Why IoT is the Future of Advertising

Why IoT is the Future of Advertising

A guest post by Patrick Kirby, VP of Accounts and Sales at GlassView.

Consumers have adapted to new technologies at light speed. Consider the iPhone. It has always been around for only a decade, but visit any public space and you’ll see people buried in their smartphones. Sure, mobile phones have been around in one form or another for decades, but until recently people used them mostly to make calls. So if you were beamed here from just a couple of decades ago, you might wonder what these little boxes are and why they’re taken such control of the population.

Glimpsing ahead to the 2020s, I envision a similarly puzzling tableau in which consumers are talking to their washers, dryers, refrigerators and other inanimate objects and those objects are talking back.

This is the Internet of Things (IoT), a much-hyped technology that brings Internet connectivity that makes formerly dumb devices smart. Recall though that when phones got smart, they also got advertising. That’s what’s going to happen to all of those other devices as well.

Here’s why IoT is the future of advertising:

  • 1. Smart devices get consumers’ attention. Consumers have become adept at tuning out ad messages. There was a time when the only ways to avoid a TV ad was to leave the room, shut the TV off or change the channel, but now a consumer can exist on an ad-free diet of Netflix, HBO and Pay-Per-View and employ ad blockers on desktop and mobile. There are times when you need to focus your attention though. If you’re trying to get something done like wash your clothes or make dinner, then you are a captive audience. The same goes for wearables. An ad on a smart watch is impossible to ignore.
  • 2. Device-focused advertising harnesses moments. When you’re doing wash, that is a rare moment during the week when you’re thinking about the subject of laundry. If you sell detergent then, this is a prime time to reach the consumer. Think about it: Before IoT, the best a detergent maker could hope for was that the consumer would remember the messaging when she was at the store. Or maybe she’d clip a coupon. By contrast, when a consumer is running out of her current supply or is noticing how her current detergent isn’t getting chocolate syrup stains out of her son’s dress shirt, that moment is a prime time for your message.
  • 3. Messages of this type interact rather than distract. Advertising in the 20th century was premised on the distraction model. Whether the consumer was watching a TV program or reading an article, the idea was to seize the moment when the consumer was thinking of something else and then hit them with a marketing message. In a best-case scenario though, an IoT ad could be helpful. Picture, for instance, an ad reminding a husband that today is his anniversary and then offering a link to make a reservation at a favorite local restaurant. Or a dashboard ad that reminds the driver that it’s time for an oil change and offers a $ 5 coupon.

advertising on fridgeSuch is the promise of IoT advertising. But in 2017, very few companies are taking advantage of this opportunity. In part, that’s because there’s some education lacking in the market. A lot of people in media don’t know what IoT stands for and don’t realize that it will soon be a $ 267 billion business.

Not everyone is missing the opportunity. Amazon saw the potential for IoT advertising in 2015 when it released Dash, Internet-connected push-button devices for the home that let consumers reorder Pampers, Tide and Charmin. Amazon has since gotten its Echo devices in an estimated 11 million households. Amazon is clearly planning its future around IoT. It’s time that advertisers did the same.

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Moving Sales With Trajectory-Based Mobile Advertising

What a difference a decade can make. In June 2007, Apple released the iPhone; now, mobile internet usage outstrips desktop usage. In the United States, consumers spend more time on mobile apps than watching television, and m-commerce is rapidly approaching $ 100 billion annually.

Given the fast rise of mobile, it’s no surprise that marketers are well aware of it as a sales channel. But mobile isn’t just a new channel for reaching consumers with the same old offers. It provides marketers with valuable new sources of information about consumers, and it enables them to deliver new kinds of offers.

Anindya Ghose, Heinz Riehl Chair Professor of Business at New York University’s Stern School of Business, is one of the pioneering explorers of the intersection of mobile and marketing. In his new book, Tap, he collects his findings and weaves them together into a set of nine forces that marketers can wield to drive sales via mobile technologies.

One of the forces that Ghose explores is trajectory. “In the online world, it took us only a few years to get accustomed to, and often even embrace, the idea that firms — including e-commerce firms, search engines, and website publishers — can track our browsing behavior and predict our next steps,” he explains. “A similar revolution is about to hit us off-line. The springboard for this revolutionary leap is the individual’s trajectory. An individual’s trajectory is the physical and behavioral trace of his or her off-line movements.”

Mobile devices allow marketers to track a consumer’s walking pattern and predict where he or she will go next. Moreover, they can create and deliver offers based on that trajectory. In the following excerpt, Ghose describes what he and his colleagues learned when they used trajectory-based advertising in one of Asia’s largest shopping malls.


MIT Sloan Management Review

Connected cars may give automakers the key to advertising dollars

connected-car

The automotive industry is undergoing its biggest transformation since the 1908 Model T, the car that opened up travel to the middle-classes of America. But unlike in 1908, it isn’t about the price or production of a car, but how connectivity and automation will change the business model for manufacturers and the experience for consumers.

Autonomous vehicles are still at least a decade away from public launch, says Ford’s head of research Ken Washington, but the connected car should be reaching nearly 380 million consumers in less than five years.

There has been a significant rise in the sales of connected cars from 2015 to 2017 from eight million to 30 million, according to a Business Insider report. It estimates nearly 100 million connected cars will be sold by 2021.

The proliferation of this technology presents new opportunities for automakers, which have been relegated to selling the car and not much else. The connected car provides manufacturers with a way to sell software updates, infotainment services, and use the data collected for advertisements, similar to Google or Facebook’s business model.

Delphi, one of the largest automotive suppliers in the world, has already caught onto this trend. In 2015, it acquired a data analytics startup called Control-Tec for an undisclosed amount and Movimento in early 2017, a startup that works on providing over-the-air updates to cars.

Both acquisitions are clear signs that Delphi wants a piece of the connected car future, even if it is just supplying automakers with the capabilities to utilize this technology.

New revenue models

The hope, for automakers, is the connected car provides two revenue models, similar to Apple’s iPhones. The car is sold to the customer and then data is taken from what the driver listens to, where they live, where they work, how long they commute, which is then sold either as an advertising profile or to ad-networks.

It may be hard for the automaker to sell both however, as is the case with Apple’s decision to bundle software and update products for free. Consumers may also push back against having more of their personal information sold to the highest bidder.

In the U.S., consumer advocacy groups have called on automakers to ensure that private data will not be sold to advertising agencies. The European Union is also looking at legislation that would prevent the car becoming another product for advertising, as the computer and smartphone have become.

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