The potential of the Internet of Things (IoT) is obviously tremendous and some companies have already recognized that it is becoming a part of everyday life at a tearing pace. But there are still others that do not know what to associate with the term nor the variant "Industry 4.0", which describes in particular the developments in the B2B sector. Although the connected devices give us an insight into how we will use the Internet in 10 or 20 years.
What’s clearly missing, however, are the right business approaches and models. That’s alarming, considering that in 2020 more than 26 billion ‘connected things’ will dominate our daily lives. If we believe the experts, in 2035 the number is even going up to 200 billion networked objects. According to Gartner, the Internet of Things will already have generated an added value of 1.9 billion US dollars across all industries in the next five years and by 2025, the total economic potential is even expected to be up to 7 billion euros.
How objects become intelligent
But what does IoT mean in the first place? It refers to objects that are connected via an IP address to the Internet, exchanging information or sending data that way. The term was coined already in 1999 by technology pioneers at the renowned Massachusetts Institute of Technology (MIT). The original vision was that devices should be able to gather information independently of human beings and the group identified as important features of the Internet of Things three basic characteristics: The device has to have sensors, be connected to the Internet, and allow interaction and remote control capability.
Via a variety of sensors, data of all kind can be determined, connecting this way the online with the offline world and generating a new ‘connected everywhere ecosystem’. For consumers and users, this development has enormous advantages and numerous forms of relief in store. Especially for marketing, the disruptive development provides new opportunities of targeting that isn’t yet rudimentary outbid.
Challenges are at the same time opportunities for companies
For sure, connected devices are the next big bang - be it a networked tumble-dryer, intelligent sports socks or self-regulating thermostats – as a lot is already possible with the Internet of Things, but far from everything that is still to come. The Internet, as we know it so far, just changed in its fundamentals. Just look at industries that use the Internet of Things already in various forms, such as:
• Automotive Industry: Connected Cars
• Health: Fitness Tracker
• Supply industry: Smart Home
• Logistics: Package tracking and shipping drones
• Trade: iBeacon
• Entertainment: Smart TV, etc.
Subject to the condition that the linking of items is well implemented, a brand can enhance its status enormously by having a constant contact to the consumer who uses the “things” in a natural environment. That way, more data on the customer can be collected which provides more insights. Companies have the opportunity to analyze habits, preferences and intentions of their customers with much more detail.
The University of St. Gallen names marginal cost minimization, increased user integration, better contact frequency and an efficient use of data as the most important economic factors of the Internet of Things movement. Hence, marketing in the Internet of Things must be understood as a service to the user. For instance, in order to get a full and complete picture of the customer, data from social networks can be taken into consideration for targeting support and relevant messaging. But since IoT is as diverse as the Internet itself, and the user behavior varies with the technology that’s on the market, it won’t be easy to keep up with the times and to find the right IoT product that gives your customers real added value.
By Daniela La Marca