In this exclusive piece for B&T, US productivity consultant Lisa Froelings (pictured below) identifies how the Internet of Things (IoT) will drastically change the way marketers approach consumers.
The Internet of Things has a been a buzzy term in the past five years, but so far it hasn’t revolutionised consumers’ lives in the way many thought it would. However, in the next few years, that stands to change as IoT technology expands rapidly and enters more homes than ever before. For context, research firm Gartner estimates there are currently 6.4 billion IoT devices in use this year, but by 2020 that number is expected to grow to 21 billion.
The rapid onset of IoT growth means several things for consumers. Not only will IoT users live in smart homes or even commute through smart cities, but their very relationship with businesses will change. The dominant form of this change will be a rise in convenience. After all, the IoT focuses on providing smart technology to users that can anticipate their needs before the consumer has to acknowledge and act on that need.
In part, this change will also be caused by shifts within business itself. IoT won’t just impact consumers’ lives – it will force companies to adapt to new business models – ones defined by big data collected by IoT. With the onset of all this data, companies will increasingly need to hire elite software engineers to process the data or even build the IoT devices themselves, but this isn’t the only change businesses will go through. This focus on engineering and data processing will apply to all levels of a business, and marketing is one of the areas that stands to be most impacted by this change.
There’s no doubt that the current model of marketing is flawed. Banner ads are ineffective. People mute commercials or walk away from the TV while their show isn’t on. Companies throw five to 10 per cent of their gross revenue at marketing efforts that fail, and they continue to do this year after year. However, IoT stands to change how marketers approach reaching consumers in three big ways that could greatly increase the success rate of individual marketing campaigns. Here’s how:
- IoT creates big data
Every device that is connected to the IoT provides information on user behaviour: when do they use a device, how frequently, in what capacity? Marketers will no longer have to guess or infer the answers to these questions – soon they will definitively know. Not only will marketers understand what demographic uses a certain product, they will know how they use it. This means that marketers can craft campaigns that target those use patterns. Is a company’s product handy in an emergency or popular in the morning? Perhaps it is used alongside another product or follows a specific event. Once marketers establish use patterns for their product, they can advertise those uses to potential customers and better convert them by showcasing a product’s utility for the situations that their product is actually used in.
- IoT monitors itself
One of the biggest benefits of IoT is that these smart devices are all connected. This leads to opportunities to augment the user experience by providing things as needed. Think about it this way: if you have a smart home, a lightbulb company could send you an advertisement for new light bulbs when one of your light bulbs burns out. This type of advertising would be annoying if you didn’t need new light bulbs, but in those circumstances, that ad is exactly what the consumer needs. This type of targeted advertisement is perfect for products that aim for longevity and need repairs or replaceable parts to function. Even better, IoT marketing may even be able to let consumers know when a battery runs out or when a product will break down before it even happens, giving customers time to replace a product seamlessly without any downtime.
- IoT devices can talk to each other
Most interestingly, IoT devices present an opportunity to market products across companies. Now, this will require companies to work together, but picture this: the smart lock on your door notes that you return home after dark and leave early in the morning. The smart lock company could then send you an ad about motion-triggered outdoor lights for your driveway that are made by a different company. If you chose to buy them, then perhaps the smart lock company collects a finder’s fee. The same scenario is possible for a smart fridge: picture a fridge that will tell you when you need to replace the milk or buy new eggs. This type of cross-functional advertising could target specific consumer needs in ways that were impossible before.
IoT’s greatest benefit to marketers is the wealth of information on user behaviour these connected devices will provide. In the midst of this big data on how consumers interact with products, marketers will increasingly be able to send ads with the right message at the right time to the right customer. With the advent of IoT’s explosive growth, the days of ads that don’t immediately appeal to consumer need may be over.