Internet of Things Data Could Fuel Ad Targeting

Next Home for Connected Product Data Is the Marketing Database

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The Internet of Things has promised to turn our everyday interactions with stuff into data for logistical and marketing applications.

But now that more and more corporations, including Diageo and Mondelez, have tested actual web-connected products in the market, the industry is approaching the next stage of connected appliances and food packaging. That means figuring out where all that information will go and how it will be used. IoT platform company Evrythng sees a home for data generated by connected thermostats, bottles of booze, designer handbags and washing machines in first-party marketing databases.

The firm is partnering with Trueffect, a digital ad firm specializing in first-party data targeting, to work towards devising ways marketers can use data gathered when consumers use their products. The firms hope to directly communicate with those consumers and, yes, perhaps target ad messages to them. Evrythng and Trueffect exchange product interaction and consumer data through an API integration between their two platforms.

"We're connecting our systems together and going to market together to do this," said Andy Hobsbawm, founder and CMO of Evrythng. The company works with liquor maker Diageo and CPG manufacturer Mondelez to embed digital tracking technology into their products, but he would not reveal whether either of the two firms are employing the Trueffect system.

Evrythng assigns a unique ID to the products it enhances, which can be connected through embedded technology -- say, in the case of a home appliance -- or through a digital tag such as a QR code which connects to a mobile app.

"As soon as the consumer connects the device to the readable element in the packaging, that creates a signal," said Martin Smith, senior VP of solutions and development at Trueffect.

Diageo used the Evrythng platform to turn bottles of Johnnie Walker scotch into personalized gifts, allowing purchasers to customize a video for recipients. By suggesting purchasers and end users of the product opt-in to receive personalized options from Diageo, the effort helped the spirits purveyor do what most product manufacturers struggle to: find out who is buying -- and in this case, drinking -- their products.

Diageo declined to speak with Ad Age about IoT or the possibility of using data from its goods for marketing purposes. However, the company sent this comment about its work with Evrythng and how it enhances its first-party data: "With Evrythng's technology, we are creating Diageo's first one-to-one marketing platform at point of sale, which means we can engage and respond continuously to our highly-connected consumers by bridging the virtual and real worlds."

The spirits brand introduced its "Smart Bottles" of Johnnie Walker Blue Label, which feature electronic sensors, at the Mobile World Congress in March in Barcelona. In addition to helping the firm track whether bottles have been opened and where they are in the supply chain, they could be used for targeted marketing. "For instance, Diageo could upload promotional offers while the bottle is in the shop but change that information to cocktail recipes when the sensors show the bottle has been opened at home," noted the company in a press statement.

Knowing who bought their wares and how the products are used or consumed allows companies to add new data points to CRM databases, inform future product development, generate points for a loyalty program and conduct marketing efforts with messages specific to that use.

"It allows you to message people at exactly the right time in their purchase cycles," said Mr. Hobsbawm. "I actually know whether or not you engaged with a product in the last two weeks."

Trueffect helps clean the data, ensuring it is uniform and useable for multiple purposes, including sending mobile messages with product information.

According to Mr. Hobsbawn, the product manufacturer owns the data generated through the IoT platform. Products only gather personally-identifiable data if consumers opt-in or already have a relationship with the manufacturer or advertiser, according to Evrythng.

"While registration is not required, to leverage the value of this joint solution, brands would significantly gain from asking consumers to register in exchange for more personalized experiences," said Mr. Hobsbawm.

In terms of consumer privacy, the industry is still determining best practices and there are no government rules in place regulating IoT, though the Federal Trade Commission has been evaluating the issue.

According to Mr. Smith, consumers naturally will expect "a different set of permission processes for a connected electronic product than for a packet of biscuits."

In addition to providing valuable information to companies, product connections serve consumers by validating that the item is indeed the real thing as opposed to a knockoff, for instance, in the case of a phony handbag or cosmetics.

"The cost of being on the packaging is now getting to a point where it's scalable," said Mr. Smith, who expects lower-priced products to follow early IoT tests with pricier items. "We'll see an adoption curve as people start to understand how these work."