Cable, Wireless Players Try to Snare Piece of $4.2B Connected-Home Business
The U.S. home-automation market is expected to jump to $6.8 billion by 2018 from $4.2 billion last year, according to ABI Research. During that time, ABI estimates the number of systems installed will leap to 11.9 million from 1.6 million.
"The intensity of the category has stepped up in the last six to 12 months," said Tony Wells, chief marketing officer at home-security giant ADT.
As one of the segment's most-established players, ADT is taking on fresh competition from players like AT&T and Comcast. "Broadband was a growth engine [for cable and telecom companies] for a long time, but that has now plateaued," said Tom Kerber, director of research, home-controls for Parks & Associates. They're "looking for the next big thing to drive growth."
Only 2% to 3% of U.S. households have at least some smart-home control, he said, but that figure is higher among the 25% of broadband households that already have a home-security system. Parks estimates that 18% of those homes will have at least one smart-home component by the end of the year.
AT&T's Digital Life, which allows consumers to use a smartphone to remotely adjust the temperature, turn off lights, lock doors and peek in via a camera, started 2013 with just 15 markets but will end the year with more than 59. The company spent more than $18.7 million in measured media on the brand through September of this year, according to Kantar Media. BBDO, New York, is the agency.
Xfinity Home went national in July 2012, backed by TV spots from Digitas that include one with a family checking in on their dog while away. Home initially served as a value-add for Xfinity customers, according to Bill Horrocks, VP-product management and new business for Comcast Cable, but national ads have broadened its appeal. Today, more than 53% of the customers who sign up for Home also sign up for two to three additional services such as voice, high-speed internet and cable TV.
Xfinity has spent $14 million this year, compared with $4.3 million in 2011, according to Kantar Media.
Pulse, introduced by ADT in 2010, offers burglary, fire alarm, medical-emergency notification, pet sensors and more. ADT claims a 25% market share in the home-security space.
Pulse's ad spending is not broken out separately, but the company has spent $37 million this year in measured media, compared with $56.8 million last year. Its agencies include Arnold, MediaCom and SapientNitro.