Is your data strategy IoT-ready?

 

By Peter Roper, Editor, Marketing Mag

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By 2020, a trillion devices are predicted to join the connected world, along with trillions of dollars to the global economy. For marketers, developing a data strategy that plays well in the internet of things is an opportunity  for new insights, new revenue streams and even new markets.

A future of smart homes, connected workplaces, industrial internet and wearable devices – and of targeted, relevant data-driven marketing – isn’t far away, but brands are going to have to put in the hard yards to win.

Examples of connected innovation grow more impressive, and more numerous, almost, it seems, by the day. Pacemakers have evolved from units with a battery life of three hours to devices that feed back to cardiac specialists wirelessly, negating the need for in-person check-ups and warning of potential cardiac arrest. GE has partnered with AT&T to connect entire jet engines, allowing employees to remotely monitor, diagnose and resolve issues. Even cows have been connected to the web, helping farmers optimise the health and yield of their herds.

As costs lower, components shrink and networks proliferate, the ability to connect screens, products, wearables, homes, workplaces, vehicles, cities and even bodies to the internet becomes a growing reality. This vision of a connected world – the ‘Internet of Things’ (IoT) – has the potential to change the way we live and work, and bring disruptive change to many industries. For marketers, it’s the next evolution of targeting and automation, an opportunity and a challenge.

Visions of a space-age future have been dreamed up time and again by science fiction writers, casting an unbelievable, and sometimes frightening, picture of aerocars, super robots and intelligent machines. Many of these fantasies may never be realised, but behind the growth of connected devices are a set of factors sure to drive its adoption far and wide.

There is value for both consumer and commerce in connecting devices. For the consumer, smart objects outperform their dumb predecessors, making life more enjoyable and more convenient. For business, the value of the data they provide is becoming crucial to their ability to best serve customer needs, and retain competitive advantage.

These forces combined are driving the miniaturisation and sophistication of the components necessary to connect almost everything, as well as the availability and speed of wireless internet to make IoT fly.

Analysts estimate up to a trillion devices will be connected by 2020 (McKinsey believes nine billion currently are), adding anywhere from US$2.7 to $6.2 trillion to the global economy. Frost & Sullivan forecasts total Asia Pacific spending on IoT to be US$9.96 billion in 2014 and continue to grow at a CAGR of 34 percent to reach US$57.96 billion by 2020.

A future of smart homes, connected workplaces, industrial internet and wearable devices – and of targeted, relevant data-driven marketing – isn’t far away, even if you won’t be dropping the kids off at Orbit High in the aerocar any time soon.

The IoT will be a great enabler for the building of digital bridges between businesses and consumers. It’s a value outcome for both parties – convenience and experience for the consumer, and an opportunity to re-engage for the brand. Bridges will give businesses access to genuine insights into their customers’ behaviour, wants and needs, as long as they treat that information with respect and trust.

However, many organisations are still dealing with the pain of managing their current data strategies, let alone a whole new wave of insights. Up until now data has come primarily from the customer – loyalty schemes, web browsing behaviour, profiles and so on. With connected devices, the data comes directly from the product itself.

Connected objects bring a new level of fact in organisations that didn’t previously exist: a new set of triggers based on real usage rather than perceived usage, mindset or customer journey.

Until now, communication hasn’t been triggered by the product itself but from the customer. Preparedness for an added layer of data varies by industry, but is generally low. One marketer we spoke to said many organisations are still getting their heads around ‘standard internet’.

Experts estimate that over half of all big data projects fail, primarily at the data ingestion phase. Most data centres are woefully unprepared for the amount of data heading their way. Cloud-sceptic organisations are going to find themselves overwhelmed.

Creating a collaborative team equipped with data technology skills and knowledge of the business is key. For most this will mean combining internal and external resources. The massive compute required to churn through large, less frequent tasks can be outsourced to the cloud.

Outsource heavy tasks to subscription-based hardware and software vendors. Once you’re done, stop paying for them.

The next challenge is turning the data into insights. The key to this isn’t about going back to university, but more about bringing people into the process that can identify common patterns and turn it into something the marketing team can use.

The magic, it seems, is destined to occur when data is brought in from outside the organisation and normalises with in-house data to turn it into a completely different set of insights about the customer.

FREE DOWNLOAD: For a limited time, Marketing Mag is making its premium report ‘The Marketer’s  Guide to the Internet of Things’ free to download for readers of this website. Click here to get your copy.

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