DMA 704 Final Project Sec 3 SKing


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DMA 704 Final Project Sec 3 SKing

  1. 1. The Internet of Things Trend - Section 3 The ‘Internet of Things’ Trend -- Challenges and Opportunities for Digital Analytics Final Project Section 3: Future Impact on the Business Landscape Steve King DMA-704: Digital Marketing Analytics Professor Eric Brey March 1, 2014 King 1
  2. 2. The Internet of Things Trend - Section 3 The ‘Internet of Things’ Trend and its Future Impact on the Business Landscape At the end of Section 2 of this Final Report I included a cartoon that portrayed a not-sofarfetched scenario of how Google might leverage its acquisition of home device maker, Nest Labs. Founded in 2010 by former Apple engineers, Nest currently produces just two products: a thermostat and a smoke detector. In mid-January, Google acquired Nest for $3.2 billion – not bad for a company that shipped its first product in 2011. While the smart thermostats and smoke detectors Nest sells are significantly more advanced than standard models, Google didn’t pay a rich premium for the company simply to take advantage of the existing product line. Rather, the acquisition is a clear indication of the importance Google places on the Internet of Things (IoT) (Bram, 2014). The IoT is in the early stages of transforming the business landscape in major ways. Early experiments with internet-enabled objects are already proving this point. However along with its conveniences, the IoT will create new challenges in data privacy, security, governance and trust. I had the opportunity to discuss how the business landscape will be impacted by the IoT with digital marketing expert Patrick Di Chiro. Patrick is the founder and CEO of Thunder Factory, an interactive marketing agency that provides a comprehensive range of strategic, marketing, communications and interactive services, with a strong focus on helping clients use the latest digital media and marketing technology to generate better results (Thunder Factory, 2014). In our conversation Patrick pointed out how internet advertisers are already able to combine data from various seemingly insignificant activities to create detailed profiles on consumers. This correlated data allows advertisers to send users context aware advertising as they search the internet. However, these targeted ads are just the first generation of context aware digital content marketing. The IoT will allow marketers to take it to a whole new level. As an example, Patrick suggested the following scenario: Many people today wear daily activity trackers like Fitbit to track things like their heart rate, miles traveled, and steps taken. These sensors are connected wirelessly to smart phones and to the internet to enable users to track metrics and trends. Depending on the privacy policy in place, this information could be sold to marketers. The user might then be shopping in the supermarket and start receiving King 2
  3. 3. The Internet of Things Trend - Section 3 coupons by email or text messages offering discounts on weight-loss products because “it appears you are trying to lose weight.” In effect, the IoT is anticipating what she might want to buy based on a variety of metrics and behavioral data collected from her Fitbit. Some may welcome this unexpected opportunity to save money. However for others, this use of their digital footprint would be viewed as a serious breach of privacy. Clearly the evolution of data usage that now includes physical objects like activity sensors is creating a new set of security and privacy challenges for both businesses and consumers. According to Ronak Sutaria, lead researcher at technology consulting firm Mindtree, the IoT presents compelling business benefits, especially for organizations prepared to make the most of the stream of real-time data that will come from networked physical systems. IoT technologies allow for real-time and accurate data sensing and wireless transmission of data to web applications and servers connected to the internet which leads to a more precise and accurate monitoring and control of physical systems. However, organizations considering IoT deployments will be challenged to devise ways to effectively use the massive amounts of information that will be gathered. As analysts mine these new unstructured “big data” sources the problem of too much data and not enough actionable insight will become even more daunting (Accenture, 2014). Acquiring the needed analytics skills to cope with the data deluge is another challenge businesses must consider. Research from Accenture shows that finding top analytics talent (who Avinash Kaushik might describe as “Analysis Ninjas”) to manage massive amounts of data will be difficult in the years ahead. "One of the key infrastructures that companies [considering] IoT solutions require is to have a culture of data-driven decision making," Sutaria says. He believes that fundamentally the IoT provides a stream of accurate data from the real world. Converting that data to information, then to knowledge, and finally to wisdom also requires traditional analytical skills of the domain where the IoT solution is being deployed. To build a competitive advantage using the IoT, companies must plan for the countless new offerings that become possible when potentially every physical object can be networked. In closing our interview, Di Chiro stated, “it is imperative that companies start now creating the organizations and web-based business models that can turn these ideas into reality.” The result King 3
  4. 4. The Internet of Things Trend - Section 3 will be richer and smarter customer experiences, where contextual content becomes an element of useful applications and where insights derived from data generated by millions of digital devices create added business and consumer value (Bock, 2014). Gartner is on record stating the Internet of Things is already driving the beginning of a new era, predicting the impact of connected smart devices will add $3.8 trillion to the global economy while disrupting every aspect of business (Fogarty, 2013). As a result, the IoT is poised to deliver significant business benefits to organizations forward-thinking enough to envision the opportunities and efficiencies the IoT can reap (Violino, 2013). King 4
  5. 5. The Internet of Things Trend - Section 3 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 : Ashton, K. (2009, June 22). That 'Internet of Things' Thing. Retrieved from RFID Journal: Bock, G. (2014, January 1). Gaining competitive advange in business through the Internet of Things. Retrieved from SearchContentManagement: Bram, T. (2014, February 15). What Nest's Acquisition tells us about the Future of the Internet of Things. Retrieved from Saga: Covert, E., & Orebaugh, A. (2014, January 29). Ethical challenges of the Internet of Things. Retrieved from SC Magazine: Duncan, G. (2014, January 24). You can't avoid the 'Internet of Things' Hype so you might as well understand it. Retrieved from Digital Trends: Ferber, S. (2013, May 7). How the Internet of Things Changes Everything. Retrieved from Harvard Business Review: King 5
  6. 6. The Internet of Things Trend - Section 3 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: Thunder Factory. (2014, February 25). Patrick U. Di Chiro Bio. Retrieved from Violino, B. (2013, July 29). The 'Internet of things' will mean really, really big data. Retrieved from InfoWorld: King 6
  7. 7. The Internet of Things Trend - Section 3 Patrick Di Chiro Bio Patrick Di Chiro founded THUNDER FACTORY in 2000 because of his fundamental belief that the marketing industry has for too long short-changed the client. Patrick envisioned a new kind of marketing firm, one comprised of highly experienced marketers and communicators who are passionate about helping clients succeed by building their businesses and growing their revenues. Thus was born THUNDER FACTORY, combining the strategic rigor of a world-class consulting firm, the creativity and branding expertise of an award-winning advertising/PR agency, the ROI focus of a top direct marketing firm and the technological know-how of a leading digital marketing company. A 30-year veteran of international marketing and communications, Patrick's experience ranges from consumer/brand marketing and technology, to financial services and healthcare. Prior to launching THUNDER FACTORY, Patrick served as Chief Communications Officer of E*TRADE Financial, Inc., the pioneering online brokerage and banking firm. Formerly, he was VP of Global Technology Marketing for Visa International, and Partner, Ketchum Worldwide. During his seven-year career at Ketchum, Patrick served as Managing Director of Ketchum's Asia-Pacific agency network, and was the firm's first Director of Global Account Development. King 7