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The Internet of Things: Reshaping Advertising As We Know It

February 03, 2015

In this article on M&M Global, Sarah Lawson Johnston, Managing Director, Europe, discusses the "buzz-phrase" of CES - The Internet of Things. How will society's interconnected devices influence the advertising industry? Read this article and find out.

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by Sarah Lawson Johnston 

The Internet of Things (IoT) – where everyday physical products are connected to the internet and are capable of sending and receiving data – is set to transform consumer habits. With 10 billion mobile-connected devices predicted to be available by 2018, brands are considering what the IoT will mean for their advertising efforts.

From connected cars to wearable technology, the IoT is rapidly expanding to include many ordinary products in our lives. Able to communicate directly with each other, as well as the consumer, ‘smart products’ open valuable channels for brands to advertise to consumers on a personal scale, regardless of their location.

To give an example, a smart refrigerator is able to sense the products stored inside it and notify the consumer when a product needs to be replenished. Using the data available, this gives brands the opportunity to target the consumer with their product, at exactly the right time.

The most obvious impact the IoT will have on the advertising industry is a significant increase in the volume and variety of consumer data available.

IoT technologies allow extremely granular data to be gathered in real-time, allowing brands to build up an in-depth picture of the customer and their behaviour. This increased availability of accurate consumer data will provide an opportunity for both brands and agencies to deliver precise, personalised, and targeted advertising, and perhaps an even deeper understanding of how to best reach consumers.

Furthermore, the IoT is likely to enable a long-term relationship with the consumer. The physical supply chain of a product usually stops when goods are purchased. However, the IoT will allow products to communicate back to their manufacturer or supplier after purchase. This will give brands the opportunity to monitor the way their products are being used throughout the supply chain and the product’s life cycle, enabling them to react accordingly with up-to-the-minute offers and services when appropriate.

As with the adoption of any new technology, the industry will face some challenges when learning how to make the best use of the IoT. Here are some of the areas that will require further consideration.

Managing and Analysing Big Data

Data is only valuable when it can be used to provide actionable insights, and the biggest challenge facing advertisers and agencies is likely to be dealing with the multitude of data that connected devices will deliver. Herein lays an opportunity for agencies, with the right systems and expertise in place to help capture and provide detailed real-time analysis that will present actionable insights back to their brands.

Maintaining Relevancy

Connected devices allow highly personalised access to consumers, but advertisers and agencies will need to ensure interactions are relevant and targeted to avoid being seen as intrusive or invasive. Using data correctly will open up a world of possibilities for advertisers who can ensure their consumers are only provided with valuable and relevant information.

Ensuring Cross-Platform Uniformity

With programmatic digital advertising now the norm, advertising on connected devices is also likely to be automated. However, marketers and agencies may face challenges serving ads across a multitude of platforms in the absence of uniform technology across all connected devices.

The IoT will pave the way for greater insight, accessibility, and volume of consumer data, enabling unparalleled reach to the right audience with the right message at the right time. While challenges will need to be overcome, the IoT is set to reshape advertising as we know it today.