CONNECTING THE DOTS:How IoT Revolutionizes the Next Generation’s Digital Marketing Landscape

By Chloe Spilotro

If you like it, tweet it! Use #ConnectedDots

OVERVIEW

•What is IoT?•The Millennial Generation

•Research Question: How does this apply to marketing?

•Current Examples of IoT Marketing

•Emerging Applications

•Challenges of IoT

•Final Implications

THE INTERNET OF THINGS

• “the concept of everyday objects – from industrial machines to wearable devices – using built-in sensors to gather data and take action on that data across a network.”1

•Started as machine to machine communication (M2M)• Caller ID - first consumer application in 1968

•Term “IoT” first coined by Kevin Ashton in 1999

http://www.sas.com/en_za/insights/big-data/internet-of-things.html

BRIEF IoT TIMELINE

1999Term “IoT” first

coined by Kevin Ashton

2016What’s Next?

2007iPhone

introduced

Apple Watch Released

2015

2009Amsterdam

launches first Smart City initiative

Smart Thermostat

Nest and IFTTT (If This, Then

That) Founded

2010

2003Camera phones

become popular

First iPod released

2001

SmartThings funded by Kickstarter

(later acquired by Samsung)

2012

Twitter launches for public use

2006

IoT Milestone

Tech Milestone

1999Term “IoT” first

coined by Kevin Ashton

2016What’s Next?

2007iPhone

introduced

Apple Watch Released

2015

2009Amsterdam

launches first Smart City initiative

Smart Thermostat

Nest and IFTTT (If This, Then

That) Founded

2010

2003Camera phones

become popular

First iPod released

2001

SmartThings funded by Kickstarter

(later acquired by Samsung)

2012

Twitter launches for public use

2006

IoT Milestone

Tech Milestone

1999Term “IoT” first

coined by Kevin Ashton

2016What’s Next?

2007iPhone

introduced

Apple Watch Released

2015

2009Amsterdam

launches first Smart City initiative

Smart Thermostat

Nest and IFTTT (If This, Then

That) Founded

2010

2003Camera phones

become popular

First iPod released

2001

SmartThings funded by Kickstarter

(later acquired by Samsung)

2012

Twitter launches for public use

2006

IoT Milestone

Tech Milestone

1999Term “IoT” first

coined by Kevin Ashton

2016What’s Next?

2007iPhone

introduced

Apple Watch Released

2015

2009Amsterdam

launches first Smart City initiative

Smart Thermostat

Nest and IFTTT (If This, Then

That) Founded

2010

2003Camera phones

become popular

First iPod released

2001

SmartThings funded by Kickstarter

(later acquired by Samsung)

2012

Twitter launches for public use

2006

IoT Milestone

Tech Milestone

IoT Milestone

Tech Milestone

IoT Milestone

Tech Milestone

1999Term “IoT” first

coined by Kevin Ashton

2016What’s next?

First iPod released

2001

2003Camera phones become popular

Twitter launches for public use

2006

2007iPhone

introduced

Amsterdam launches first

Smart City initiative

2009

2010Smart Thermostat Nest and IFTTT (If This, Then That)

Founded

Apple Watch released

2015

2014Amazon Echo

released

SmartThings funded by Kickstarter

(later acquired by Samsung)

2012

EXAMPLES OF IoT

What might come to mind:

More than just consumer goods

THE MILLENNIAL GENERATION•Born between 1982 and 1996

Older: Currently 28-34 Younger: Currently 20-27

•Divide due to the economic collapse in 2008 • Older millennials directly affected by Great Recession• Younger millennials simply observed

•Common traits:• Achievement-oriented• “Generation Me” • Sheltered

http://academic.mintel.com/display/730147/

MILLENNIALS LOVE TECHNOLOGY

”The future is not about three screens or four screens or fourteen screens. It’s about one screen: whichever screen is in front of

[consumers].”

87% use 2-3

connected devices at least

once daily

30% plan to

purchase wearable tech in

the next 5 years

80% use 2+ internet devices while

watching television

1, 2. http://www.forbes.com/sites/danschawbel/2015/01/20/10-new-findings-about-the-millennial-consumer/2/#db9444142b82 3. http://adage.com/article/digitalnext/millennials-party-brand-terms/236444/ 4. Mitch Joel, Ctrl + Alt + Delete

MILLENNIALS’ GROWING PURCHASING POWER“I’ll have more purchasing power

than anyone else by 2025.”“I like to be one of the first people

to buy new/trendy products.”

