Commentary

The 'Internet of Things' Will Reshape Advertising Agencies

The Beginning of Things

There are two important drivers of the next evolution of the Internet, known as the Internet of Things. First, changes in consumer behavior and the broad adoption of mobile devices are dramatically changing how (and how much) people consume and create Internet content. Second is a massive proliferation of devices connected to the Internet. These include everything from smartphones, fitness wearables, and thermostats to cars. Where consumer behavior and connected devices intersect is the crux of the opportunity that exists for advertisers. To make sense of this intersection we must consider two key areas: the data created by connected devices and the design of services that use that data to create utility for consumers.

The Biggest Data

The backdrop of any discussion on the Internet of Things has to involve data. Not just the pile of photos and videos from your fancy new smartphone (which would be plenty on its own), but really Big Data. We’re talking about the constant chatter from a new ecosystem of connected devices that Cisco estimates will number 50 billion by the year 2020. These devices are busy quantifying everything from the number of steps you take, to the average speed and fuel consumption of your vehicle, and everything else you could probably imagine in real-time.

Having all this technology and data may seem like a great thing for an advertiser, but it's not so easy to act on it at the moment. For the reality of things, let’s imagine Jawbone captures data that you pumped out 50 dumbbell curls at the gym. They now know where and how long you were working out. As an advertiser this is a perfect trigger to hit that consumer with a communication for your workout recovery drink, but at the moment there's no media vehicle to deliver that communication, nor can you access the community of Jawbone devices readily. We still lack connectedness across devices that lead to the type of services and addressable audiences that would drive media dollars. The next great frontier in the Internet of Things squarely addresses this issue. Even though we’re adding billions of connected devices yearly, those devices are more or less coalescing around their own proprietary ecosystems. They are not yet open to third-party application developers or media companies. So at the moment, if you want to play in this space as an advertiser, you’ll need to invest in one-off partnerships or create your own connected device ecosystem. For the Internet of Things to truly take shape there must be a standard of interoperability between connected devices. For the reality of things, until the Nest Thermostat can talk to the U-Connect service in your car, we’re barely scratching the surface of what’s possible for advertisers. But advertisers will have to do much more than just use data to trigger a communication.

Services Will Drive the Next Wave of Value

The bar for an advertisement in the world of the Internet of Things will be much higher than it is today. Advertising will have to deliver a value to the consumer that matches (or exceeds) what the consumer’s context is worth to the advertiser. Who do you know who wants to have their workout interrupted by an ad to save money on a recovery shake? If you don’t think this is real, then take a look at the pushback content platforms are receiving on their attempts at native advertising.

This means advertisers will have to stop making ads, and move toward designing services that create consumer value on behalf of their brands. The result will be designing for key moments of truth where consumer behaviors and connected devices intersect.

Instead of trying to sell someone a recovery shake, try analyzing their data to provide them with information that will help optimize their workouts. The consumer will gladly trade this benefit for a recovery shake later. And this experience will do way more to bring the promise of the brand to life for the consumer.

The End of Things

To take full advantage of these opportunities, advertisers need to take stock of their ability to create and distribute compelling content for the Internet of Things, beginning with redefining what an advertisement is. We’ll need to think more like product designers and technologists by incorporating the user experience into the creative process to create brand narratives that can persist in the overlap between devices and human behavior.

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4 comments about "The 'Internet of Things' Will Reshape Advertising Agencies".
  1. Brad Michaelson from Brand Canyon at Runway 21 Studios , March 29, 2014 at 1:46 p.m.
    This information is spot-on and I think any agency professional who's been paying attention knows it to be true. What's ironic is that many ad agencies, experts in the art and science of communications, are having a hell of a time getting their clients to understand it.
  2. Thorsten Linz from FCB Chicago , March 29, 2014 at 10 p.m.
    Thank you for the great article. I could not agree more. One of the biggest problems in our fast pacing technology driven world is that many brands and advertisers are still stuck in their advertising driven value proposition. The world has changed and with so many devices and platforms brands need to start offering a clear value proposition to their customers. The future of "advertising" will be defined by brand experiences that resonate with consumers. Brand preferences and loyalty will be determined by how brands understand to use technology and platforms to reach out to their customers.
  3. Justin Smith from Doner , April 1, 2014 at 3:13 p.m.
    Thank you for the great comments.
  4. seo pk from N/A , July 9, 2014 at 4:31 a.m.
    nice post about advertising agencies for read my post about advertising agencies in Pakistan then please visit at http://advertising-in-pakistan.blogspot.com/2014/07/about-advertising-agencies-in-pakistan.html