How the Internet of Things (IoT) Is Transforming Advertising

As a rapidly growing ecosystem of devices that sense user behaviors and transmit data to each other, IoT uses algorithms that trigger particular data-based responses and standard Internet protocols to make these devices smart and intelligent.

According to recent estimates, nearly 2 billion connected devices are already being leveraged today and 9 billion devices are projected to be implemented by 2018 globally. It seems to be a prompt prolifiration, doesn’t it?

Up to the point, we have learned a great many ways the IoT is anticipated to transform living habits and different industries.

For one thing, applications capable of determining real-time consumer behaviors have a high potential of changing the way advertising business operates today.

CISCO believes the advertising category (implying internet-connected banner ads) is going to become one of the top-of-the-line IoT categories alongside with industrial plants and backup systems for telecommunication services.

In the age of IoT, technology, user experience (UX) design and social media should be hardwired into the creative process to allow advertisers take advantage of robust data analytics capabilities and focus on customer journey rather than just copy and artwork. With the power of IoT, advertisers and marketers have everything they need to launch much more efficient marketing campaigns and projects, personalize their communication with the target users and deliver more predictable outcomes resulting in better ROI and smarter business decisions.

Forbes’ contributor Steve Olenski points out that “consumers respond far more favorably to products which offer appealing personalities, as evidenced by the vast numbers of products which already have been linked in commercials and advertising to adorable kittens and talking coffee machines”.

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Considering that plenty of smart devices are going to be fixed on the entire terrain of data above marketing, new advertising tools that are emerging or about to emerge any time soon will force traditional advertising agencies to elaborate much more prolific strategies using data resources and level up investment income for the forthcoming realization of the output.

The latest Global C-suite study conducted by IBM suggests that the prevailing majority of CMOs globally believe IoT the predominant technology over the next 3 to 5 years to encourage a tremendous change of game as far as advertising is concerned. Most view the IoT tech as a way for their business to evolve and provide more value through bringing new ad products and services to the market.

In fact, blended with wearable tech and augmented reality (AR), IoT will pave new ground for these products and services in the near future. Wearable devices such as smart watches, glasses and wristbands as well as health conditions tracking monitors will change the traditional advertising landscape by blurring the lines between real-time and online marketing.

Among some innovative advertising types and services that are invoked by IoT are next-hen interactive billboards focusing on personalization of delivered marketing messages, enhanced user loyalty as a result of more effective engagement options, in-car radio messages targeting drivers and, of course, smart TV.

Now let’s review these and other IoT enabled ad products in details:

Interactive billboards

While still being in development, this new marketing tactic will be used to harvest consumer insights and turn them into cool interaction points. Interactive billboards are able to show flights progress in real time, alert passengers about possible delays and changed weather conditions, promote discounts and provide fun to boring passengers in the airports and railway stations.

U.S. retailer Forever 21 uses an ingenious thread screen all over its stores to turn customer selfies into threaded pictures and, thus, increase engagement with the brand.

A new project by CCO, one of the world’s leading billboard companies, is called Connect and aims at beaming content to pedestrians via embedded NFC tags. Like notorious QR codes that had stayed on top of new online marketing trends’ predictions for many years but never became a real trend in either USA or Europe, NFC will also allow passersby to download content from billboards (e.g. coupons or fliers). However, unlike QR codes, NFC tags will open up great opportunities for marketers. Each time a passerby downloads content from the billboard, the advertiser is able to capture important metrics such as exact date, time, kind of device used and conversion rate, and use these insights to create better targeted and personalized campaigns going forward. With the help of NFC technology, advertisers will encourage customers to buy items right through billboards while standing in line or waiting for departure at the airport, to push branded apps and games and as a portal to connect people with the brand’s social media accounts, etc.

Yet, IoT enables interactive displays to go far beyond their current capabilities. For instance, LiveBoard has recently built software based on Intel® AudienceImpressionMetricSuite (IntelAIMSuite) technology that makes it possible for advertisers to analyze the quantity and continuance of eye contacts with the display as well as identify gender and age of those who watched an ad clip demonstrated on the billboard.

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As a result, a new model of collaboration between billboard companies and advertising agencies or in-house marketing departments will emerge in the business. It looks like win-win now: billboard providers are able to offer a premium form of advertising, while advertisers get the holy grail of information about their audience. However, while display providers push the IoT technology forward, the advertisers have yet to find the “magic hooks” to get customers to engage their smartphones and wearables with billboards.

Driving brand loyalty through continuous engagement

Nike demonstrates one of the best examples of how brands can use enhanced consumer connectivity via creation of community of fitness tracking devices and applications. The Nike+ community currently boasts over 38 million members that are encouraged to share mountains of live data relating to their personal use of the Nike+ ecosystem.

Perhaps one of the best examples of consumer connectivity and community creation is Nike+, a collection (or ecosystem as Nike refers to it) of fitness training and tracking devices and apps. The community now boasts over 38 million members (although it’s not certain if these are all active). The key here though is continued interaction. Consumers are happy to share huge amounts of live data because the relationship is two-way; there is a benefit for doing so. This is what drives the success of Nike+ and why marketing to the community and potential new users is easier than say advertising just a pair of running shoes through a poster ad.

In-car messaging

As connected cars market is set to put 220 million smart cars on the road globally by 2020, in-car messaging opens a great potential for advertisers.

For instance, Toyota’s radio interaction with Apple’s Siri allows drivers to ensure their smartphone is turned to airplane mode to prevent accidents while they’re driving. As such, evolution of the text-to-speech technologies will help bring the in-car messaging to a new quality level and create more application use cases for advertisers pushing automobile services forward to drivers.

In the next blog post we’ll explain how smart TV and IoT will help transform advertising. Follow us in Twitter and/or LinkedIn to get an alert once the post is out!