MARKETING TO MILLENNIALS

“Don’t advertise to me!”

•Marketing should be engaging, meaningful, and targeted

•Aware of marketing efforts… and how to dodge them

•Transparency is key

•Content Marketing: “creating and distributing relevant and valuable content to attract, acquire, and engage a target audience with the objective of driving profitable customer action.”

1. http://academic.mintel.com/display/730154/ 2. http://contentmarketinginstitute.com/2012/06/content-marketing-definition/

RESEARCH QUESTION:

How will an increase IoT connected devices change the marketing landscape to

target millennials?

CURRENT IoT MARKETING INITIATIVES

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HOW FIRMS COLLECT DATA

Tracking Behavior

Sensor Driven

Analytics

EnhancedSituationalAwareness

Product PromotionPlacement PriceHighly customized

products that provide truly

unique experiences

Constantly connected and interconnected

Pricing based on actual behavior, not

arbitrary demographics

Better targeted content, better

delivery, better yield on promotional

efforts

MARKETING APPLICATIONS

LUXURY HOTELS

High end hotels who offer guests unparalleled comfort as their service could replicate a guests’ home settings to provide that customized experience. Theoretically, hotels could pull data from a customer’s phone to examine what the settings for temperature, lighting, alarms are in their own

home to actually duplicate that comfort in a hotel room and provide a unique customer experience. Millennials are notorious for loving experiences rather than products, so providing an

experience as unique as each client would be an exciting proposition.

EVERYDAY COOKING

Health conscious consumers could purchase an IoT connected pan that analyzes the nutritional value of what they’re cooking. It could be programmed to them and automatically send that data to

a food log app on their smartphone such as MyFitnessPal (powered by Under Armour). This provides Under Armour much more specific demographic information and insight into key

behaviors of their consumers. Grocers could also use this information to see what customers are actually cooking with their products. For a health-oriented generation, this too would be an

application we might see sooner rather than later.

REAL ESTATE

Real estate agents could use IoT devices to quickly collect information of those attending an open house so they can follow up with similar listings. Additionally, they could target those consumers for

other homes by coupling previously collected data with geolocation services to send push notifications to their phone when they are in an area with similar listings that are listed by that agent. Young millennials are sooner apt to purchase a home in their lifetime than older millennials, so this

would also be a practical application.

RETAIL AND BOUTIQUES

An IoT enabled mirror could be in a fitting room at a retail boutique so a consumer doesn’t have to try on clothes directly- rather, it can scan a consumer’s body and outfit it with clothes based on the consumer’s taste, determined by previously collected data. It could also suggest different outfits

based on this data, and continue to market to the customer after he/she has left the store.

BIGGER THAN BIG DATA

Storage Analyzing Data Actionable vs. Big Data Relevance

PRIVACY ISSUES•Minimal privacy unless data is being collected anonymously...• ...still, there is almost always a way to collect logs to map anonymized data to participants.

“Perceived risks to privacy and security, even if not realized, could undermine the consumer confidence necessary for the

technologies to meet their full potential, and may result in less widespread adoption.”

https://www.ftc.gov/system/files/documents/reports/federal-trade-commission-staff-report-november-2013-workshop-entitled-internet-things-privacy/150127iotrpt.pdf

SECURITY RISKS•Up to 70% of the best selling IoT consumer products lack adequate security measures •Security breaches lead to huge issues

• Hackers can use one device as a pivot point to get into higher value devices with more sensitive information

• Compromising consumers’ privacy and information could lead to legal repercussions, distrust in brands, and the end of a company

1. http://go.saas.hpe.com/fod/internet-of-things 2. http://treelineinteractive.com/blog/expert-advice-for-securing-the-internet-of-things/

ETHICS FOR MARKETERS•Data minimization: the concept that companies should limit the data they collect and retain, and dispose of it once they no longer need it •The Backwards Research Method

• Research Question > Data Collection > Analysis• Data Collection > Analysis > Research Question

•Example: Verizon Wireless • Use of hidden tracking technology, supercookies, for targeted

advertising without customers’ permission

FTC, http://www.nytimes.com/2016/03/08/technology/verizon-settles-with-fcc-over-hidden-tracking.html?smid=tw-nytimesbusiness&smtyp=cur&_r=0

CONCLUSION

• More ways to collect better data• More creative campaigns• More ROI

• “With great power comes great responsibility”

•Need to have open communication between marketers and consumers about data collection

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THANK YOUQuestions?