Twenty years ago, if someone told there would be self-driving cars or that a portable speaker could answer complex questions, you’d probably think they were insane. Who knew physical objects would be capable of gathering and sharing data?

Now, in 2020, digitization is happening all the time. From Fitbits to thermostats to smart speakers, we’ve seen just about every household item evolve into a smart device — and they have fundamentally changed the way we live. There are already more IoT devices than people on the planet.

As a marketer, you know data is extremely valuable — for knowing your customers, gauging your business success, and informing future decisions. Whether customer interactions happen online, offline, or on mobile devices, they generate digital data. Even contact center conversations and in-store visits are being digitized to give companies point-of-sale insights into buying behavior.

It’s the Internet of Things (IoT) that puts this data to use. The IoT refers to an ecosystem of smart devices that collect and exchange data through the Internet. As we gain access to more data, the role of IoT in marketing is growing at an unprecedented rate.

Marketers, are you ready to tap into the power of the Internet of Things? In this article, we’re revealing where IoT and marketing join forces, and how you can take advantage of this overlap.

What Is IoT?

The growing amount of platforms, devices, and touch points that are digitally interconnected is known as the Internet of Things (IoT). In the current market, there is a wide array of devices that operate as part of the IoT, including:

New, standalone types of devices like fitness trackers and other quantified gadgets
Existing and household items reimagined, like smart watches, refrigerators, and thermostats
AI-powered digital assistants like Google’s Nest & Home, Amazon’s Echo & Alexa or Apple’s Siri

All these platforms can reveal insights to how different products are used. In the case of a car, you can determine total miles driven. In the case of a telecommunications provider, you can mine data about internet usage. These usage patterns and behaviors can help companies determine if customers are using the services for which they are paying and getting the appropriate value.

And as people continue bringing the IoT into their homes, strapping it to their wrists, or talking to it in their cars, companies will have access to more and more data that can help inform important business decisions.

Why Should Marketers Care?

Morgan Stanley predicts that 75 billion devices will be connected by 2020.

IoT is revolutionizing the marketing landscape. Because IoT technology connects the internet with objects that are ubiquitous in our daily lives, marketers in almost every industry can harness it in some way or another.

Tapping into IoT can help marketers with a variety of functions, including:

Log-in capabilities to store wish lists, gift lists and shipping addresses
A method of tracking frequent purchases or refilling periodic orders
Loyalty rewards, birthday acknowledgments, and other personalized interactions
Preference settings, such as applying promo discounts to one product type over another
Integrated online marketing, such as newsletters, and traditional mail advertising

But the opportunity for connection and personalization doesn’t end there. Continue reading to discover five trends that reveal how IoT and marketing overlap.

Contextualizing Personalization In Real-Time

Brands can target those who regularly use IoT devices with highly targeted marketing messaging. Why? Because these smart devices provide more personal details about individuals that marketers and advertisers can use to customize messages.

Take a fitness tracker for example. It’s true that marketers don’t need to tap into the tracker to know someone’s health conscious — the fact that they purchased it is a clear indicator of that.

When a consumer buys an Apple Watch, they enter in their weight, height, and other details about their activity level. The fitness tracker also has GPS capabilities to track exactly where the person is. Marketers can also leverage third party intent data to learn about a person’s specific health interests.

Equipped with this higher level of data, a brand could target a weightlifter with an ad for an equipment store located near his home. Or, persuade a health-conscious consumer to make a purchase at a nearby health foods store. The possibilities for personalization grow just as the amount of accessible data grows.

Enhancing The Customer Experience

While Dutch brewer Heineken has been a worldwide brewing leader for the last 150 years, they’ve kept their brand current by tapping into the growing amount of data available.

Heineken broke new ground with its Ignite innovation, the first ever interactive beer bottle. The primary objective was for the bottle to socially connect people in clubs, while allowing the beer to remain the central focus.

With wireless networking technology, micro sensors, and LED lights, these beer bottles turn into interconnected devices that can sense motion and music in a club setting. The smart bottle sparks when it’s tipped back for a sip, and it lights up when it clinks with another bottle (‘Cheers!’)

