In this guest post Robin Schmitt (pictured below), Neustar’s general manager for Australia explains how marketers can reap the benefits of the IoT revolution.
The rise of social media and increasing consumer demands means marketers must strive to provide a more personalised and engaging experience by tapping into the customer data available with the rise of smart technologies. Woolworths Australia fully understood this concept when it decided back in 2012 to leverage loyalty data to provide more relevant offers to shoppers by analysing their shopping history. With a powerful data set generated from its loyalty program, the supermarket chain was able to provide shoppers with specific deals based on their buying habits, as well as re-design store layouts based on what shoppers buy in particular geographic locations. The benefits were quick to come, as Woolworths grew its food and liquor sales by 4.7 percent to $20.48 billion in December 2012, compared to the same period a year before.
As another example, outdoor advertising giant, JCDecaux launched a media planning tool, ORBIT, in Australia in 2015, which allows the company to bring together data including consumer category behaviour, lifestyle and media habits, household expenditure and demographic profiling at the local-area level. This in turn allows the company to create targeted and localised campaigns based on the market segment it is trying to reach and where to best find them.
By capturing real-time analytics and creating actionable insights, marketers have been able to achieve astoundingly disruptive engagements. With the emergence of a full-scale Internet of Things (IoT), these capabilities will grow exponentially. What kind of opportunities does that open up for analytics-driven marketers? And what should they do to reap the benefits of the IoT revolution? Here are four points that explore these questions:
- Disruptive data collection
With the ability to connect a data stream to traditionally ‘unconnected’ objects comes the promise of gathering more types of information. On the most basic level, IoT means more touch points through which to acquire data. In Australia, for instance, the average Australian household in 2017 has 13.7 internet connected devices, with this number set to balloon to 30.7 by 2021. In total, Australian households are expected to have 311 million connected devices by 2021 – providing vast opportunities to collect and leverage consumer data.
We tend to think of these additional points as simply more objects that can track consumers in the same old ways: mobile phones could gather motion and position information; now, chip-enabled sneakers and smart shirts can too. But the new opportunities of data collection aren’t just about more data points. As smart products proliferate and record data about everything consumers do in their physical lives, they’re learning more about their preferences and behaviour.
- Real-time personalisation
One clear benefit of knowing consumers so well is the level of personalisation that’s possible.
In the age of IoT, personalisation will play a crucial role. Buying decisions will depend not only on the object itself, but the digital service it offers. Whether it’s a fridge, television or a car, consumers will expect the highest level of personalisation and convenience. For example, a car might be evaluated on how responsive and relevant its apps are. Would it notify the consumer on upcoming servicing, petrol level? Or perhaps even use location and individual-level insights to direct passenger to relevant stores en route?
- Environment-based attribution
IoT promises to provide insights into the broader environment in which ads are delivered – not just about broad conditions and trends, but also about the specific place and customer an offering is served to. Environmental factors like competition actions, pricing changes, breaking news and the weather will help to evaluate marketing’s effectiveness more accurately.
As a result, IoT will provide answers to many questions that, until now, have been highly critical yet elusive. Is a billboard more effective in fast or slow traffic? Are consumers more responsive to sports advertising before or after a workout? Do coffee ads perform better with coffee drinkers who are tired, or who’ve had a good’s night’s rest? Marrying attribution analytics to information from location-based traffic updates, fitness or sleep trackers are providing answers in a state-of-the-art way.
- Toward a complete conversion path
Currently, marketers use two methods to follow a customer’s purchase paths. Digital channels provide a detailed, yet still partial, window into consumer behaviour, while offline channels provide no direct insight into how consumers interact with a brand. As a result, marketers often misestimate the impact of their marketing efforts.
As we continue to shift to digital engagement via mobile devices, IoT and desktops, consumers’ digital footprints will continue to expand. Marketers will be able to see how customers react to all marketing engagements thanks to previously unconnected touch points joining the grid or proxy information gathered by smart devices. For instance, even if a billboard investment or a sponsorship activity can’t inform marketers how many pedestrians stopped to look at an ad, mobile location data can.
In today’s interconnected world, marketers can follow the complete conversion path across every touch point and optimise their marketing efforts based on an entirely new view into how marketing influences sales.
We’re still in the infancy of IoT-enabled marketing. Part of the reason is that we’ve only just begun to see the kinds of objects that can become web-integrated and the information they can process and report back. Another challenge lies in the fact that IoT is still at the point solution phase, making it difficult for real-world objects to slip easily into unified marketing campaigns.
The point solution problem is twofold. First, there is a lack of universal APIs, and therefore, systems that could integrate, don’t. The second issue at play is one of standards. Different applications record the same data by different parameters – for example, using different field names to describe who a customer is. It’s hard to create coordinated experiences if sharing data across different objects requires a separate opt-in form at every point along the way.
Marketers themselves can’t solve these challenges – they need to wait for technology to catch up with the vision. However, they can help in steering today’s IoT along the right path. For one, they can push for data and privacy standardisation across every connected device within their company and push their partners for more IoT-friendly open APIs. While it’s a heavy task, as it calls for CMOs to become data and analytics champions in the organisation, it’s worth the effort. After all, marketers want to create campaigns that will bring more customers directly to their stores.