Is the internet of things the next frontier for marketers february 10, 2014
Is the Internet of Things, the next frontier for Marketers?
The Internet of Things (IoT) will bring more and better connectivity to our lives outside work and the home. Most
notably the Internet of Things will include wearable computers (clothing, FitBits, Google Glass, watches, wristbands
etc.) transportation (cars, buses, subways etc.) and smart appliances (air conditioners, refrigerators, vending
Extending connectivity beyond our offices and homes will result in more sensors and controls being able to track
more data about each and every one of us. This will have the positive effects of gaining more knowledge about our
lives and allow brands to connect with us in increasingly more useful ways. It will also mean that there will be fewer
places to "escape" the internet. In turn this will spawn a counter-movement, where products and services will arise to
block out technology and provide us with refuges from it.
The following post explores some of the ways marketers can take advantage of both the added information and touch
points about people, and indeed to be proactive an understand that tracking and additional connectivity is not always
1. Business models.
The additional connection points of the Internet of Things, is already spawning new types of business models,
a.) Crowd-sourced signals - by tracking cell phone signals or connected car signals and overlaying this data on a floor
plan or road grid, marketers can better understand human and vehicular traffic patterns. For shopping malls
and supermarkets, the information on how the crowd moves, and indeed how different demographic and
psychographic segments of the group travel, is resulting in different forms of shopper marketing. For example, shops
are now planned in malls based on traffic patterns, and products are merchandised at points that touch the maximum
number of prospects based on shopping patterns.
b.) Efficient targeting of advertising - Marketers can also better target communications e.g., Free standing inserts, by
analyzing anonymized cell phone or vehicle tracking signals to understand the journey their customers take to get
to their stores. By knowing the location of their customers they can be more efficient and reduce "spill". (Law
enforcement officials currently use this to track down individuals related to crime scenes as they can generally secure
access to the personal information behind the anonymized data.)
c.) Personalization - with more and better data available on how consumer conduct their lives (heart-rate, distance
travelled etc.), marketers will have better intelligence and insights and will be better able to serve up offers in a
personalized manner to consumers. This will not take us back to the day when the storekeeper knew your name and
indeed your family; but it will result in more personal attention to your particular needs.
d.) Vendor relationship management and Personal data lockers - as Doc Searls has predicted in his book The
Intention Economy, consumers will start to push back against the sophisticated CRM systems of marketers. They will
do so through Vendor Relationship Management (VRM) whereby they will control their personal data and rent it to
marketers for specified uses and times. This will be supported by personal clouds or personal data lockers where our
data will be store and shared to authorized vendors for a price.
e.) Machine requested restocking - with build in intelligence and the means to connect to a network machines can talk
with other machines (M2M). For example the ubiquitous vending machines in Japan could place refill orders
themselves through the Internet of Things.
f.) Paying to sunset data - companies such as Ashley Madison (a site for married people who want to have affairs),
charges its uses USD20 to destroy sensitive data. People will pay to have sensitive data destroyed. People will want
to retain their privacy and paying to dispose of a digital record could well become popular.
Different business models will also emerge as the Internet of Things becomes more pervasive.
2. New Products and Services.
a.) Smart modules - there are an increasing number of ways to make objects smart, including bar codes, QR codes,
Digital signatures and smart modules. This type of business will naturally grow in proportion to the Internet of Things.
b.) Product life extension - by monitoring and reporting problems, the Internet of things can help with preventive
maintenance, thus extending the life of a product such as a motor vehicle.
c.) Analytics and pattern discovery - a key growth industry in this era of "Big data" is analytics and visualization - ways
to glean insights and intelligence from the growing amount and quality of data.
d.) Heath products - as ageing societies such as Japan, China etc. become more health conscious there will be more
sensors to track the well being of people, wherever they may be. This type of tracking can help safe lives by
proactively detecting problems as well as reactively calling for help. For example, an automobile involved in a crash
could be programmed to automatically call for help based on preset parameters e.g., extreme deceleration or rollovers.
e.) Advanced Chinese medicine - while this may seem like heresy to traditionalists, tracking one's pulse through
wearable technology such as watches or wristbands could enhance the complex pulse diagnostics that are a
cornerstone of Chinese medicine.
f.) Sharing fixed assets - as AirBnB and Zipcar have shown us in accommodation and automobiles respectively,
significant businesses can be generated by using the downtime of capital goods. With built in sensors in everything
from computers to washing machines networks can be notified of excess capacity, making more efficient use of fixed
g.) WiFi networks - as connectivity comes to machines and buildings WiFi networks can develop bringing competition
to traditional wireless operators.
h.) Unique types of design studios- while expanding connectivity can be beneficial it must be done in context of the
environment. For example the form factor of wearable devices is small and personal so careful consideration must be
given to the User experience. Similarly in motor vehicles, applications should be voice and/or gesture powered to
help ensure that the driver keeps his/her eyes on the road and hands on the steering wheel. The Internet of Things
will give rise to more voice powered and gesture powered interfaces. To make this work, new types of design will
i.) High security/encryption services - many people will pay for added ways to keep their data more secure. This
demand will give rise to new forms of data protection.
3. Production and distribution channels.
A more connected life can mean different ways to manufacture and distribute products.
a.) Smart appliance to supermarket communication - today' refrigerators are becoming stock management systems
with the ability to communicate stock level, produce quality and expiry dates. This data can be transmitted via M2M
network directly to you or your grocery store for restocking and delivery purposes. In this way you will "never" run out
b.) Makers movement - with digital 3D printing linked to mobile, products can be produced where you are heading,
reducing the need to transport them from origin to destination.
a.) Variable pricing - the technology is already in place to set personalized pricing. This is most evident in the airline
business where each seat on a particular flight could be priced differently. Such variable pricing is also coming to
eCommerce and will be accelerated by knowing more about your customers’ attitudes and behaviour with respect to
b.) Location based pricing - special offers can be served to you based on where a connected individual is walking or
c.) Pricing based on behaviour - rental car and car sharing companies can provide pricing discounts for drivers that
treat their vehicles respectfully.
The Internet of Things clearly adds a number of new "channel" for brands to interact with consumers.
a.) Location based services (LBS) - advertising can be transmitted from Infrastructure (restaurants and shops to
mobile devices and vehicles, as the network realizes you are approaching a retail outlet.
b.) Augmented reality (AR) - given that there will be new "screens" that you wear, in your car and on your appliance,
AR programs indicating diagnostics and additional information will become more common.
c.) Time sensitive, personalized messaging - not only will the network be better able to serve up personalized
communications, it will be able to do so on a more timely basis.
Search will also evolve to incorporate the context from the new points of connectivity. For example, search will be
more content relevant to smart appliances such as refrigerators - perhaps finding the locations with the best price for
declining groceries. Similarly search for Connected cars will take into context the vehicle, its surroundings and
Social media will also take advantage of the Internet of Things building communities for those who have wearable
computers. It will also become available for Connected cars both to link of communities of friends and communities of
The opportunities and challenges of the Internet of Things are only starting to unfold. While it's impossible to predict
the future, the early signs are that the IoT will help marketers on many levels.