The belief that the world is moving towards an Internet of Things has never been stronger.

The IAB’s recent Mobile Engage was entirely focused on this idea of the connected future. However, brands should be cautious of advertising on the so-called IoT.

While mobile internet usage goes from strength to strength, brands would do well to approach advertising through non-smartphone connected devices with caution, be it the fridge that submits your grocery list, the car you’re busy driving, or indeed, the toaster that sings to you. 

As somebody who specialises in digital advertising intelligence this may seem an apprehensive attitude to take, but there are four key reasons why brands should be cautious of advertising on the Internet of Things (IoT).

1. IoT probably has limited direct advertising applications

My sense is that there are many advertising technology companies and digital media buying agencies desperately hoping that IoT is a large-scale advertising opportunity (and that Facebook and Google won’t dominate that too).

The chart below, from research on the future of wearable devices launched by Mindshare at Mobile Engage, provides a useful framework to think about this – notably the two viable options in which advertising happens on a connected device.

Push notifications promise the Earth but in advertiser terms aren’t they often just a euphemism for “let’s send some coupons”?

Are we in danger of unlearning the lessons of a few years ago about how coupons attract deal hunters more than they attract prospective repeat customers? How receptive will users be to offers direct to their most personal devices? 

Paid search on IoT devices, meanwhile, is challenging because of the interface. You’re more likely to input the search term by voice rather than typing and it will probably only meet immediate needs (e.g. weather, transport, food & drink).

Plus there’s only room for one result. All rather limited.

2. IoT is for opt-in utility or entertainment, not pushed advertising

Unilever’s Global SVP of Marketing, Marc Mathieu, says this best: 

We need to think about how we build utility to people – the audience is not listening to 'I have something important to say to you' anymore – we need to provide value. Brands need to bring something useful and entertaining to the table for their consumers.

Urban Airship suggest an “un-advertising” mind-set that requires brands to be invited in to provide utility rather than interrupting, and to identify the 'moments that matter' not the reach and frequency.

3. There’s danger in the data

Right now it all seems suspiciously quiet on the IoT privacy debate front, with no storm compared, for example, to the deep packet inspection issue in 2008 around ISP’s collecting people’s web-surfing behaviour or the Wall Street Journal’s “What They Know” series in 2010. 

Surely the industry will increasingly sail close to the wind on privacy with IoT as it becomes more commonplace.

Who remembers the brouhaha in 2011, when the sexual activity, including duration and intensity, of 200 owners of Fitbit exercise sensors showed up in Google Search results?

Also, the value exchange for user data within the IoT must be transparent and relevant but psychologist Dr Simon Hampton pointed out a trickier, more subtle, element to IoT data.

For example, our fridge could use data to say things about ourselves we may not like. People are extremely careful about the photos they share in social feeds on the food they eat and sporting activity, so what happens when the smart fridge tells them what they really ate and their wearable tells them how many steps they really took? 

4. The future’s more likely to be mobile than static 

On a simply practical and ‘bottom-line’ level, advertisers are better off focusing their attention and resources on mobile as its increasingly the computing platform of choice – and it’s more, ermm…mobile.

Aside from wearables or smart car sensors, IoT tends to be a more static platform so doesn’t provide the degree of opportunities or applications compared to a device that literally goes with people everywhere.

Furthermore, the advertising future of IoT, in the medium term at least, is still uncertain, whilst the industry is becoming better at harnessing the ad opportunities on mobile.

The latter will take on an extra dimension when the issue of mobile as a payment device is sorted. The conventional wisdom of the last few years is that customer journeys increasingly start on the smartphone but, because the purchase experience is so painful, they end on the desktop (hence the rush to develop cross device propositions). 

This does look encouraging – particularly if the exponential growth of mobile commerce in South Korea, one of the world’s most developed mobile markets, translates around the world. When (not if) smartphones get wide adoption as contactless payment cards then everything changes. 

A connected future undoubtedly holds huge potential for technology providers and brands alike. But for the latter, it is the opportunity to build social utility in the hearts and minds of audiences – rather than an archaic approach to traditional push advertising – that must really be explored if IoT is to be harnessed to its full potential. 

Andy Hobsbawm will be discussing the Internet of Things at next week's Future of Digital Marketing event. 

Doug Conely

Published 3 June, 2015 by Doug Conely

Doug Conely is Chief Strategy Officer at Exponential and a contributor to Econsultancy. 

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Comments (2)

Pete Austin

Pete Austin, Founder and Author at Fresh Relevance

Where's the killer application? People have been talking about connected fridges for 20 years.

And where's the ROI? I get that beacons are potentially useful to personalize marketing in real-time, but the volume of transactional data they generate is much less than from a tracking script on a Website, while the cost is much greater.

about 3 years ago

Doug Conely

Doug Conely, Chief Strategy Officer at Exponential

Hi Pete. I'm with you. What is the ROI or killer application for advertising with IoT? It's too personal and limited to show ads on and the data is also very personal. But if people buy a connected product that has opt-in services powered by data that make their lives a little better that's great - but it's not advertising.

about 3 years ago

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