Is Advertising on the Internet of Things a Good Idea for my Brand?

November 26, 2017

The Internet of Things (IoT) is still a nascent technology. While the time when everyone will have smart refrigerators and an automated home may still be a few years off, the future is rapidly approaching with increased IoT usage, and we are building now toward that future.

Since IoT devices are likely to spur an ecosystem of apps in the same way that smartphones have, we can expect advertising to be part of this landscape.

In this series, we are discussing the new world of the IoT and why it is an important opportunity for advertisers. The first article defined IoT advertising. Now, to answer the question of whether IoT advertising is a good idea for brands, let's take a closer look at the benefits and challenges.

3 benefits of IoT advertising

IoT advertising offers an exciting opportunity for advertisers to reach consumers in a highly targeted new way:

It's a personal one-on-one communication. It's incredibly difficult to ignore an ad on your smartwatch. Unlike other forms of advertising, like banners, TV and digital video, there are exponentially fewer issues with "viewability.” Due to the nature of interactions between the consumer and the IoT devices, a marketer can be much more confident that the target consumer has seen your ad relative to traditional TV and digital advertising. Although consumers may not engage with IoT devices for long periods of time, when they do, they are focused on a task. It delivers strong data. The data that you can collect with IoT is much more illuminating than what is currently available. Online you might see that your target consumer has been looking for recipes on cooking web sites, but with IoT you can see what types of food they eat every day. You can find out when and how often they exercise every day, which stores they drive past and other details about their actual behavior. Taken even further, you can target based on biometric data, such as someone's resting and active heartbeat rates. Clearly, the ad targeting implications for this data are boundless. It can have perfect timing. It's not often that consumers are thinking about laundry detergent, but if there were a perfect time for a detergent marketer to reach that target, it's when they're doing the wash (and possibly also with the knowledge that their detergent supply is low). A targeted ad on a smart washer, then, could offer a free trial of a new detergent that promises to get clothes cleaner, together with a call-to-action to initiate shipping of said detergent. Likewise, an ad on a smart refrigerator might note that you eat a lot of hummus and offer a coupon for a competing brand. Compared to traditional TV and digital advertising, IoT advertising can provide more opportune timing for marketers to reach target consumers.

Problems with IoT Advertising:

As with any new form of media, there are downsides as well. These aren't insurmountable, but they are worth considering. Here are two considerations:

It's personal. That's right, the primary benefit of IoT advertising has the potential to also be its biggest drawback. It is essential that smartphone ads do not end up annoying the consumer, as the IoT setting can exacerbate the effects of poor advertising. It can bring concerns about privacy. Many consumers will be wary about giving out data with intimate details of their daily life, even if that data is anonymized.

How IoT advertising can be successful

Navigating IoT advertising successfully will hinge on delivering carefully executed campaigns that give consumers maximum choice and discretion over the advertising they see. Here's how:

Make it voluntary. As with smartphones, we should not be running native ads on the platform without some form of user initiation. For instance, if you buy a smart refrigerator and never download or use a pre-installed app, then you should never see an ad on the device. But if you download a recipe app – in keeping with the current mobile environment – you should have a choice of whether to pay for the app or get it free in exchange for viewing advertising. In fact, a recent IAB survey showed that 55% of respondents said they would be willing to view ads on IoT devices in exchange for discounts or exclusive apps. Make it relevant. Advertising can be most effective when it's relevant. If you're in the market for a car, then car ads can be very interesting and helpful. However, advertising that is not relevant, can be annoying to the consumer. If you don't have an infant, then ads for diapers can be viewed as a waste of time. On IoT, though, the standard of relevancy is even higher. For instance, a runner might like an ad for running shoes on her smartwatch during a cool-down after a jog, but won't tolerate an ad at that moment for something totally unrelated, like car insurance. Give consumers control of their data. Be transparent and give consumers control of their data. They should be made aware of how their data is being used, where it's going and the content of the data. It should be their choice whether to share it.

By following these guidelines, I believe IoT advertising can be successful for marketers and well-received by consumers. As with other forms of digital media, ads will also subsidize a healthy ecosystem that will further advance the functionality of IoT devices.

The time to start building this ecosystem is now. The more we experiment and iterate on IoT advertising now, the better it will be in a few years, when the technology goes mainstream.

At GlassView, we're beginning to distribute IoT advertising campaigns at scale as a way to further the foundation of this ecosystem, and will explore a case study of a successful IoT advertising campaign in the next article of this series.