By 2020, smart gadget manufactures and suppliers will annually generate $ 300 billion in revenue. For those of you that don't know, that is a lot. With 26 billion connected devices worldwide, the Internet of Things will be the perfect marketing channel for a number of burgeoning and established industries, including retail, tourism and transportation.
About 3 trillion consumer products are manufactured and sold every year. Surprisingly, cars, electronic gadgets and other potential nominees for IoT connection comprise only 0.2% of the total amount. But why is everyone so excited? Because the benefits are seemingly endless.
Wider Data Accquisition
A curious article by Matt Goddard explains how user data generated by a smart fridge can be utilized by marketers. Yes, data from refrigerators.
If that's the case, you can replace the fridge with any other connected device (bulb, fitness tracker or Amazon Dash shopping assistant) – it doesn’t matter. What does matter though is the particular data collected by the gadget. In 2015, 43% of entrepreneurs who used IoT-generated information managed to improve their services and increase customer engagement;
Insight Into Customer Buying Habits
You are likely wondering how a smart refrigerator can be used by marketers, aren't you? These devices, like many smart devices connect through IoT, can track a wide range of metrics, from what foods you need to how clean your home.
By partnering with grocery stores and other consumer networks, they'll be able to make the marketing process that much easier.
Forget the irritating ads you skip through while playing to your favorite mobile game. When delivered properly, advertising comes as a reward. IoT gadgets provide 100% relevant dynamic data on customers’ buying habits, which basically reads “the highest targeting ever”. Notable IT experts including Bryan Jones (Dell) believe 2016 is the perfect time for marketers to reinvent digital advertising;
Increased Product Value
Forget about surveys, social media and reviews; now you’ve got a much more powerful marketing feedback channel to draw ideas from.
Here’s an example. SilverHook, a company that manufactures smart racing boats, discovered that pilots couldn’t cope with all the data generated by the vessels. The enterprise addressed IBM to develop a comprehensive system which only allows access to the data a pilot needs to control his boat in the moment. The company also shares the data with event officials to increase race security and customer engagement.
Security and Interoperability
There are no universally approved IoT data encryption and security standards yet. Subsequently, many odds stories have hackers breaching smart fridges and baby monitors have popped up.
Most smart devices are developed by startups and non-tech brands like Absolut and L’Oreal. They are not designed to interact with each other, which contradicts the idea of global connected environment.
Gartner expects the situation to get even worse. By 2019, enterprises in the IoT sector will reach 40%. Who’s going to protect business data & how?
Data Storage and Management
If a company wants to use IoT-generated information for business purposes, it should be prepared to analyze huge amounts of data in real time. The task cannot be performed manually and, therefore, requires customized applications. Enterprises will have to extend storage capacities and develop reliable solutions to use the data in a cost-effective way.
Consumer Privacy vs. Advertising
Obviously, users who purchase smart watches and fitness trackers treasure their privacy. They will not be happy to know brands use sensor data to market associated goods and services.
Also, the Internet of Things advertising and marketing channels must be well-protected against malicious programs and hackers. A recent study conducted by the Association of National Advertisers revealed that fake ad traffic cost publishers over $ 6 billion in 2015. Imagine what the figures will be like in the near IoT-dominated future.