By now, virtually all of you have heard about the Internet of Things and how it is changing our lives for the better. Have you, however, thought seriously about what it might do to marketing and advertising over the next five to ten years?
What is the Internet of Things (IOT)? Simply put, IOT is the network of a wide variety of physical objects that are embedded with software, sensors, electronics and, very importantly, network connectivity. These devices, some 50 billion of them soon, are able to collect and SHARE data. You use many of these items but are probably not aware of them.
I first heard the term used directly around 2008 at a conference where someone was telling us over a drink how a friend’s daughter called her dad in France who, with a few codes on his phone, opened the door of his Connecticut home and shut off the burglar alarm before she entered. Kevin Ashton, then of Procter & Gamble is widely attributed to coining the term in a 1999 speech. A few years ago my generous children bought Dad a Fitbit for his birthday. It tracks my every step, reports to my personal devices and every week gives me a summary of how much I have moved each day. It is now rare for me to do less than 10,000 steps a day (doctor’s suggestion) and prods me to get out of bed and take a 45 minute stroll prior to my morning coffee.
The applications are amazing and deep. Most of the play goes to locking your home or opening your car from afar or turning off an iron that you might have left on before leaving the house. Construction leaders see it as a huge leap forward. They use new terms such as “smart cement” which means that bridges, levees, and roads will have sensors in them that monitor cracks or stresses and send such warnings early so that action can be taken. Builders who do not build to spec had better be wary.
When I asked a few people about how this will affect us in the marketing/advertising arena, they dismissed it as not a factor. I am not so sure. A few of you have to have heard of the “smart fridge” in new “smart homes” that are being developed. It will alert you when you are running low on milk, butter, beer, yogurt, eggs, and other essentials. You could merely hit the re-order button and the next time your home delivery of groceries arrives, such items will be in your shopping bag. True, not everyone will have a smart fridge in 5-10 years but many upscale types will.
This has to help established brands and block out newcomers to a certain degree. Also, brands will not have to spend as much as on broad based advertising as they will able to do pin-point targeting on steroids using some application of the IOT.
Marketing automation vendor and leader Marketo describes IOT's impact as follows: "the connectivity of our digital devices that provides endless opportunities for brands to listen to and respond to the needs of their customers...with the right message at the right time on the right device."
Conventional media has to take something of a hit from this. One could cut their network TV budget by 30% but still hit key prospects and users dropping millions to the bottom line. Financial analysts claim that the IOT represents a business opportunity in excess of $20 trillion over the next five years. Many companies and brands will be lifted by this remarkable technology but I cannot see legacy media being one of them.
If you would like to contact Don Cole directly, you may reach him at firstname.lastname@example.org