As the everyday objects around people become increasingly “smart,” the consumer will no longer connect to the Internet through just their desktop or smartphone.
As wearable computers, digital signs, connected cars and smart TVs penetrate deeper into their respective markets, consumers will no longer be connected to the Web by a single device but by everything around them.
This “Internet of Things” allows plenty of advantages for users and the companies trying to reach them. But as the world becomes a more connected place, brands must learn the rules of this new digital ecosystem.
A recent IAB panel, “The Connected Consumer: Digital Out of Home, In-Car and The Internet of Things,” discussed the exciting possibilities and potential pitfalls of the ever more connected world. Moderator Tobin Trevarthen, CEO and founder of Spatial Shift, led a discussion with some of the most connected experts both on the Internet and outside of it.
This Internet of Things may come to fruition quicker than some think. By the year 2015, it is predicted that 1 trillion devices will be connected, but some smart devices are ahead of the class. Connected cars and smart TVs are both set to out-ship their counterparts by the end of this year. And though the public is a bit leery when it comes to Google Glass, when users give wearable computers a chance they are very satisfied by the products.
“The Internet gave everyone a voice, but the Internet of Things creates this conversation,” Tom Touchet, CEO of City24/7, said in the panel discussion.
Touchet works to help cities become more connected and sees all this new data as a two-way street. Data can be exchanged like a conversation between brands and consumers in mutually beneficial ways. Brands will be able to better target consumers with more local and timely content that ultimately makes for better products and services.
A city transit service could inform a commuter that a bus is closer to him than the next subway train. That commuter might then purchase his bus fare on his phone and the city may then use that data to inform another commuter that bus will be crowded. Maybe on the way home that same commuter will be served a happy-hour ad from a pub down the street because he signed up for a newsletter during a local craft beer festival.
“Take that specific data point and continue that interaction across your day, and really you’re having this amazing conversation, digitally, with cities and with brands,” Touchet said. “I think that is the power of the Internet of Things – it’s all this learning that comes from all this data as you interact with the actual infrastructure all around you.”
All these smart devices bring many new opportunities for brands to talk to consumers and gather data on their habits. When smart cars drive themselves, users will be consuming more media on the road to pass the time. Smart TVs will give advertisers insights into the habits and preferences of channel surfers, allowing them to serve custom ads to appeal more to consumers.
With these new types of media, companies have to figure out new ways of interacting with users and telling stories. Because despite all the technological advancement, storytelling is still the best way to connect audiences with why they should support a brand.
According to panelist Emanuel Brown, Director of Design Strategy at Citizen, a mobile innovation firm based in Portland, we’re seeing the classic footprint extension model in these new media. Companies are taking old content and shoveling it into new media, much like when they began filming the production of radio shows to broadcast on TV.
Though that is a good way to start exploring these new media channels, companies that take risks and experiment with new ways to reach consumers will start to carve out a competitive edge for themselves.
Using data is a great way to figure out how effective all these new methods are, but it’s important for companies to develop new metrics for success and realize the limitations of each medium.
“It is all about ‘how do we connect the physical and the digital’ and it’s not just about making those connections,” Josh Kruter, VP of Digital for Clear Channel Outdoors, said. “It’s about making those connections in ways that are smart, compelling and contextually relevant and beyond that, they actually also have to create value, they can’t just happen.”
“When we think about the value we have to create, that literally have to span the interchanges you’ve been hearing: it’s got to be valuable for the brand, it’s got to be valuable for the consumer, it has to create value for the publisher and the platform.”
While a QR code on a bus stop may not be the best way to drive social media likes, a compelling digital sign that helps a bored commuter pass the time adds value to that consumer’s experience. That added value creates positive impressions for the sponsor. Letting gamers take an audio/visual tour of the next franchise installment or displaying a giant virtual version of the latest smartphone that lets users take selfies can create immersive ads that feel natural in that context.
Sure, that bus stop ad might not generate a Facebook like but it can create a connection between that consumer and the brand. And if done right it might go viral, like Pepsi Max’s Unbelievable campaign, which used an augmented reality digital sign to simulate monster attacks, alien invasions and robot rampages.
But as helpful as all this data can be, it’s important for companies not to rely too heavily on it, using it as a sole crutch to make decisions. An excellent data model can create an advantage, but at some point all data fails to predict the real world, leading to assumptions and false conclusions.
Companies have to engage in a balancing act between their own human intuition and this flood of new data. They need human creativity to forge new ways to reach consumers. And they need data to see if those risks panned out and to help perceive the shifts in their own industries.
With the Internet of Things so close on the horizon, it’s important for companies to be agile and responsive. Who knows when another service like Uber or Lyft will come around to turn a market on its head?
Connected cars may provide even more disruptions to the auto industry. Brown said insurance companies may start providing more individually tailored coverage for drivers, based on how much they drive rather than a blanket policy based on demographic info.
And though companies would probably rather provide blanket coverage at greater rates, if they don’t take advantage of the new technology other companies will.
“Some business within these industries are going ‘hmm the writing seems to be on the wall’ and if we disrupt ourselves before something happens, we won’t be disrupted and we’ll own it and manage our way through it,” Brown said.
“There’s always ways to make money and in this connected economy it won’t be about big dollars – it’ll be about lots and lots and lots of tiny dollars.”