Marketing, data and privacy in the Internet of Things

Constraints on marketing and product innovation

Data – Internet of ThingsImage credit: luckey_sun

The mushrooming of connected devices means that in the Internet of Things the growth of data will be vast. This will include real-time sales data collected at SKU level, precise inventory tracking in real time, detailed customer relationship histories, technical product information and an increasing variety of behavioural use statistics. How can digital marketers make optimal use of this information?

In theory, this data could revolutionise how products and services are targeted: e.g. at the moment your washing machine springs a leak an insurance company sends a text about its warranty products. In practice however data will be surrounded by proprietary walls, as can be seen in Nike’s community of fitness app users. Though these data sets may be invaluable to marketers they are unlikely to be made available outside the company.

Consumers and their buying power will be the force demanding that privacy remains intact. The cross-selling of services will therefore depend on the creation of partnerships between service providers that satisfy the consumer’s need for trust. This concern will also impact the potential for innovative product relationships; such as the manufacturer that made your shirt, the restaurant that selected the ingredients for the food you spilled on it and the dry-cleaner tasked with cleaning it up. In practice what is feasible for business will be limited by what is acceptable to the consumer.

Marketing and perceived value to the consumer

The idea that an individual’s data has value is already understood by many consumers. When this is combined with reticence over a Big Brother society we can see that the mountains of data that will be created may remain locked from many marketers. The key to consumers releasing data is their perceived value of owning the product. And not all uses that manufacturers dream up will create enough value to attract consumers, such as the Porkfolio piggy bank.

Data aggregation and anonymity

The practical answer for most marketers lies in data aggregation and the promise of anonymity, for which consumers are more likely to give third party consent. This is the only way that companies monitoring and storing data can release it with minimal end-user approval. Such data will lack the capability to target specific individuals but real-time market and societal trends will still provide insights more invaluable than anything available today.

Marketers will have access to two levels of data – a deep fund of micro details springing from the company’s own userbase and alongside that public information describing broad market and societal trends. Both types of data have the capacity to throw up inspiring innovations, for product designers and digital marketers alike.

In the Internet of Things, the key factor in the success of a product will be its use of data; and access to that data will be limited by the perceived value to the consumer, not the technical capabilities of the business.

The Internet of Things is one of the key 15 digital trends for your business to ride in 2015 (infographic). Take a look at the other predictions and explore how you can apply them to your business.


Marketing, data and privacy in the Internet of Things
Marketing, data and privacy in the Internet of Things
Marketing may have vast amounts of data at its disposal but in the IoT it's the consumer's need for privacy that will control how it's used.

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