Here are three types of alternative data that can elevate your investment strategy

Alternative data isn’t just for hedge funds anymore. As investors continue to chase alpha, firms will put even more effort into using different data sources–like web scraping and sentiment analysis. These tools have applications for digital marketers, too.

If you’ve got your finger on the pulse of the fintech industry, you likely know about alternative data. Alternative data, the flipside of traditional data sources like quarterly reports, gives investors a leg up on the competition, as well as deeper insight into corporate performance. The data can include anything from satellite imagery and IoT data to credit and debit card transactions.

Alternative data: from hedge funds to everywhere

While alternative data emerged as a way for hedge funds to outgrow their competitors by using creative and nontraditional ways of gathering data, now it’s par for the course for stock trading–used by hedge funds and other types of investment firms alike. In fact, more investment firms are using alternative data than not.

Some types of alternative data have been used for years in digital marketing–take social listening and sentiment analysis, for example. Brands will often check in on what consumers are saying across social media apps and in product reviews, in order to improve both their offerings and engage in the conversation their customers are having. And that’s only the first of many alternative data tactics companies use to improve their marketing outreach and campaigns.

Below, we’ll examine three types of alternative data.

Social listening

Long used by investment firms as well as digital marketers, social listening–and additionally the crossover tool sentiment analysis–allow a brand to listen in on the conversations consumers and prospects are having on social media and across the web. Using language learning models and AI, brands can perform social listening on a large scale and engage with what customers are saying.

What are people saying about your product? And how can you address their concerns, their quips, or more? Can you turn that into a brand campaign of its own, showing you know your audience? Can you address them? 

Who are your brand’s Instagram followers? Facebook followers? Are consumers saying things about your brand on X?

Responding to trends in real-time, or scraping reviews on your products to see what issues people are having–or what they’re liking about them–can form the backbone of a new campaign, as well as improve customer engagement and feedback. When customers know you’re listening to them, the customer-brand relationship deepens–improving both conversion and lifecycle marketing. 

Web scraping

Web scraping uses AI and machine learning to sift through tons of different websites to gather information on what’s being said about your brand across the web–or alternatively, what’s being said about your competitors around the web.

This automated process breaks down large swaths of data into a database that can be used by marketers to develop breakthrough insights–whether on trends, the market, or sentiments around your brand.

Geolocation data

Geolocation data can be particularly useful for a campaign, especially when you can use these insights for location-based advertising or for brands with brick and mortar locations. A good basis of geolocation data can lead to effective mobile ads and encourage online buyers to visit physical stores.

Even more types of alternative data

There are a lot more sources of alternative data that can apply to digital marketing campaigns and investors. There’s credit and debit card information, email receipts, mobile app data, and more. The data-driven strategy you need can go beyond Meta and Google’s walled gardens–and beyond cookies. 

The number of alternative data providers has skyrocketed in recent years–so if there’s a particular set of data you need, it’s likely you can find it. And as AI and machine learning, as well as large language models, improve, alternative data sources will become even more robust and reliable. 

It seems that some doors open exactly when other ones close–so as we bid adieu to cookies, now is also the time to say hello to alternative data.