Wondering what comes next after PC and mobile connectivity? Then ponder no longer: The future of the Internet is everything.
“It’s a massive blurring of the edges where the Internet industry is wondering what is possible if anything is connected to the Internet,” says Phil Morle, CEO of tech startup incubator, Pollenizer. “This is the next platform wave after PCs and mobile. Now it’s going to be stuff.”
Helpfully, the tech world has provided an all-encompassing name for this trend: The Internet of Things. On the personal front, the IoT includes wearables like fitness bands, smartwatches, earphones with sensors and head-mounted displays. All of these are capable of recording and transmitting data about a user’s health, location and more.
In the home, the IoT makes it possible to automatically and remotely control lighting, the thermostat, security systems and more with a smartphone. Usage information provided by these smart devices can provide insights to users including how to improve the efficiency of their homes.
In the car, the dashboard is becoming more like a tablet – another screen with its own mobile operating system and apps. Meanwhile, the connected car can receive over-the-air firmware updates and measure its own performance, sending telemetry data back to the manufacturer for analysis.
The Internet of Things could also have a big impact in a retail setting. For example, supermarket chain, Woolworths, placed an interactive sign board in a train station that shows pictures of food items and product barcodes. Customers can use their smartphones to scan items on the sign and quickly order them for delivery.
All of this is coming sooner than you think. The Internet of Things made a big splash at the 2015 Consumer Electronics Show (CES) in Las Vegas, with objects ranging from a Wi-Fi enabled tea kettle to a self-driving Audi luxury car that can be started – and summoned – by an LG smartwatch.
According to Deloitte’s 2015 Technology, Media & Telecommunications (TMT) Predictions report, 1 billion wireless IoT devices will be shipped globally this year, worth $10 billion. That’s a 60 per cent increase from 2014 and will result in a global install base of 2.75 billion IoT devices, the consulting group says. The services enabled by IoT could also be worth as much as $70bn.
And that’s just the beginning.
Defining IOT
The Internet of Things can be tricky to define, as it is a broad category that encompasses just about any object with sensors and an Internet connection. It is also sometimes referred to as the machine-to-machine (M2M) market, and by at least one technology vendor as the ‘Internet of Everything’.
Neon Stingray CEO, Chris Flintoft, explains the Internet of Things as a way of enhancing existing objects people use in their everyday lives through connectivity. Neon Stingray is a four-year-old media and connected devices startup acquired last year by global digital marketing technology firm, Valtech.
Connecting to the Internet could allow an object to be controlled remotely by people or software, or to measure itself in some way and transmit that data for people to act upon, he says.
“Nest hasn’t changed anything in air conditioning in terms of the technologies of air conditioning itself. What it has done is started to make it more convenient for modern consumers to interact with air conditioning systems that already exist,” he says.
For Morle, some of the most exciting applications of the Internet of Things may be in healthcare. Fitness bands and other quantified-self technologies provide a fun and interesting way to connect our bodies in different ways to the Internet and learn how to make them more healthy, he says.
These objects are currently focused around fitness tracking, but could evolve to track things like chronic pain or blood sugar levels. For example, Google is working on a smart contact lens that measures glucose levels in a diabetes patient’s eyes.
IDC associate vice-president, Craig Stires, predicts a potential lucrative space could be “hearables”, where sensors are added to headphones to measure oxygen levels, perform ECG tests and take body temperature. He says Apple is in prime position to enter this area following its recent acquisition of Beats headphones.
The result of developments like these, says Stires, is that “people are becoming more instrumented”.
Marketing as a utility
As the Internet of Things expands, so do the opportunities for marketers, say experts.
“IoT is taking below-the-line marketing and it’s just making it smarter, more personal and more important,” says Stires.
It’s not about blasting ads to new kinds of devices, he says. “The ability to deliver experience is what’s going to make that marketing agency really build a brand.”
Morle, whose organisation works with large advertising agencies, says the Internet of Things gives marketers the chance to “create marketing through utility”. He gives the Nike Fuelband, a wearable fitness band, as a key example.
“You have a Nike object on your wrist that you pay attention to probably hundreds of times a day. This is a very interesting marketing proposition in contrast to campaign marketing and TV ads. The marketing is the object and the object persists with the consumer,” he points out.
“At the moment, we do develop with the customer in mind, but a lot of it is still making assumptions about customers,” says ADMA CEO, Jodie Sangster. “In the future, that won’t be necessary.
