DMA 740 Final Project Sec 2 Sking


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DMA 740 Final Project Sec 2 Sking

  1. 1. The Internet of Things Trend The ‘Internet of Things’ Trend -- Challenges and Opportunities for Digital Analytics Final Project Section 2: Digital Analytics Impact and Opportunities Steve King DMA-704: Digital Marketing Analytics Professor Eric Brey February 1, 2014 King 1
  2. 2. The Internet of Things Trend Cumulative Midterm Assignment – Final Project Section 2 The ‘Internet of Things’ Trend – Digital Analytics Impact and Opportunities As outlined in Section 1, Gartner believes the Internet of Things has already ignited a new era in information technology that it is in the process of disrupting every aspect of business. At its core, the IoT represents a major inflection point in the history of the Internet as connections move beyond computing devices and begin to power billions of everyday devices, from parking meters to home thermostats. According to recent Gartner studies, there were 2.5 billion devices with individual Internet IP addresses in 2009, most of them servers, PCs, smart phones and other traditional IT hardware. By 2020 that number will be 30 billion, only a small percentage of which will be standard IT equipment (Fogarty, 2013). As a result of all of these connected devices data sources are growing at an unprecedented velocity and along with it, the ability to provide insights immediately back into the marketing feedback loop. This new world of machine-to-machine communications and the resulting data have the potential to provide deeper insights into a wide array of events and buying behaviors. J. Walker Smith, executive chairman of The Futures Company, a strategic insight and innovation-focused consulting firm, believes the Internet of Things will transform static business data into a more fluid and dynamic entity that will dramatically change the face of product development, pricing, and the way enterprises interact with customers (Greengard, 2013). And Gartner estimates that by 2017 more than 50 percent of analytics implementations will make use of event data streams generated from instrumented machines, applications, and individuals creating unique new opportunities and challenges for marketing professionals (Accenture, 2014). Seeing a growth opportunity, Cisco Systems has ranked connected advertising and marketing as one of its top three IoT focus areas (Adler, 2013). Consider what U.K based software company EVRYTHNG did for Diageo’s spirits marketing business last year. It ran a pilot program in Brazil for Father’s Day that enabled consumers to use smart phones to scan product codes on individual bottles of spirits, turning each physical product into a uniquely identifiable object of digital media. The giver could use his or her smart device to create a personalized video and upload it to the cloud. The receiver of the gift could then download the video to receive the message. According to Diageo the King 2
  3. 3. The Internet of Things Trend campaign resulted in increased loyalty to the brand, increased personalization of the brand experience, and increased insight about how its products were bought, sold, and used (Rayport, 2013). U.S. food company McCormick is leveraging the capability of machines to use data to “sense” the world as humans do. Using Enterra Solution’s Cognitive Reasoning Platform, McCormick’s FlavorPrint site asks customers to rate a variety of flavors in order to learn taste and, from that, creates unique taste preference profiles. If customers provide additional information, such as cooking preferences, equipment, and typical pantry items, they can receive better personal product and recipe recommendations. As far as these customers know, they’re providing just a few raw facts in return for a great deal of personalized value. From McCormick’s point of view, learning customers’ taste preferences leads to better insights, product decisions, and enhances its ability to serve consumers (Accenture, 2014). Although existing networked systems already offer interesting opportunities like the two examples above, it represents just the beginning stages of a rapidly changing product marketplace driven by IoT. For example, within a few years an exercise band (think Nike’s Fuel Band) could serve as a mechanism that helps marketers understand a person’s everyday activity patterns in minute detail while connecting with big data and with partners to create a more refined marketing approach. For example, if a person is a runner or cyclist the manufacturer might suggest appropriate attire and shoes. Also, beverage companies such as Coca Cola or Pepsi could enable connected fountain machines in restaurants, movie theaters, and elsewhere to better adjust marketing and sales to fit constantly changing behaviors and conditions (Greengard, 2013). These current and futuristic examples demonstrate the power of the enormous data that is being created and shared across intelligent devices and systems as a result of the IoT trend. Data analytics can help to extract the untapped value to enable companies to provide better products and services while enriching consumer experiences. Exhibit 1 below provides a humorous, although not that farfetched, example of the future possibilities. King 3
  4. 4. The Internet of Things Trend Exhibit 1: King 4
  5. 5. The Internet of Things Trend References Accenture. (2014, January 27). Accenture Technology Vision 2014. Retrieved from Accenture: Adler, E. (2013, December 7). Here's Why 'the Internet of Things' will be Huge, and Drive Tremendouse Value for People and Businesses. Retrieved from Business Insider : Fogarty, K. (2013, October 7). Gartner calls Internet of Things a $3.8 Trillion New Era. Retrieved from Slashdot: Greengard, S. (2013, April 2). Marketing gets Real: The Internet of Things. Retrieved from Rayport, J. F. (2013, March 1). Advertising and the Internet of Things. Retrieved from Harvard Business Review: King 5