The Internet of Things (IoT) has been described as the next ‘Industrial Revolution’ – but it also has major implications for marketers.
At CGI, we define The Internet of Things (IoT) as a world where smart objects are seamlessly integrated as part of a global network; where smart objects interact without human intervention to deliver new services or improved processes. IoT redefines the way humans and machines interface and the way they interact with the world around them.
But just how many machines are we talking about? According to Gartner’s IoT forecast, “Endpoints of the IoT will grow at a 35% CAGR from 2013 through 2020, reaching an installed base of 25 billion units, with over half of them consumer applications. IoT will support total service spending of about $263 billion in 2020; most of this spending will occur in the professional domain.”1
This rise in installed base, coupled with Gartner’s forecast that 10% of IoT devices will be designed to allow contextual analysis and autonomous interactions – ie these new devices will be aware of their surroundings and automatically interact with them, has major implications for the marketing community. Data volume and immediacy coupled with device ubiquity and intimacy, means that as marketers, we are about to be hit with a data tsunami that is unlike anything we’ve seen before. And according to the same analysis from Gartner, the consumer segment of "things," including health and fitness, information and infotainment, and home automation/security/energy monitoring, will account for more than 53% of all installed things – so creating major opportunities for the business to business, business to consumer and B2B2C marketing community.
So what does this mean for marketers?
If you look at the traditional marketing mix for services, the 7 P’s;
…the implications of all this new, often real-time, business and lifestyle data are huge. The potential for marketing-savvy organisations that get it right in terms of speed to market, customer acquisition and retention and differentiated offers are obvious, not to mention marketing cost reduction and agility . The perils for those who don’t are also clear – just look at the changing face of the high street and the winners and losers in the drive to digital business models – well known and long standing brands such as Woolworths, HMV and Jessop’s whose business models didn’t adapt quickly enough to the digital business world we now live in have all ceased trading or are a shadow of what they used to be.
Over the series of blogs, I’ll look at the potential impacts of IoT on each of the 7 P’s, and provide an insight on the opportunities and threats it will create. What will the impact be on product design and speed to market in an IoT world? As devices get more ubiquitous and cheaper, how will organisations monitise IoT…and with an ever increasing range of channels, what are the impacts on the promotional mix? IoT is seen as the next major transformational lever for an organisation.
In the meantime, learn more about IoT, download a free copy of our IoT for Dummies Guide.
1Source: Gartner, P. Middleton, T. Koslowski and A. McIntyre, Forecast Analysis: Internet of Things, Endpoints and Associated Services, Worldwide, 2014 Update, 02 December 2014