Press Release

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Jun 01, 2016
*This article originally appeared in the GRIT Report 2016 Q1 & 2 Edition

By Mark Simon, Managing Director, North America, Digital for Toluna

In our increasingly tech-driven world, the lines between human communication and everyday objects are blurring at a herculean rate. This blending has its own label, “The Internet of Things,” also known as IoT. But what is it exactly? And why should marketers and marketing researchers care?

IoT isn’t a new idea; it’s been around for at least 25 years. Like all great ideas, the time had to be right. Advances in radio frequency identification (RFID), the miniaturization of data collection devices, and cellular communications have made IoT cost effective and scalable. With the wide-ranging availability of broadband internet access, “being connected” is also getting less expensive. Wi-Fi hotspots are nearly everywhere and our Smartphones dutifully connect on demand. The development of newer, faster, better technologies – apps, sensors, and new “wearable tech” is exploding. We are always “on,” always discoverable, and ostensibly joined at the hip with the rest of the world.

With all this technological coziness, it was only a matter of time before our connectedness with each other morphed into connectedness with things. According to research Toluna recently conducted with consumers, 51% want to use IoT devices of some sort with security devices (home alarm, etc.), home appliances (smart refrigerator), and healthcare apps that communicate with the consumer and each other topping the list.

Marketing researchers aren’t exempt from this desire; 40% indicated they are using or considering using IoT in the Q1/2 2016 GRIT Report, which is a significant increase from the Q3/4 2015 GRIT Report. What market researchers are seeming to understand is that while data is important, insight is of the utmost importance when understanding the ‘why’ behind the ‘what.’

Further, the concept of IoT brings about its own host of marketing challenges. For example, if a refrigerator can sense the milk carton is almost empty and orders more from the store, how can marketers influence the brand purchasing decision? The assumption made by the refrigerator is that the milk brand bought last is the milk brand to buy again. Direct consumer input is reduced – or not a factor at all. If this logic expands to other products, consumer purchasing can be forever changed. Suddenly getting through store shelf clutter isn’t the problem for brands – it’s getting the consumer to go to the store in the first place.

A 2014 Pew Research report explored the ramifications and opportunities that IoT will offer and hypothesized its impact on our lives ten years out. At the root of the issue is the ability of IoT to influence consumer behavior. According to the Pew report, IoT will likely utilize incentives to encourage behavior change, whether that change is to purchase a good, have healthier habits, or use public services more effectively. Supporting this belief is Laurel Papworth, a social media educator, who stated, “Every part of our life will be quantifiable, and eternal, and we will answer to the community for our decisions. For example, skipping the gym will have your gym shoes auto tweet (equivalent) to the peer-to-peer health insurance network that will decide to degrade your premiums. There is already a machine that can read brain activity, including desire, in front of advertising by near/proximity. I have no doubt that will be placed into the Big Data databases when evaluating hand gestures, body language, and pace for presenting social objects for discussion/ purchase/voting.”

So what about the data that all these devices are generating? Is it useful? What are the ramifications for marketers in parsing this information? As IoT use grows, these are the questions we must consider. It is our belief that traditional survey data will not become obsolete, as some have suggested. Instead, a new way of interpreting Big Data that marries the wide variety of information sources will be the natural outgrowth. Additionally, we believe marketers will have a greater influence on consumer behavior once the avalanche of IoT information, which can be drilled down to a specific household, is mined for patterns, buying variances (as in lapsed buyers), and brand preferences.

IoT will open the door to dynamic, robust data that will further expose consumer preferences and proclivities and underscore the disruptive nature of 24/7 connectivity.

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