The "Internet of Things" (IoT) has recently exploded as a hot new "thing," fueled in part by Google's and Cisco's increasing strategic investments, and an estimated $19 trillion dollar market opportunity (that's more than 20 times the projected global spend for all of media in 2018). Articles in publications such as The Wall Street Journal and the Harvard Business Review have begun to dispel the notion that IoT is just about connected refrigerators.
But why should anyone in digital media care? Last week at Ad Age's Data Conference, global brands from Loreál to Coca-Cola converged to discuss how IoT-based data (data flowing from and between connectable products, devices, people and brands) can help them build deeper relationships with consumers. While early adopters are now experimenting with creative ways to leverage IoT as a conduit for deeper audience engagement, IoT hasn't reached critical mass yet; IoT discussions still live inside the walls of "digital innovation" and "new product development."
At the crux of IoT discussions for digital media is a rather simple, yet entirely disruptive concept -- that individual physical products can become their own media platform for brands. In other words, a connectable product (anything from a bicycle to a soda can that consumers can engage with via their smartphones) can act as its own media channel -- operating alongside TV, mobile, magazines and other media channels -- and tapping into consumer behavior to create an entirely new form of CRM through physical objects. This concept -- products as interactive media -- has vast implications for the media landscape.
Connectable products will uncover new marketing data
As Ad Age recently reported, data is clearly becoming our generation's new oil, and marketers are looking to unlock more granular data as a key point of competitive differentiation. A decade ago, targeting ads by demographic and behavioral data represented a major breakthrough; now, all kinds of tech innovation -- beacons, mobile apps, attention-based measurement, etc. -- have spurred a new wave of marketing data and real-time, dynamic experiences. But still, these data are based on understanding the relationship and efficacy between a consumer and a brand's content; it doesn't necessarily gauge or qualify a consumer's relationship with a brand's products -- the ultimate truth-teller of a consumer-brand relationship.
$137.8B U.S. ad spend for top 200 advertisers
As products become connected, the game changes completely for brands, shifting marketers' strategy from the traditional push model to a more intelligent pull model. A connected product provides a brand with a direct, real-time interface and interaction point with the consumer. Instead of pushing content toward consumers at the best guesstimated time to catch their attention, brands can engage with consumers who are proactively opting in to receive content when they most need it and when they are most engaged with the brand's product.
Connectable products can become an integrated part of the media mix. The call-to-action in a TV ad could prompt viewers to digitally engage with a product at that moment for extra content and offers, creating a direct link between message, product and ongoing consumer relationship. Your exercise machine usage, say, could trigger a highly relevant offer for a related fitness product on a display ad. Connected products are effectively a media channel for fluid, continuous and omnichannel dialogue with consumers.
Data is the key to enriching the consumer's experience
None of this will work, of course, unless it enhances the consumer experience. The new treasure trove of data will help marketers innovate dynamic and personalized ways for consumers to engage with products in real time, extending the physical value proposition of the product with a dynamic, digital value proposition. Already, we've seen numerous global brands bring thousands of consumer stories to light. And this is just the beginning. Those who can translate the data into intelligent, actionable insights will be the ones who succeed.
Last week represented an exciting milestone for the Internet of Things in the digital media industry. Marketing executives are just beginning to open their eyes to the limitless marketing opportunities enabled by IoT. There is still a world of innovation before us, and if the industry can embrace the disruptive idea that products can serve as their own digital media channels, we're off to a great start.