“It’s about understanding how consumers are interacting with products and then using data to have a more refined discussion with the consumer.”
That same ability could help a marketer better time and target advertisements. For example, a pair of running shoes shown at this year’s CES tells the wearer when it’s time to replace them.
Deloitte Australia TMT industry leader, Stuart Johnston, says it’s all about learning about customers from the data they produce.
“There is an opportunity to capture … insights around usage and how consumers actually interact with the products that can then inform marketing decisions,” he says.
Marketers could also benefit from a wealth of data from the assortment of Internet of Things devices in development by tech companies including fitness bands, smartwatches, connected cars and smart home devices. Information from these connected things will assist marketers to build behavioural profiles of customers, says Stires.
Perhaps the most important information the Internet of Things will provide is location, data that used to be owned by the telcos, he says. Fitness bands, in contrast, provide a wealth of information about a person’s health and fitness, such as how much they walk every day, the health of their heart and how well they are sleeping, which promotes another form of engagement. The IoT could also give marketers greater access to information about what customers purchase, and even their level of influence through their public comments and recommendations, Stires says.
Stockland, a property development company overseeing retail centres, office buildings and retirement villages, sees much potential in using data from IoT technologies to improve its spaces for customers, according to Ben Allen, general manager of group marketing.
“It’s the ability to gather data and information, whether that be personal or even sensory-type data, and be able to try to make sense of that and create some value,” he says. “It is a very exciting space because it can offer the ultimate in context. Marketers for years have been trying to guess context.”
For Stockland, the IoT provides a way to better understand how its community spaces and assets are working and how to make them more efficient, as well as the opportunity to create greater value for residents through personalisation, greater convenience and improved security, he says.
A couple of years ago, Stockland looked at location data of residents to see how they were using the community. “For the first time ever, our designers and our planners had real-time data around how the spaces were being used and what was popular and what wasn’t,” Allen says.
Previously, the property company had to rely on focus groups. Real-time location data “gave us an insight that we hadn’t had before”, he says.
That issue of privacy
The ability to collect more data about consumers and create behavioural profiles could raise red flags for privacy advocates, and marketers should be careful how they make use of personal information.
“Marketers have an increased opportunity to gather further and deeper data about their consumers as the Internet of Things emerges,” says Flintoft. “However, they need to continue to provide the same level of commitment to confidentiality and privacy as is required by both regulators and what they expect their customers to be comfortable with.”
Combining multiple streams of seemingly innocuous data could potentially paint a very personal picture of a consumer, adds Morle. “We’re going to have to be very careful about how we use this data and how these silos of data are actually connected together.”
The combination of a smartwatch and a home automation system could reveal sensitive information about a person’s habits, says Sangster.
“If we know, for example, the data that can be taken from a watch will tell us the time someone gets home because it unlocks their door or turns their light on, that is extremely personal data and we will have to have very clear guidelines around it both from a security perspective and from a user perspective,” she warns.
Stires suggests marketers involve the legal team to ensure no privacy laws are breached. “You’re getting access to data that you’ve never had access to before, and the legal treatment of that data may be something where you’re in an unfamiliar space.”
But Sangster says marketers shouldn’t just stop at meeting legal expectations. “It’s thinking about how I as the consumer would feel about certain information being used or not used, and the types of information I want to receive from a company if it is going to be used.”
To some degree, privacy considerations for the Internet of Things are just extensions of what marketers have been doing all along for mobile and social media.
“Mobile was probably the bridge to it,” agrees Sangster. “Mobile has always been seen as a personal device and potentially could be so intrusive if you’re not using the device or the data from it in a privacy-compliant way.
“The principles we have in place are right. It’s just going to have to go to its next iteration when we move into a world such as this where so much more data can be produced.”
Gearing up for the IoT
“It’s not for everybody, particularly not at the moment, but for sectors who are trying to differentiate themselves and trying to create that really deep level of engagement with customers, then yes it’s something they should definitely be aware of,” says Sangster.
Marketers should think of the Internet of Things as the next key technology to embrace following mobile, says Flintoft.
“The step to extending beyond the mobile to interacting with devices will be a very short one,” he cautions. “Marketers should absolutely be planning for this now in 2015.”
Allen asserts: “It’s not a fad”. “Therefore, you need to really be getting quite serious around how to create customer value from this change.
“Don’t look at what the technology can do. Look at what the drivers of your customers’ value is and how that technology might be able to amplify or enhance or augment that. You should be doing that right now.”
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