June 27, 2022
Market studies have shown that intangibles comprise 90 percent of the value of S&P 500 companies. Traditional definitions of intangibles include goodwill, customer lists, loyal employees, brand recognition and intellectual property but often exclude data. Intangibles are often extremely valuable. For example, in 2011, Google paid $12.5 billion for Motorola’s phone business including 17,000 patents.
The YDC team has already developed the YDC Data Monetization Index (DMI) to quantify the value of a company’s data relative to its enterprise value. YDC displays the DMI’s for hundreds of companies at www.yourdataconnect.com using public information.
The YDC team has now released the YDC Intangible Asset Index (IAI) that quantifies the value of a company’s intangible assets relative to enterprise value. An example for airlines is shown here and is based on public information for the customer asset only. The valuation of the customer asset is based on the cash flows associated with airline loyalty programs and is a partial measure of the level of brand loyalty and customer relationship.
The YDC team is passionate about demonstrating the value of data. The YDC Data Monetization Index and the YDC Intangible Asset Index will help Chief Data Officers benchmark the value generation from their programs. Over the past few months, we have talked to dozens of CDOs who are beginning to embrace the importance of data and intangible asset valuation.
We are excited to be on this journey!