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The Internet of Blings and Pings

By Martin Kihn | July 02, 2015 | 0 Comments

And just when you thought Big Data couldn’t get any bigger — it can’t. Along comes the Internet of Things (IoT) to make it look like a falling Bieber.

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The IoT started lifting back in early 2014 when Google acquired smart appliance player Nest for over $3 billion … did some reps when Microsoft announced an IoT service on the Azure cloud last March … and got really shredded when Fitbit’s IPO pumped up last month. (That last one assumes you count people as “things,” and why not?)

The Internet of Things is certainly a thing. But will it mean more to marketers than just a lot of pings and blings — more data furiously zinging around in search of a problem? Other than organized pestering (pings) and places to “TAP HERE TO $$AVE!” (blings) … what’s in it for marketers?

And for the record, Gartner predicts that the IoT (broadly defined) will add $1.9 trillion to the global economy and “disrupt every aspect of business.” We do not dispute this forecast. The IoT will doubtless make supply chains and repair shops and (let’s hope) highways and crime labs more efficient. It encourages us to run and saves lives with early alerts. It makes our houses safer … and so on.

Our question here is more modest: What’s in it for the mortal marketer in the somewhat foreseeable future?

Well, the meme-sphere is already hyping the IoT with the worrisome proviso that this isn’t hype, which usually means that it is. An Economist Intelligence Unit survey reported that more than half of marketers “expect the IoT … to revolutionise marketing by 2020.” Precious few exhibits are on view.

A manager at Salesforce sounded a nautical trumpet in Forbes: the IoT is “a gigantic wave of new possibility poised to alter the face of technology.” How? Well, devices can (and do) tweet and social communities can be created around products. And “the age of the interruptive commercial will finally come to an end.” How? People will get “relevant” advertising. Like what? Say your light bulb blows out: you will get a coupon on your smart phone right away. (Never mind that you already know that your light bulb is out, since you’re groping for your phone in the dark.) This strikes me as a narrow view of advertising.

Reliably vivid, Wired.com weighed in with a piece that warned “The Internet of Things Is Far Bigger Than Anyone Realizes.” Example? The 2007 bridge collapse in Northeast Minneapolis, which might have been prevented with “smart cement.” Of course, we’re not limited to bridges and cement here — we’re taking about a revolution: “When we start making things intelligent, it’s going to be a major engine for creating new products and new services.” Like what? Well, here we are left to ponder.

Our friend Scott Brinker over at ChiefMarTec.com, a very savvy fellow, captured the prevailing best-believe-this tenor in a recent long interview with Andy Hobsbawm, CMO of IoT darling startup EVRYTHNG.

Calling the IoT “closer than you think,” Brinker warns:

“You’ve been hearing the drumbeat of the Internet of Things for long enough without seeing it materialize that you’re inclined to write off all articles like this as hype. My humble advice: don’t be so quick to dismiss this.”

Ramping off the smart cement for a moment, let’s get back to our little piece of the parking lot. What can the IoT do for marketers?

While our “recommended reading” this week for Gartner for Marketing Leaders clients pulls forward some interesting discussion, it becomes clear after a while that most of us are using the same not-very-explosive examples. There are themes in the memes, like:

  • Sensors in appliances — you run out of milk, your refrigerator orders more of your favorite brand to be delivered by … well, I guess we’ll need milk trucks or something
  • “ORDER NOW!” buttons on appliances — you run low on detergent and you press a button and a box of Tide gets delivered by … well, somebody who can somehow deliver it without raising the price, since you’d probably just add it to your shopping list otherwise
  • Smarter thermostats, smoke detectors and cars — nice, but not obviously addressable
  • New software companies — sweet, for (some of) their investors

(By the way, the out-of-milk example is so ubiquitous in the IoT-hype sphere, it’s encouraged a counter-meme: see “Why the Internet of Things Is More Than Just a Smart Fridge.”)

There are better examples. EVRYTHNG’s Hobsbawn — who estimates that close to a trillion products made each year will be “digitally-capable” by 2020 (there’s that dateline: 2020 again) — pointed to the spirits company Diageo. As announced at the Mobile World Congress in Barcelona last March, Diageo is experimenting with Johnnie Walker Blue Label “Smart Bottles,” which contain tags that enable people who so desire to interact with them using their phone. How? They might provide a video message to a gift recipient, or Diageo might provide loyalty points for interactions. These are fun, but sound like novelties.

Another example is a bottle that indicates its state (open or closed) using smart film. The aforementioned app-wielding customer could see a coupon in the store and a cocktail recipe after it’s opened. Given the difficulty brands are already having getting consumers to use their apps, it seems to me more than a recipe will be needed for action.

In fact, as we scan the meme-sphere, we find that most of the real-world examples come from EVRYTHNG itself, which is a master of sharing its vision. Over at AdAge, the company’s alliance with first-party ad server TruEffect was highlighted as an example of the intriguing prospect of the IoT getting into programmatic advertising.

How? Details were not provided, but mention was made of QR codes, mobile apps, APIs and sharing data with ad networks. QR codes aside, we may be on to something here: if a data vendor, say, could supply information to an ad exchange that linked individuals to specific products (in specific states) at specific times and places, well, that’s a lot of information that is not currently available, to target both first-party (CRM) and third-party (advertising) messages.

For example, if a bike company were to know for a fact I am lingering near a bike trail right now, am an avid cyclist with last year’s model, and one of their top-of-lines just cruised by me, they would bid pretty high for the opportunity to advertise that same model in whatever social app I was doodling at the moment. I am a solid prospect for an envy-driven upgrade. We saw how the simple use of retargeting pixels increased the impact of display ads, so smarter targeting using product-provided data could do even better. It’s a long bike trail from here to a marketing revolution, but it smells almost real.

Why the dearth of concrete examples – and why are they so difficult for marketers to conjure up, even now? Is the best we can do a cocktail recipe on a brand app? Is that really a step change from what we already can do: a cocktail recipe on a brand app that doesn’t know you opened your bottle?

The answer lurks in the technology itself and in the needs of marketers. In the past, the difficulty lay in the cost of sensors. Companies have long wanted to instrument all their packages, for example, to streamline supply chains, but the cost per sensor and receiver was too high to make a business case. Costs will presumably continue to drop to the point where even low-cost products like bags of potato chips could have a working transmitter. The question then becomes: what will receive the signal? The answer is generally: the consumer’s phone. But the conundrum becomes how to get consumers to opt in and direct their phone at a product that might not matter all that much in the grand sweep of their lives. Mobile marketers face this problem already, as I’ve said, and we know there is no obvious solution.

Other than richer targeting data, which is evolutionary (not revolutionary), how can marketers get consumers to want to connect with their products unless they’re broken? Brands famously overestimate consumers’ psychic investment in their story. Other than handing out coupons (which is expensive) and monitoring product health (which is customer service, not marketing), how can an object that talks become more than just more noise to ignore?

If you have good ideas, please let us know. Our receivers are on.

 

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