Data encoding is the process of converting binary information (programs and data) into magnetic impulses that can be stored on the magnetic surface of the disk. There are several different ways that this can be done. Floppy disks generally use the MFM (Modified Frequency Modulation) encoding technique, which is also used on old hard disks.

Due to the nature of magnetic recording, you cannot just store a meaningful sequence of bits in the same number of bit cells, since you would not be able to read it. Instead, a bit is stored by the presence, or lack of, a Flux Transition. That is, the change of polarity between two bitcells. This is further complicated because you cannot (reliably) read this data unless you use some form of clocking so you know when a flux transition has occured (a binary 1) or could have occured but did not (a binary 0).