I caught up with Andy today to talk about the Internet of Things and how it is changing the world of digital marketing.
You talked about the Internet of Things at FODM back in 2011. How has the technology changed since then?
The Internet of Things has become a real thing.
In a recent report by the Economist Intelligence Unit, IoT was the top trend that senior marketers worldwide believe will have the biggest impact on marketing by 2020 (followed by a cluster of technology trends that are all intimately related to IoT, such as real-time mobile personalized transactions, customer experience and big data).
I doubt there’s a CTO and CIO who isn’t working out their IoT strategy from a technology infrastructure point of view, whether in the industrial or consumer product manufacturing industries.
People are now beginning to take the sheer scalability challenges of IoT seriously. Consider that a million connected devices sending an update two times per second creates the equivalent of 333 times the number of tweets per second Twitter has to deal with. Then consider that Cisco forecasts 50bn such devices by 2020.
The potential damage to brand and customer relationships if companies get the technology piece wrong is significant. No brand wants to be sending out “unplanned interruption of service” apologies, asking for customer patience while their IoT controlled product (a remote door lock say) comes back online, like some emails we’ve seen recently.
Delivering semantically structured, real-time data streams to and from billions of devices, to drive applications with individual user permissions and access controls, without compromising availability, performance and security is a non-trival ‘big data’ problem to solve.
We envisioned this kind of connected world from the start and conceived and architected EVRYTHNG from the cloud-down, so to speak, to handle exactly these kinds of uses cases and deliver exactly this kind of real-time smart product service at scale.
How has EVRYTHNG developed in the last four years? In an interview back in 2011, you made a few predictions…
We predicted that there would be a dramatic increase in the number of things online sharing information in real-time as connectivity costs fell, and that’s exactly what’s happened.
However new smart packaging technologies like printed electronics and sensors are rapidly changing the economics of connecting objects to the internet.
This means that vast numbers of everyday non-electronic household products can be given dynamic, social web intelligence via smart tags in combination with smart software and smartphones.
By our research there are 3.3tn consumer products made and sold each year (some estimates are as high as 10tn) so this is a massive increase in the scale of ‘things’ that are becoming part of the Internet of Things.
As a result, EVRYTHNG has grown considerably over the last 12 months, working with global consumer product brands including Diageo, Mondelez, Unilever and iHome among others. To accommodate the demand, we now have offices in London, New York, San Francisco, and Seoul.
We’ve also expanded our platform and go-to-market partnerships, with companies like chip manufacturer Marvell in embedded systems for appliances and consumer electronics, Avery Dennison and ThinFilm Electronics for smart packaging technologies and Trueffect to link what we call ‘First Product Data’ from connected devices and packaging tags to first party advertising data so marketers can also use product interaction analytics to segment and retarget consumers on the Web in real-time.
What are the privacy and security issues around the Internet of Things and how can they be solved?
Security, of course, is intrinsically linked to data privacy: the former protecting the latter.
A recent FTC report on ‘Privacy & Security in a Connected World’ cited a lack of trust in IoT security and privacy as the biggest barrier preventing widespread consumer adoption.
The IoT involves a complex mesh of people, devices, systems and network connections, as well as different locations where data is stored or transported so it’s essential that each part of the system can only access, manage or share data that it’s allowed to.
This requires multi-level security and privacy controls and policies built into the core architecture of the platform.
With EVRYTHNG, for example, each product layer in the ecosystem has encrypted keys (or passwords) to identify itself and is governed by granular, customizable policies which define the data that specific component can see or manipulate. Our IoT platform polices every step and exchange.
This lets a customer like iHome make smart products for the connected home build in customizable granular rules showing exactly who can do what in every part of the connected system. So if you pop round to your neighbour’s house to borrow a cup of sugar, you won’t be able to detect her devices on your smartphone, as you don’t have permissions or the secure keys required.
What are some of the best uses of Internet of Things technology?
We see broadly three main use cases for IoT technology in consumer products:
Firstly, turning products into data-driven, owned interactive media.
Once digitally activated, products become a platform for content, experiences and direct digital relationships with consumers.
