The Future Of Marketing In A Sensor Filled World

Embedded Bits, Bytes & Sensors by Josh Knauer



Sensors have successfully increased security and optimized manufacturing in many industries but they have yet to truly show their impact in marketing. It seems like the conversation du jour in consumer marketing is stuck. We keep talking of just the possibilities of deep consumer insights.

With all the progress that is being made, and sensor technology becoming ubiquitous, we are wearing sensors on us almost all of the time! Why is consumer marketing still lagging behind in leveraging this data? Consumer measurement is broken, and data from sensors could fix it.

Is The $1.1-Trillion We Spend In Global Marketing Worth It?

Let us take a step back. Between spending money on advertising, coupons, shelf placement and market research, global marketing spending to consumers is estimated to reach $1.1 trillion this year alone. Most of the decisions on how that money is spent are still made based on traditional survey data.

There are a number of issues with survey data, the most obvious being low sample sizes and respondents' need to relay socially desirable answers even when they are not true. In other words, just because I say I love to go jogging every morning does not mean I actually go jogging every morning. The technology to measure what people are truly doing is out there, now marketers have to figure out how to use this data to make better more cost effective decisions.

Consumers Want To Be Plugged In

Between ad blocking, bot fraud and extremely fragmented media consumption, reaching consumers has become significantly more complex than it used to be. While there are many more channels to reach consumers, there are just as many ways to avoid receiving ads.

According to a survey from AdExchanger, "More than 80% of the 28,000 people surveyed in 28 countries thought they saw too many ads. Seventy three percent of those aged 14 to 17 years old know about ad blocking, while only half of those over 55 are aware of ad blocking technology."

In France, one third of internet users had ad blockers installed in 2015. Ad blocking trends show a general rejection and distrust of advertising, particularly in the digital space. A Google search for "people hate advertising" yields 58M results. It is safe to say that this idea of people hating advertising is pretty established out there. But do people really hate it?

People appreciate ads or other marketing efforts that are relevant to them, delivered at the right time, in the right place at the moment they are most likely to be interested or have a need. What they hate is bad advertising that is irrelevant to them and keeps them from seeing something they want to see. Sensor technology can help solve the relevance problem.

Recently, the retail giant Target announced a limited test of instore beacons that push notifications to store visitors. Shoppers who have the Target app on their phone can now receive real-time offers in the form of coupons that pertain to products in the store aisle they are currently walking through. This pilot is being tested in a few stores over the country and marks only the beginning of sensor technology's impact on retail.

What needs to happen is, every consumer has a profile that is built out of all the data that is being collected across different apps, devices, and physical interactions with products. This does not have to mean an Orwellian Big Brother is coming. Consumers should own and control access to their own data and profiles. If they controlled their data, and were able to selectively allow access to it, their devices could help filter and deliver ads that are uniquely relevant to them.

In turn, advertisers could finally do what they have wanted to do for a long time: make truly addressable ads that reach the consumers at just the right moment. They would spend their ad dollars only where the return is greatest.

This is not being done today because data lives in silos: different apps, different devices. Not all sensors and data sources can communicate with each other. A model for how this "truth" data can be realized is currently underway at major league baseball.

How Is Baseball Leading The Consumer Insights Collection?

Major league baseball is on the cutting edge when it comes to capturing and studying micro data. MEMS and sensors track everything on the field and measure games in unprecedented ways, from following a single player's eye movement to an entire team's coordinated response to a fly ball.

Consumer brands already capture a lot of their customers' engagement online but so far very little is known about what happens in brick and mortar stores. Early technologies like tracking cell phones in stores or relying on self-reported customer-journey logs are riddled with problems and tend to be insufficient.

Instead of a baseball field, imagine a store full of sensors. If MEMS and sensor technology makes it into stores, we could track the way a customer interacts with products, how they move through the store, and what customer segment they belong to, all with unparalleled precision. We could unlock a new universe of insights that could be significantly larger than our digital footprint.

The cost of implementing this type of retail sensor network will soon be low enough to allow this to become a reality. This begs the question, why hasn't data from MEMS and sensors revolutionized marketing and advertising? Three reasons:

  1. Most sensor and MEMS data doesn't carry a big dollar value unless one owns and controls the channels for delivering it and making it useful
  2. The data lives in database silos and doesn't come in one format
  3. Siloed data in proprietary formats can't just be exported into a spreadsheet and compared easily

The call to action for MEMS and sensor producers is to agree on data standards to build devices that can communicate with each other and make them accessible in an open data ecosystem with much more nuanced intellectual property rights attached to the data. Think: creative commons attribution.

All major retailers and brands want to measure different things and their focus is understandably on getting the data they most urgently need first, before lobbying for standards and interoperability. In the coming years, because of predictable market forces, we'll witness the mainstreamification of MEMS and sensors, they will be ubiquitous.

If MEMS and sensor producers lead the effort by innovating their product in ways that will set standards and interoperability within each sensor node, they can be on the forefront of the amazing opportunity this data presents. At Rhiza, we are looking forward to helping them to package and monetize that data for the marketing world.

About the Author

Josh Knauer is a co-founder, CEO, and President of Rhiza, an emerging leader in marketing analytics. Josh has been a social entrepreneur for the past 20 years, creating and leading successful organizations in both the non-profit and for-profit sectors. In spring of 2010, he was appointed by the Obama Administration to a working group of President Obama's Council of Advisors on Science and Technology. Prior to Rhiza, MAYA Design's Information Commons project. Before that, he founded and served as CEO of Green Marketplace, a clearing-house for socially and environmentally responsible products, services and information, which he sold to Gaiam in 2002.


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