One of the bigger themes that popped up across each of these stages was Internet of Things (IoT). It’s something that we’ve written about at Econsultancy before but what’s clear is that the Internet of Things is very much just getting started.
Econsultancy’s Marketer’s Guide to the Internet of Things defines IoT as “the connection of physical objects to the internet and thereby to each other and the environment. It promises the potential of a more frictionless world where many decisions and actions are automated to make our lives better and easier.
“To enable this to happen, electronics and software are included in an object giving it an ability to network and communicate with other devices. This holds out the possibility of that object offering enhanced value and service.”
While IoT may still seem like an ‘out there’ trend that takes up space in marketing and technology publications, the reality is that it will eventually transform entire industries as well as how we live our everyday lives.
Consider that connected products can offer opportunities for greater reliability, higher utilisation and new functionality which cuts across traditional product or industry boundaries forcing companies to rethink nearly everything they do.
On the Creatiff (design) stage Harry West, CEO of design and strategy firm Frog, discussed how General Electric has moved from a product business to a service business.
Instead of building products for transactional client relationships, GE has moved to designing systems in a closely integrated way with clients.
This means that GE doesn’t just make money from selling engines. It can also make money on services. In doing so, the company extends the relationship it has with clients which in turn raises the barriers to entry for competitors.
This has been enabled by connected physical components with sensors that enable communication between the product and the product cloud.
But the Internet of Things isn’t just something that huge corporations like GE need to think about or can utilise.
According to Bracken Darrell, CEO of Swiss personal computer and tablet accessory firm Logitech, “sensors, storage and micro processing are almost free now.”
He’s right. Breakthroughs in the cost of sensors, processing power via the cloud and availability of bandwidth are enabling ubiquitous connectivity.
Connected or ‘smart’ products like the activity trackers, learning thermostats like Nest and Amazon’s artificial intelligence voice-controlled Echo speaker are gaining traction.
Internet of Things and marketing
While IoT is perhaps most associated with operational benefits such as improved logistics and maintenance witnessed at GE, there are numerous other applications for marketing.
IoT provides real-time, contextualised data that can come from many touchpoints over a period of time. This provides a range of exciting marketing possibilities such as selling existing products and services more effectively, delivering truly personalised customer experiences and potentially creating new products and services.
Due to the number of industries which will be affected by IoT, marketers need to be aware of how it may impact the structure of their own sector.
Some commentators suggest that IoT is emerging as the third wave in the development and transformation of the internet.
The first wave being in the 1990s when personal computers connected people to the internet and the second wave in the 21st century as mobile bypassed PCs and connected billions of people throughout the world to the internet.
According to Gartner, there will be nearly 26bn things connected to the internet by 2020. Cisco says there will be 50bn. Intel predicts the number to be more like 200bn.
These are mind-blowing estimates from companies developing and selling sensors and IoT related products and services. Whilst these numbers may be fuelling the media frenzy, they are still something for marketers to be aware of.
Just this week, Samsung announced the $8bn acquisition of Harman International Industries to expand into high-end car audio and connected automobiles.
In its press release, Samsung said: ”Harman perfectly complements Samsung in terms of technologies, products and solutions, and joining forces is a natural extension of the automotive strategy we have been pursuing for some time.”
Vice-chairman Kwon Oh-hyun said in the statement: “Harman immediately establishes a strong foundation for Samsung to grow our automotive platform.”
The connection of everyday objects (in this case automobiles) and appliances to the internet is increasingly becoming woven into the fabric of everyday life.
It will be interesting to see how Samsung can extend its relationships with consumers beyond smartphones to more ubiquitous connectivity via televisions and automobiles.
Internet of Everything
Some commentators prefer to use the term ‘internet of everything’ rather than ‘internet of things’. This makes sense considering we are talking about everything.
While we are still in the early days of IoT, that doesn’t mean that we can put this to the back of our minds.
Consider car ride service Uber. This has something to do with IoT. Each driver and passenger carries a device with a GPS tracker which enables the entire Uber ecosystem. In the space of a few years this ecosystem has completely changed the 400-year-old traditional carriage and taxi system.
With that in mind, what could IoT mean for you, your business and your industry?
I attended 25 talks over seven stages at Web Summit. Internet of Things came up in came up in at least a third of these talks. Marketers take note.
Econsultancy has published a number of blogs about the Internet of Things as well as these reports: