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May 14, 2014

What Is The Internet Of Things?

Pew defines the Internet of Things as “a catchall phrase for the array of devices, appliances, vehicles, wearable material, and sensor-laden parts of the environment that connect to each other and feed data back and forth”.

Why is this said to be the future of digital marketing, and what does it mean for advertisers?

A recent Pew Internet survey (Digital Life in 2025) predicted that the Internet of Things will impact our lives in many ways, including:

  • Bodies: Many people will wear devices that let them connect to the Internet and will give them feedback on their activities, health and fitness. They will also monitor others (their children or employees, for instance) who are also wearing sensors, or moving in and out of places that have sensors.
  • Homes: People will be able to control nearly everything remotely, from how their residences are heated and cooled to how often their gardens are watered. Homes will also have sensors that warn about everything from prowlers to broken water pipes.
  • Communities: Embedded devices and smartphone apps will enable more efficient transportation and give readouts on pollution levels. “Smart systems” might deliver electricity and water more efficiently and warn about infrastructure problems.
  • Goods and services: Factories and supply chains will have sensors and readers that more precisely track materials to speed up and smooth out the manufacture and distribution of goods.
  • Environment: There will be real-time readings from fields, forests, oceans, and cities about pollution levels, soil moisture, and resource extraction that allow for closer monitoring of problems.

As our lives are transformed by the increase of technology in our daily activities, so may marketing be transformed by the huge amount of data collected by this technology.

Patrick Stack, manager for the digital transformation group of Accenture Interactive, predicted,
“Nearly everything in daily life will have a connected application associated with it. We can think
of each person as a plug and each part of life as a socket—when you move from your bedroom to
your kitchen to your car to your workplace and back again, each step along the way will be able to
recognize your common identifier and tailor your experience accordingly. Marketing applications
will be more restricted and subtle due to strong consumer resistance to in-your-face advertising,
but experiences associated with already-purchased products will be ever-present.”

But how exactly will this connected technology impact advertising? Your internet-connected thermostat could anonymously identify you as someone who frequently uses the furnace, or as someone whose air conditioning kicks on every day at 6pm. Drawing some assumptions from these identifiers, the user whose heat is always running could be served ads for throw blankets from a retail store. The use whose home air conditioning kicks on every day at 6pm could be served ads for a television show which is on shortly thereafter.

On one level, this marketing technology is already in effect today. Jeff Jarvis, director of the Tow-Knight Center for Entrepreneurial Journalism at the City, writes in Pew’s study:

Because I use Google’s maps and its newly acquired traffic app, Waze, to navigate every day, Google has intuited (accurately) where I live and where I work, allowing it to serve more relevant content and advertising and commerce with less noise and waste. My own local newspaper doesn’t know any of that. So, my newspaper continues to give me the same 300 pieces of content it gives everyone else, treating me still as a mass. Google treats me as an individual because it knows me as an individual.

This very personal advertising targeting which may be provided by the Internet of Things could clearly offer new opportunities for digital media buys. As targeting becomes more granular and precise, advertisers will be able to more effectively reach their exact targets.