IoT is a vast network of interconnected devices, each equipped with sensors and software to collect and exchange data over the Internet. This concept has changed our daily lives, transforming everything from home appliances to industrial machinery.
Now, it is shaking up the world of marketing. IoT marketing leverages these connected devices to create smarter, more personalised marketing strategies.
It is pushing boundaries and ushering in a new era where data, connectivity and user experience reign supreme. For marketers ready to adapt and innovate, the opportunities are limitless, so let’s take a look at what IoT looks like in marketing today.
What is IoT marketing?
IoT marketing is a modern approach that leverages the connectivity of IoT devices to gather real-time consumer data – enabling brands to develop more personalised and targeted marketing strategies. These strategies often include dynamic pricing, customised offers and real-time customer engagement.
In the context of modern marketing, IoT plays a transformative role. In fact, it offers a level of insight and accessibility to consumer data that was previously unimaginable. A recent report from Accenture found that 64% of consumers wish companies would respond faster to meet their changing needs.
Now, marketers can analyse behaviours and preferences down to the minute detail, ultimately fine-tuning their approaches to align with individual consumer needs. This forms the foundation of precision marketing, a strategy that focuses on delivering the right message to the right person at the right time.
Traditional marketing, in contrast, followed a one-size-fits-all model, often based on broad demographic information and trends. However, IoT marketing has turned this concept on its head. Now, the focus is on the individual consumer.
By understanding consumer habits and preferences through the lens of IoT data, marketers can tailor their messaging and campaigns to meet specific consumer needs and wants. This results in a more engaging and effective marketing strategy, redefining what marketing can achieve in an interconnected world.
Key components of IoT marketing
IoT marketing is anchored on several key components.
Interconnected devices and sensors
These can range from smartphones and smartwatches to smart appliances and wearable technology. Each device is capable of transmitting data about its use, opening up vast insights about consumer behaviour and preferences.
Personalisation and marketing
Armed with detailed insights about individual consumers, marketers can create highly tailored campaigns. They can customise messages based on factors such as the consumer’s browsing history, purchase habits, location or even the time of day. This level of personalisation is key to increasing engagement and conversion rates.
It is also worth noting how artificial intelligence (AI) automation is enhancing these capabilities. In fact, McKinsey Global Institute forecasts that by 2030, AI could add about $13 trillion to the global economy and boost global GDP by up to 26%. Therefore, IoT and AI have extensive potential to collaborate in the field of marketing.
Real-time data and analytics
IoT devices generate large amounts of data, and advanced analytical tools can process this information to identify patterns, trends and correlations. It is the real-time, ongoing data analysis that enables marketers to respond promptly to shifting consumer behaviours and market dynamics.
Customer interaction and engagement
IoT devices can deliver push notifications, personalised offers, or product recommendations directly to the consumer. This creates a sense of intimacy and connection between the brand and the consumer, enhancing the overall customer experience.
The benefits of IoT marketing
IoT marketing presents several substantial benefits. One of the most notable is an enhanced customer experience. For example, a smart home device may learn a user’s preferred room temperature and adjust it accordingly, which a utility company can then leverage to offer personalised energy-saving tips. By implementing hyper-personalised marketing, brands can significantly improve the customer’s experience.
Additionally, IoT marketing can dramatically improve marketing efficiency and effectiveness. For instance, a retail brand can use IoT sensors to track in-store foot traffic and shopper behaviour. This allows them to optimise the store’s layout, product placement and staffing schedules for peak times. As a result of this tactic, companies can significantly increase their sales.
Another advantage is the ability for real-time decision-making and predictive marketing. A coffee shop chain could use IoT-enabled coffee machines that track consumption patterns. In turn, the coffee shop can predict when customers may be ready for a refill and send timely, personalised offers to their mobile app.
Finally, IoT marketing allows for greater consumer insight and understanding. Fitness wearables, for example, provide detailed data on a user’s exercise habits and health indicators. This data can be useful for health and wellness brands to offer customised workout plans or dietary advice – making their services more valuable to the individual user.
Real-world applications of IoT in marketing
Several real-world examples demonstrate the profound impact of IoT in marketing.
Amazon’s Dash Buttons serve as a prominent example. Customers could use these IoT devices to reorder specific products with a simple press of a button. The device tracked usage patterns and sent data to Amazon, allowing the company to optimise its supply chain, marketing messages and customer service.
Companies like Tesla in the automotive industry are revolutionising their marketing using IoT. Tesla cars, connected to the Internet, continuously send data back to the company. This information helps Tesla understand how customers use their vehicles, informing product development, customer service and marketing strategies.
Smart home devices, such as Google Nest, represent another application of IoT in marketing. Nest collects data on user habits and preferences, allowing Google to personalise its marketing across multiple channels. It also opens opportunities for partnerships with other businesses, offering tailored services based on the collected data.
With these applications in mind, IoT allows marketers to create dynamic, responsive and personalised marketing strategies.
What the future holds for IoT marketing
The future of IoT marketing is promising, with emerging trends set to shape its evolution. For instance, voice-activated search via smart speakers is expected to drive new SEO strategies, focusing more on natural language queries. In fact, the global voice recognition market is projected to grow from around 10 billion U.S. dollars in 2020 to nearly 50 billion U.S. dollars in 2029, indicating a compound annual growth rate (CAGR) of 23.7%.
The rise of 5G technology will also bolster IoT’s impact, enabling faster, more efficient data transfer and analysis. Additionally, artificial intelligence and machine learning will be pivotal in IoT marketing as they continue to advance. These technologies can process the vast amounts of data IoT devices generate, providing further insights and more accurate predictions.
For instance, AI could analyse purchase patterns and predict when a consumer might need a product refill, triggering a perfectly timed promotional message. This blend of IoT, AI and machine learning is bound to transform marketing in ways that make it better for brands and consumers.
IoT’s indispensable role in marketing
The Internet of Things has profoundly impacted marketing that is fundamentally reshaping strategies and outcomes. It has transformed how brands collect data, engage with customers, and adapt their marketing tactics in real-time. IoT marketing has also enabled hyper-personalised marketing that simply wasn’t possible before.
Looking ahead, it is clear that IoT will only continue to grow. As AI and machine learning advance, their integration with IoT promises even more sophisticated marketing strategies. For businesses to remain competitive, embracing the potential of IoT in their marketing efforts is a necessity.
Eleanor Hecks is the managing editor at Designerly. She’s also a mobile app designer with a focus on UI. Connect with her about digital marketing, UX and/or tea on LinkedIn.