The concept of the Ignite Bottle inspires mobile fans to connect with the brand via beer bottles rather than smartphones. This innovation is just one way brands have wired a physical product to take on digital functions. Above all, this product certainly elevates the customer experience for Heineken beer drinkers.

Increasing Scalability

When’s the last time you used a physical loyalty card? If you’re a millennial or younger, chances are, probably not anytime recently.

Companies that once occupied the physical world are now rapidly expanding into a digital world, and everyday goods are becoming digital currency.

We bring up the loyalty card question to point to the proliferation of digital tools — like branded apps — that allow us to make transactions all with the tap of a button or scanning of a barcode on our screens. Big companies like Starbucks and rely on branded apps like these that have allowed them to transition their loyalty program to be completely digital.

Collaborating With Complimentary Businesses

The Internet of Things can also help companies improve customer satisfaction and differentiate themselves from competitors. A key driver of this is collaboration with complementary brands.

For instance, Spotify and Uber successfully linked their services so that their customers can connect their Spotify accounts to their Uber apps. Through this partnership, riders can easily access their Spotify playlists from the Uber app. This seamless integration — all powered by the magic of IOT — ensured brand loyalty for two successful companies.

Another example is the long-standing partnership between Apple and Nike.

To make Nike+, Apple collaborated with Nike to bring runners a small transmitter they could put in their shoes, allowing them to track statistics like total time of workout, distance traveled, pace, and calories burned. Since then, Nike has built out apps for runners and fitness enthusiasts that help them track just about everything — all through the IoT.

Adopting A Heightened Focus On Utility

From emotionally moving videos, to humorous blog posts, companies are consistently pushing out content that meets customer needs. Are they reading your mind?

No, but they are making use of big data — and data informs research and development efforts. Big data and the IoT are what have helped companies create products that solve common problems.

Think of kitchen appliances. Everything from toasters to ovens to dishwashers have been reinvented to incorporate smart components and internet connectivity.

Let’s consider a Samsung refrigerator. The Samsung Family Hub is a smart fridge that contains functionality around food management, communication, and entertainment. Users can sync their calendars to it, post messages, and share schedules. Remotely, they can see what’s in their fridge as well as access recipes and other contextualized information.

An innovation like this focuses on useful elements that a standard fridge doesn’t have. With a focus on utility, the IoT is making consumers’ lives easier and more efficient. There are even IoT coffee machines that send out alerts when you’re running low on coffee and IoT connected beds that adjust the room temperature to optimize your sleep patterns.

Leveraging Smart Devices

Marketers are facing the mass adoption of interactive voice through digital assistants like Amazon’s Alexa, Apple’s Siri, and Google Home.

One minute, these devices are blasting your Spotify playlists. The next minute, they’re telling you the weather forecast.

The Alexa Skills market is growing in particular. Like third-party apps, Alexa Skills are designed to make life and work easier. They can help people perform a variety of tasks — from controlling meeting rooms to adjusting a thermostat to turning on lights. There are over 100,000 Alexa skills. Amazing right?

Many brands have launched a variety of helpful commands and skills that now fill Alexa’s arsenal. Take a look at these examples:

Patron: With the skill called Ask Patrón, you can talk to Alexa just as you would a bartender for cocktail suggestions, recipes, gift recommendations, and facts about tequila.

Starbucks: With the Starbucks Reorder skill, Starbucks customers designate their usual order in advance and can place that order through one of the 10 most recent stores they’ve ordered from.
Tide: The Tide Stain Remover skill offers consumers with detailed voice instructions on how to remove over 200 stains.

More than 70 million people are expected to have smart speakers by 2020. Brands like Tide, Starbucks, and Patron, are counting on this growth as they try to connect these skills with actual sales.

Conclusion

The number of smart, connected devices is exponentially growing. And as AI and machine learning technologies get more and more data, it will only become more important to use this data over time.

Consumers expect companies to recognize them for their unique needs and deliver on them. With the Internet of Things, brands are better able to recognize these needs, explore them, and launch integrating marketing campaigns that can solve them. While IoT can certainly make advertising more intrusive, it’s important for marketers to use it to create personalized messaging in consumer’s best interests.

The Convergence Of Marketing & The Internet Of Things (IoT)