A Marketer’s Guide to The Internet of Things
With research firm Gartner forecasting that the number of connected things worldwide will reach 20.4 billion by 2020, the rise of the Internet of Things (IoT) is hardly overstated. Indeed, the IoT is already here: The same forecast predicts that 8.4 billion connected things will be in use this year, a 31 percent increase from 2016.
Data is the primary asset that the IoT offers businesses. In fact, CyberCoders estimated recently that the digital universe will reach 40 zettabytes (40 trillion gigabytes) by the end of this decade. As things from cars to homes to stores become equipped with smart sensors, organizations will have the opportunity to gather enormous amounts of customer information that can bolster their business intelligence initiatives and enhance their marketing efforts through unprecedented personalization.
But before undertaking massive and costly IoT projects, businesses will need to develop compelling business cases, Gartner cautions. For marketers, this will mean developing an understanding of what the IoT entails, what opportunities it offers them, and how to take advantage of those opportunities.
The “things” that make up the Internet of Things cover a vast range, so coming up with a single way to define the IoT is tricky. According to Laetitia Gazel Anthoine, CEO of Connecthings, operator of a global network of beacons in public spaces, the IoT “encompasses all objects that can interact with a human or another object through the use of the Internet.”
Dan Mitchell, director of retail and consumer packaged goods at SAS, offers a similar view. “Any device or sensor that’s connected to the Internet is part of the IoT. That includes everything from old-school infrared sensors at store entrances to radio-frequency identification tags on merchandise to beacons that connect to consumers’ smart phones to new lighting systems that form the foundation of a smart store,” he says, adding that having “a software component that can be enhanced with new functions,” such as new ways to gather or analyze data or make next-best offers to customers, is a key characteristic of IoT devices.
Anand Venugopal, head of product for StreamAnalytix at Impetus Technologies, a Big Data software products and services company, says that the IoT “encompasses the entire universe of tools, devices, instruments, products, and other things used by consumers and corporations. If an electronic circuit or an electronic sensor can be attached to it, it can be or will become an IoT-connected item.” But there are subdivisions, he notes. “The IoT world is typically seen as a collection of large domains, each of which may have its own technology, business, user ecosystems, and stakeholders,” he says, citing connected cars, mobile phones, and smart homes as examples.
Tom Libretto, chief marketing officer at Pegasystems, a customer engagement software company, provides a somewhat different take: The IoT, he says, “is only tangible and relevant in the context of how it’s applied to practicable business challenges to produce expected business outcomes.”
In that context, “the common DNA” involves “the capture, collection, normalization, and analysis of environmental or performance data generated by a physical thing” to facilitate some sort of action by the thing itself, by a human being, or by other systems, applications, or things that all have defined roles in producing desired outcomes.
The IoT has three key attributes, according to Robert Gimeno-Feu, managing director of Accenture Digital and IoT analytics lead at Accenture Analytics: It has to connect, compute, and communicate. Connect refers to “the ability to connect sensors or devices to the Internet, cloud, or other devices.” Compute refers to organizations’ “ability to analyze the data generated from their devices, products, customers, and partners and then use that data to derive insights.” Communicate refers to “the ability to take action on the insights and communicate them to people, other devices, or the originating device to do something.”
Due to the “miniaturization of technologies” and the reduced cost of computing power, “there is almost nothing that could not become connected if a use case is developed for it,” Gimeno-Feu says. The possibilities, he adds, are “literally endless.”
WHAT THE IoT MEANS FOR MARKETERS
This proliferation of devices means that marketers will be dealing with more data than ever before. “For marketers, it really is all about a massive awakening of consumer data for them to draw better insights from, and for the most adept marketers, it provides an incredibly rich experience for the customer,” explains Jeremy Swift, cofounder and CEO of Cordial, provider of an adaptive messaging platform.