior including their search history, the websites they visit, the time they spend on certain pages, their purchase intent, their online journey, and more. This type of data is captured through various sources via SDKs installed in apps. SDK stands for Software Developer Kit and gives app creators a set of tools that makes it easier for them to create apps but in return, SDKs can capture users’ data. This type of alternative data is very granular and can capture usage time, app event tracking, user demographics, app engagement, DAU/MAUs, app retention rate, app churn, and more. Macro-level data can also be collected via app stores like app ratings & reviews, app rankings, app downloads, and estimates of revenue.
Internet data can be sourced through several methods and via first or third-party providers. Some techniques include: Cookies: When you visit a website, the website may send a small file called a "cookie" to a user’s computer or mobile device. This cookie is stored on a user’s device and contains information about their visit, such as the pages they visited and the links they clicked on. When they return to the website, the cookie is sent back to the website's server, which can use to personalize their experience and track their online activity. Tracking Pixels: Tracking pixels are small, transparent images that are embedded in web pages or emails. When a user visits a webpage or opens an email that contains a tracking pixel, it sends a request to a server, which can then track a user’s online activity. Form submissions: When a user fills out a form on a website, such as a login form or a contact form, they may be asked to provide personal information, such as name, email address, and phone number. This information is collected and stored by the website. Server logs: When a user visits a website, their computer or device sends a request to the website's server, which records information about the request in a log file. This information may include the IP address, the type of browser used, and the pages visited on the website. Third-party tracking: Many websites use third-party tracking tools, such as analytics software or advertising networks, to collect data about their users. These tools may use cookies or web beacons to track online activity across different websites and may combine this data with other information they have collected about users.
Subcategory - App Usage Data
App usage data is a type of alternative data that tracks track how users engage with the app and other apps on their devices that capture the features they use, the pages they visit, the length of time they spend using the app, and their location. It can also provide data on the devices that the user has the app installed on like the operation system and the make and model of the device.
Subcategory - Internet of Things (IoT) Data
IoT data is a type of alternative data that captures data about the connection of devices, such as sensors and appliances, to the internet, enabling them to send and receive data. These devices are often equipped with sensors that can collect data about their environment, such as temperature, humidity, and movement, and can use this alternative data to perform a variety of tasks, such as monitoring and controlling systems, automating processes, and collecting insights about their surroundings.
Subcategory - Online Search Data
Online Search data is a type of alternative data that is sourced when a user uses a search engine, like Google. The alternative data captured provides insights on search queries and what is trending, what the search results are and in what order the results are returned, data about the user that searched, and data about the device, browser, location, and operating system used to perform the search.
Subcategory - Social Media Data
Social media data is alternative data that is gathered from social networking platforms like LinkedIn, Twitter, Facebook, TikTok, etc. The data collected can provide insights on users from their profiles like what they say about brands or their employment history and education level. It also covers content that users create like posts, videos, photos, etc. It can also capture how users interact and engage with brands online by looking at what users like, share, and comment on and running sentiment analysis on users’ comments of brands and companies. This again can also be used to source information on which devices or OS are being used.
Subcategory - Web Traffic Data
As mentioned in the introduction, Web Traffic alternative data provides insights into what users are doing on the web looking at what sites they’re visiting, what pages and links they’re clicking on, how long they are spending on certain pages, and their purchase intent.
Data Structure
- The structure of this type of data varies a lot because it is such a broad category.
- In this category, 5+ years of historical data can be considered a lot as the technology to capture and monetize this data is relatively new.
- Update and delivery of the data can be quick with intra-daily possible from the top vendors.
- Most delivery methods are possible with this type of data, depending on the vendor's capabilities, but the top vendors in this category will be able to deliver to any cloud environment, and provide the data via a platform, and also via an API.
Compliance Considerations
When it comes to app data, there are several considerations that must be taken into account prior to ingesting this type of alternative data. Top of the list is data provenance. Has the user opted-in to allow their data to be collected and shared with third parties?
It is important to ensure that the data being purchased is collected and processed in a way that complies with relevant data privacy laws, such as the General Data Protection Regulation (GDPR) in the European Union or the California Consumer Privacy Act (CCPA) in the United States. There were instances in the past where a user might use a free VPN app, social media app (Like Instagram, Facebook, Twitter / X, TikTok, etc.), add-blocker app, etc., and unknowingly to the users, this app was collecting cross-app data from the user and selling this data to third parties. The free cost to the consumer is offset by the value of the data collected by the app manufacturer and is either used directly by the developer or sold to third parties. This technique is used by a few app data vendors. In recent years it has become vital that all consumer data is opt-in, the consumer opts in to share their data rather than just agree to some vague T&Cs.
It is also important to understand the agreements that Apple and Google have in place with developers in their stores. The companies have quite different developers' agreements and so buyside firms must pay attention to how alternative data providers collect the data and assess if panel sizes are at risk due to potential regulatory changes. Additionally, these app developer agreements are not very well written and some buyside firms steer clear of buying app data altogether since the app developer licensing isn’t always crystal clear. An example of this is from December 8th, 2020, Apple updated its policy requiring developers who submit new apps and app updates to the Apple App Store to provide information on the apps’ privacy practices. And then On May 6th, 2021, Google announced similar updates to their policy as Apple.
Developers would have to provide information when submitting new apps to the Google Play store, as well as any app updates. Some guidelines have been provided on specific pieces of information developers will have to provide. This includes if they employ security practices like encryption, whether it follows Google’s Families policy, data that is needed for the app to function, whether users can choose not to share, and if the user can request their data be deleted. The new policy also requires that the app developers outline what types of data will be collected and stored. This includes location data, user contact information, media files, and other data points that can be collected), and also how the data will be used (i.e. to improve the experience for the user, for advertising, for aggregation, and sale).
Data quality is also important to take into account. As an alternative data buyer, you must ensure that the data being purchased is stored and transmitted securely to prevent unauthorized access, misuse, or access to MNPI.