For the past ten years, the growth of data generation fueled by increased computing power and personal device usage has led to an expansion in the use of alternative data. Alternative data sources, which are used to make analyses that are not traditionally employed, include proxy metrics as well as information from unofficial sources. This data can provide a more accurate insight into company performance than conventional data sources, such as financial statements, press releases, and management presentations. Initially, there was much skepticism about the use of alternative data; however, many organizations and investment firms have since seen the potential it holds and embraced it.
How Is Alternative Data Generated?
Alternative data is collected through various processes, such as product reviews, social media interactions, credit card and sales transactions, and sensors through satellite imaging and geo-location devices. These data types are gathered mainly through three primary methods: web-scraping, acquisition of raw data, and third-party licensing. Web scraping involves using written code to access and collect information from the internet, which is then saved in a spreadsheet or other form suitable for analysis. Raw data is unprocessed information obtained from a sensor, which some companies license and process for sale to other organizations. Alternative data categories include data on app engagement and reviews, debit and credit cards, email receipts, foot traffic data taken from wi-fi signals, satellites, surveys, and data scraped from public websites, as well as data extracted from text processing on social media.
What Is the Importance of Alternative Data?
Alternative data has been dubbed the “new oil” of the finance and investing sector. Its use is becoming increasingly widespread, with organizations like Orbital Insight taking advantage of it by monitoring parking lots through satellite imagery and selling the data to determine shopping patterns. Investment strategies are continuously being adapted to better incorporate data into decisions.
Why Do You Need Proxies for Alternative Data?
One of the most popular ways of collecting alternative data from the web is by means of web scraping. But extracting this huge amount of data can be a challenge. Web scraping tools make this task much easier by allowing you to fetch millions of data points in a short span of time. However, many websites have implemented anti-scraping protection that detects any unusual activity, including web scraping requests. It is important to note that web scraping is not illegal, but it is prohibited on many websites.
To counter this, proxy servers can be used to act as an intermediary between your device and other online servers. Proxies replace your device’s IP address with their own, thereby helping to prevent detection by anti-scraping tools. This allows you to collect various types of data quickly and effectively.
What Are the Best Proxies for Alternative Data?
ProxyCompass provides an ethical, state-of-the-art solution for data gathering with residential proxies. Residential proxies are real devices (PCs, laptops, phones, or tablets) issued with ISP-issued IP addresses, making them impossible to detect and flag by most anti-scraping measures. With a large range of residential IP addresses in different regions, ProxyCompass is the perfect option for efficient data gathering at prices anyone can afford, all while ensuring client privacy is kept secure!