For instance, scanning products to access information that helps you get the most out of using it: tips and how-tos, or recipe information for food and drink, and so on.
A new generation of company is taking a leadership role in this way by digitizing products to acquire and manage direct 1:2:1 customer relationships
Secondly, the concept of Products-as-a-Service.
Physical products that come with a digital layer of personalized interactive services can talk directly to consumers and back to brand, personalizing to their preferences and self-improving over time as new digital services are added.
Smart products are harder to switch from and can generate more ongoing service revenue than the original purchase.
Finally, the concept of ‘ecosystem-connected products’.
This is where a product uses digital connectivity to move from isolation to ecosystems, creating new value by combining with partner products, apps and data services.
The more ecosystem connections your product makes, the more value it creates. Think of connecting a premium Spotify account to seamlessly stream playlists in your next Uber ride, or Jawbone syncing with Amex for contactless payment via your fitness tracker.
How is it being used for customer service?
When brands understand how a product is actually being used, they can deliver a better service experience using the product as an interface for data-driven support.
Faults with the product can be detected and even remedied before the customer notices them, and product upgrades can be automatically delivered.
Tesla famously updated 29,000 Model S cars instantly to solve a service issue with electrical power fluctuations – the product essentially self-diagnosed a problem and fixed itself.
In addition, complex event processing and streaming analytics software can detect poor user experiences, enabling brands to offer proactive customer service.
As an example, a customer who presses the start button of a new device five times in a row, indicating they’re having trouble operating the device, could be offered a real- time support chat or an instructional video via their mobile device or a screen on the product itself in some cases.
In a simpler scenario, the Oral-B PRO 7000 connected toothbrush already tells users when they need to change their brush head as well as letting them know how effectively they are brushing their teeth.
Do you think marketers and brands are using IoT effectively or do they need to do a lot better?
People expect brands to play a useful, relevant and meaningful role in their lives and the media they consume is increasingly mobile, social and powered by real-time data.
In spite of this, many marketers still default to delivering advertising messages in a regular sequence of campaigns, instead of providing ‘on-demand’ meaningful services and experiences that are personalized to each user.
Brands need to take a fully connected approach to their business, with buy-in at board level so that ‘always on’ connectivity becomes part of the company culture.
IoT platforms for growth like EVRYTHNG need to become a new layer in the enterprise technology stack, enabling real time purchasing and behavioral data through product engagement to create opportunities for cross/upsell and efficiencies in inventory and supply chain management.
The data gathered is presumably very useful for marketers. Can you give us examples of the kind of data IoT provides and how that would be useful to marketers?
The IoT allows brands to collect permission-based real-time data about how, when, and where consumers use their products.
They can track product identity, location and usage from factory floor to high street to living room and recycling back into component materials.
Manufacturer information from the supply chain perspective (when and where an item was made, color, size, model, where distributed to, etc.) can be combined with retailer POS data (when and where sold, by whom, at what price, to whom, with what other products).
Consumer usage data for say a smart clothing product could be tracking distances and places travelled, what speed, and linking data to other wearables for heart rate and BMI etc.
This allows brands or third party companies to offer tailored services using all or any of the above data: product owner, their profile and habits, fitness activity, health activity, holiday destinations, when worn, when discarded.
All actors in the process can contribute to the creation of data around the item, and everyone, including most importantly the end-user, can benefit from it.
What are the future opportunities for digital marketing and the Internet of Things?
We are moving into the ‘third age of marketing’, a shift from media-driven brand voice, to social media-powered consumer voice, to IoT-enabled product voice. This is where the product itself – as a dynamic, web-connected intelligent object – plays an active, functional part in manufacturing, retail and end-consumer use.
Product data talks back to the brand with real-time analytics, letting them know who their customers are, where they are, what they engage with, how interaction drives sales.
Increased availability of printed electronics in packaging combined with real-time cloud software will enable countless non-electronic products to become interactive and trackable – significantly widening the scope of the IoT.
As more products become owned interactive media, service delivery interfaces, and fully connected to the ecosystem of other products apps and services in people’s digital lives, marketers will be able to use them to get closer to customers, deliver highly personalised experiences and build longer-lasting consumer-product relationships like never before.