Everything is changing, marketing is no exception

Did you know that bluetooth pegs now exist? No really, Omo has made the first “smart peg”. You peg your clothes on the clothes line and these pegs sync with your phone and tell you when your clothes are dry or when it’s going to rain. How far is too far?

You can read more about this “smart peg” here.

For this week’s topic we were exposed to the concepts of “Big Data” and “The Internet of Things”. From my understanding of McAfee’s & Brynjolfsson’s (2012) article “Big Data: The Management Revolution”, Big Data simply refers to the mass collection of a large quantity of data gathered from various sources and pooled into massive, central, globally accessible databases that are constantly pooling together new data instantly, such as Internet Clouds. One of the biggest information collectors that comes to mind is Google. Google collects all sorts of information from almost everybody whenever they’re using their products or services. Every Google search you make, every ad you click on, every Google app you download and everything you do on it sends Google information about you, and Google sells the majority of this information to third parties (with obvious exceptions for security reasons i.e. credit card details, or such information that you specifically opted out of ‘sharing’). The amount of information that can be gathered by any business today was almost unfathomable two decades ago and the mainstream adoption of the Internet has helped make all of this possible.

For the first time in our lives, complex algorithms can be formulated based on real, live data collected from potentially every mouse click any potential customer makes on any website. Businesses can track how long people were on a site, what they clicked on, what else they were searching for, whether they ended up making a purchase, possibly what other websites they visited prior to purchase, tracing them almost anywhere on the internet. With access to the right information, a business could effectively predict almost every move you make on the Internet. From a business’ perspective this presents an information goldmine. With each visitor to a site they gain even more data to further perfect their algorithms that predict behaviour, and work out how best to gain each person’s attention based on their behaviours and also learn a whole lot more about each customer segment. This is radically changing marketing in a positive way by giving firms access to more data but also poses more challenges in terms of how to effectively use this data. McAfee and Brynjolfsson suggest there are 5 key new challenges posed to markets: Leadership, Talent Management, Technology, Decision making and Company Culture. You can read more about these challenges in their article referenced at the end of this post.

There also comes the concern of how marketers will address ethical concerns of being able to access this information. Where does one draw the line between ‘harmless data collection’ and spying?

The “Internet of Things” is a new phrase that describes how, limited to our imaginations, information about anything, anyone or anyplace can be put and learned about and placed on the Internet, becoming part of the “things” of the Internet. With each passing year, expensive technologies are getting cheaper, more compact and more durable. Within the next few decades it may well be possible for example to have affordable smart devices for just about anything in your home. We’ve already seen Nike’s “smart” shoes (Nike+) that connect with an app that tells the wearer how many steps they’ve taken, how far they’ve run, even where they’ve been running.

It’s technically possible for shoes (with the right sensors) to tell the wearer so much more, such as: how worn out the soles are, the estimated time the shoes need before repair or replacement, even if you have bad foot odour. Shoes could tell the temperature of your feet  or the environment around you, we’re even seeing the famous Back To The Future  II “Power Lace shoes” becoming a real product later this year (for a hefty price of course) also from Nike.

The technology technically already exists to add anything you want to a shoe, the only thing holding back the “Internet of Things” is the technology itself: It’s not quite ready yet. It can be done however impractical it is in terms of cost and physical size. Having shoes that have all the above attributes for example would easily cost around $1,000 a pair and probably be heavy, bulky and rather uncomfortable. Fast forward a few decades though and it’s possible putting in this technology would cost a few extra dollars at best. However with almost anything the progress in the technology is mostly driven by the demand for the product. But as Steve Jobs said “A lot of times, people don’t know what they want until you show it to them.” posing the biggest challenge of all: accurately predicting what customers want before they even know they want it.

Take another example, there’s no reason why a fridge cannot sync with an app on your phone to contact nearby supermarkets, assess what’s currently inside the fridge, how empty everything is and automatically order new food items you manage with app on your phone when something runs from the store of your choosing or set for the cheapest deal or for fastest delivery. An even simpler example: There’s no reason why a car cannot sync with your smartphone and inform you of where the cheapest nearby petrol stations are when running low on fuel, using past data and trends and current global oil prices to predict when the price of fuel is most likely to go down and recommend where and when is best to refuel. There’s no reason why a car cannot tell the driver whether to avoid a certain road on their regular trip to work due to accidents, bad weather conditions or traffic, or garages that automatically open their doors whenever your car is approaching your home, using your past behaviour to predict what time you usually go to and from home, your house could even remind you to get up in the morning or when to go to bed and prepare everything you currently do yourself routinely in the morning when you wake up or in the evening when the day’s over.

The reason I say to sync with your phone is that the tech already exists within your smartphone. There’s no use integrating GPS hardware and statistical software into the car because within about 3-5 years the technology will be out of date. It would save a lot more on costs to have smart devices sync with smartphones rather than push the cost up of every single device by building unnecessary hardware into each one. It saves on cost, and it all sync up with the one device.

The potential is limitless for the “Internet of Things”. Thinking about my own life, weekday mornings never exactly change, it’s always the same routine: Get out of bed, shower and clean up, eat breakfast, pack my bags and take the same bus to take the same train to reach the same destination. It’s very predictable and can easily be catered for automatically to make it the most convenient for me. Apply it to your own mornings and think about how many aspects could be automated based on past behaviour. For the majority of people it consists of the same thing each morning, with the only variation possibly being what you pack for lunch. The “Internet of Things” does have its drawbacks however, the major concern is that of privacy. Do consumers really want a company being able know what time they get out of bed, what they do and in what order they do them in, down to the finest detail of what milk they used in what breakfast cereal and what shampoo they used and how long they spent shaving with which razor… The list could be endless. Your life suddenly doesn’t become so private, so where does one draw the line between being helpful and being invasive? If any business could chuck a few sensors on any device and analyse your behaviour, and these devices were riddled throughout your home, you’d feel like there’s a spy around you…

In summary, the collection of Big Data, and the integration of the “Internet of Things” creates great opportunities for marketers to learn the absolute most about their customers and cater to their needs with near perfect results without limit, however we could already be headed to an age of no privacy and significant security concerns. Do we really want everybody being able to know absolutely anything about ourselves?

 

References:

McAfee, A., & Brynjolfsson, E. (2012). Big Data: The Management Revolution. (cover story). Harvard Business Review, 90(10), 60-68.