The Weather Network’s long-term forecast: data, data and more data

July 28, 2020 | John Stackhouse


To succeed in the post-COVID economy, businesses will need more than just a pivot to digital – they’ll need to lean into and harness data to gain an advantage.

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Before the COVID pandemic, the International Data Corporation projected data creation to grow to 175 zettabytes by 2025, 10 times the amount of data created in 2017. That number could soon well be higher, given the lockdowns that have forced businesses to rapidly pivot to online.

Few other companies understand the importance of data as much as Pelmorex Corp, which owns the Weather Network in Canada and El Tiempo in Spain. It’s the third largest weather platform in the world, attracting 60 million users to its business each month.

In an RBC Disruptors conversation from February, 2020, Pelmorex’s CEO Sam Sebastian shared how Pelmorex uses data to create insights for its clients and how companies can collect and capitalize on data as a resource to grow their business and gain an edge.

With COVID upending traditional business models and accelerating the shift to digital, it’s more important than ever for firms to tap into data and use them to power their growth. Understanding how customers behave, sales trends, and yes, even the weather forecast, will be critical to succeed in the new economy.

Data isn’t the new oil. It could soon be much bigger.

Heading into the 2020s, data is worth more than $200 billion to the economy, according to Statistics Canada. That’s almost as big as the value of Canada’s established reserves of crude oil, at roughly $300 billion.

When it comes to regulating this new virtual resource, the public can be just as conflicted over it as we are over the stuff in the ground, as the federal government may soon discover.

Sam Sebastian, one of the country’s leading data executives, worries governments may want to exert themselves too much in the name of privacy protection. And that may hold Canada back in a new era of growth in the so-called intangibles economy, where firms with a growth mindset around data are excelling.

Sebastian’s company, Pelmorex Corp, owns the Weather Network in Canada and El Tiempo in Spain, making it the world’s third largest weather platform, attracting 60 million users a month to its business of “weather information systems.”

Sebastian, who spoke at RBC Disruptors, our regular event series exploring innovation, believes excessive regulation could stifle a new generation of innovation on the internet, including universal, free access to information like weather forecasts. About 70% of Pelmorex’s revenue model is advertising-based, which depends on user data.

To keep that data flowing, Sebastian argued, we need a principles-based approach around transparency and user protection – and to be careful not to hinder the ability of smaller companies to compete.

He pointed to Europe’s new law, known as General Data Protection Regulation (GDPR), as having an unintended consequence: it was designed to protect individuals but may have benefitted large companies like Google and Facebook because they have the resources to stay compliant with complex regulations while small and medium businesses are left vulnerable to potential fines and penalties.

“I don’t know if governments are always the answer,” Sebastian said.

The Trudeau government is exploring the biggest changes to privacy legislation in 20 years. And while many entrepreneurs and business leaders like Sebastian have pushed for a principles-based approach, privacy advocates want clearer rules and restrictions, especially in new fields like artificial intelligence.

Sebastian said Pelmorex uses a simple and transparent approach to data management to build the Weather Network into the country’s fourth most frequently used app. One example: the terms and conditions page on its website is only 1,972 words. AccuWeather’s is 4,000; Facebook’s is 12,000.

The keys to capitalizing on this rich new resource are to:

  • find ways to use data to become more relevant to customers;
  • build public trust through data;
  • use data to be more efficient to shareholders;
  • enhance data to be more impactful to our communities and our world.

Tell your users what you’re doing and why, and outline in advance what you want to do, Sebastian counselled the audience. “You just have to communicate in a way that’s pretty straightforward.”

Companies need to take an entrepreneurial approach to data, not a legalistic one. With only 400 employees, Pelmorex has been able to gain 60 million monthly users.

To develop a more entrepreneurial culture around data, the company created a separate “Data Solutions” unit that has its own culture, speed and freedom from revenue-driven targets. It’s also used acquisitions, like its 2017 purchase of Addictive Mobility, Canada’s largest mobile-first data management and media buying platform.

The acquisition reminds Sebastian of the lessons he learned about growth culture from his time working at Google – that it’s not about the free food or relaxed workplaces so much as the opportunities for employees at all levels to feel like they’re changing the world with their work.

He also knows Pelmorex’s growth is fueled by more than data. The company employs 50 meteorologists to keep ahead of Google’s surface-level weather reports, melding the art and science of forecasting.

Beyond daily commutes, weather is a huge variable in many businesses around the world. Pelmorex is able to offer value to other businesses, taking their sales data and matching it up with historical weather data to help businesses understand what to expect over the next 14-day forecast, and make informed decisions.

For all the focus on privacy, Sebastian worries we’re not focused enough on security. Last year, three in four Canadians had their data compromised. Many of us don’t understand how our data is used, or how vulnerable we might be to a hack.

To learn about how Pelmorex Corp is using AI and machine learning along with location, weather and behaviour data to generate insights, listen to our podcast episode.

As Senior Vice-President, Office of the CEO, John advises the executive leadership on emerging trends in Canada’s economy, providing insights grounded in his travels across the country and around the world. His work focuses on technological change and innovation, examining how to successfully navigate the new economy so more people can thrive in the age of disruption. Prior to joining RBC, John spent nearly 25 years at the Globe and Mail, where he served as editor-in-chief, editor of Report on Business, and a foreign correspondent in New Delhi, India. He is the author of three books and has a fourth underway.

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