Wearable technology is poised for exponential growth over the next three years, but the value of this technology to marketers will depend heavily on the rules for how the data will be gathered and used.
It’s inevitable that marketers are going to use this data, because it creates even more depth of understanding about their customers. From activity trackers to digital watches, the volume and scope of what will be available is intriguing. This data is even more personal than what people do on the Web because it relates to personal health, which may already fall under some governmental regulation
As this is a burgeoning area, industry groups are not yet ready to tackle the topic , but I thought I’d propose some ideas for how data from wearable tech could, and should, be utilized.
I think the industry should only use first- or second-party data and no third-party data should be made available, unless potentially aggregated in larger groups and unable to be broken down to individuals.
First-party data gathered from the company owning the device is absolutely fair use and should be harnessed for speaking to and building a relationship with the customer. After all, when someone straps on a Fitbit, they are specifically looking to find ways to better themselves, so Fitbit has a right to engage with customers by suggesting ways to help them achieve their goals. That use of first-party data creates a more loyal customer, as it would in any other category such as CPG or financial services.
Over time, if the customer sticks with that wearable tech and maybe expands to other devices, the cross-channel implications are mind-boggling. For example, it’s rumored the next version of iOS will be an iHealth app that tracks primary physical activity using the phone. If that can be crossed with browser data or any other aspects of the Apple product set, Apple can provide a very customized experience, potentially including targeted infomercial content when it delivers its TV product, or even creating a health channel on the current Apple TV platform.
Second-party data is also a natural place to foresee growth. Second-party refers to two companies, both of whom have a direct relationship with their customers, engaging in a private network to share their first-party data for use only in co-marketing and targeting opportunities. This second-party use of first-party data is protected by most privacy policies and is commonly used throughout marketing already, so the implied permission is established and accepted by consumers. As a use case here, you can foresee a hotel chain working with Nike to offer special travel packages for visitors with an interest in health, which could include special running packages, healthy meal options and more. This would be very interesting to business travelers looking to stay fit while on the road for work.
The thing about third-party data is that it must first be gathered, then classified, then put to use. Third-party data related to health might be helpful from a categorical perspective because it could group users into large aggregations of healthy vs. passive, etc., but it might not be that useful due to the issue of recency. For example, someone who exercises regularly may have to take a break because they get sick, etc. Or they may simply fall out of routine. So beyond the issue of privacy, the issue of accuracy over time plays into things.
As wearable tech continues to become a category of interest for marketers, we’re going to have to craft the rules for how the data can be used, ensuring consumer comfort with these devices.
Where do you think the category is headed?