A Marketer’s Guide to The Internet of Things

A Marketer’s Guide to The Internet of Things

With research firm Gartner forecasting that the number of connected things worldwide will reach 20.4 billion by 2020, the rise of the Internet of Things (IoT) is hardly overstated. Indeed, the IoT is already here: The same forecast predicts that 8.4 billion connected things will be in use this year, a 31 percent increase from 2016.

Data is the primary asset that the IoT offers businesses. In fact, CyberCoders estimated recently that the digital universe will reach 40 zettabytes (40 trillion gigabytes) by the end of this decade. As things from cars to homes to stores become equipped with smart sensors, organizations will have the opportunity to gather enormous amounts of customer information that can bolster their business intelligence initiatives and enhance their marketing efforts through unprecedented personalization.

But before undertaking massive and costly IoT projects, businesses will need to develop compelling business cases, Gartner cautions. For marketers, this will mean developing an understanding of what the IoT entails, what opportunities it offers them, and how to take advantage of those opportunities.

The “things” that make up the Internet of Things cover a vast range, so coming up with a single way to define the IoT is tricky. According to Laetitia Gazel Anthoine, CEO of Connecthings, operator of a global network of beacons in public spaces, the IoT “encompasses all objects that can interact with a human or another object through the use of the Internet.”

Dan Mitchell, director of retail and consumer packaged goods at SAS, offers a similar view. “Any device or sensor that’s connected to the Internet is part of the IoT. That includes everything from old-school infrared sensors at store entrances to radio-frequency identification tags on merchandise to beacons that connect to consumers’ smart phones to new lighting systems that form the foundation of a smart store,” he says, adding that having “a software component that can be enhanced with new functions,” such as new ways to gather or analyze data or make next-best offers to customers, is a key characteristic of IoT devices.

Anand Venugopal, head of product for StreamAnalytix at Impetus Technologies, a Big Data software products and services company, says that the IoT “encompasses the entire universe of tools, devices, instruments, products, and other things used by consumers and corporations. If an electronic circuit or an electronic sensor can be attached to it, it can be or will become an IoT-connected item.” But there are subdivisions, he notes. “The IoT world is typically seen as a collection of large domains, each of which may have its own technology, business, user ecosystems, and stakeholders,” he says, citing connected cars, mobile phones, and smart homes as examples.

Tom Libretto, chief marketing officer at Pegasystems, a customer engagement software company, provides a somewhat different take: The IoT, he says, “is only tangible and relevant in the context of how it’s applied to practicable business challenges to produce expected business outcomes.”

In that context, “the common DNA” involves “the capture, collection, normalization, and analysis of environmental or performance data generated by a physical thing” to facilitate some sort of action by the thing itself, by a human being, or by other systems, applications, or things that all have defined roles in producing desired outcomes.

The IoT has three key attributes, according to Robert Gimeno-Feu, managing director of Accenture Digital and IoT analytics lead at Accenture Analytics: It has to connect, compute, and communicate. Connect refers to “the ability to connect sensors or devices to the Internet, cloud, or other devices.” Compute refers to organizations’ “ability to analyze the data generated from their devices, products, customers, and partners and then use that data to derive insights.” Communicate refers to “the ability to take action on the insights and communicate them to people, other devices, or the originating device to do something.”

Due to the “miniaturization of technologies” and the reduced cost of computing power, “there is almost nothing that could not become connected if a use case is developed for it,” Gimeno-Feu says. The possibilities, he adds, are “literally endless.”


This proliferation of devices means that marketers will be dealing with more data than ever before. “For marketers, it really is all about a massive awakening of consumer data for them to draw better insights from, and for the most adept marketers, it provides an incredibly rich experience for the customer,” explains Jeremy Swift, cofounder and CEO of Cordial, provider of an adaptive messaging platform.

While Anthoine agrees, saying that “data inundation is to be expected as more and more things are outfitted with IoT technology,” she stresses how crucial it is not to lose sight of data’s context. “Interpreting data requires context, and using data requires context. Because marketers can now reach out to people at any point during their day, it is important to make sure that the outreach is contextual in nature and applies to them in more ways than one.” Proper context ensures that interactions are actually welcomed by customers, rather than just annoying solicitations, and lead to engagement with the company.

IoT data provides marketers with two key opportunities, according to Carrie Chitsey, founder and CEO of BLK24, a mobile marketing and technology consulting firm. First, it empowers companies with “real-time focus groups, product feedback, and information” that can “save them millions of dollars in research and development and speed up time to market for new products.” Second, it provides companies with a wealth of sales and marketing data that can be used to enhance customer engagements.

But, Chitsey emphasizes, companies need to think about their strategy up front to make sure that sensors, mobile apps, dashboards, and products address what the consumer wants, as well as what the company is looking to get out of its focus on the IoT.

Libretto also notes how more data will lead to more opportunities for marketers. “Marketers have come to accept that increasing amounts of data is the new normal. Additional types of data, such as sensorial data generated by connected things, can be extremely powerful in adding greater context to audiences and individuals with whom brands are attempting to establish and maintain relationships,” he says. “Marketing organizations that invest in business intelligence capabilities, build out data analytics systems and practices, and can pivot their marketing approach from traditional segment-based communications to one-to-one or individually personalized customer engagement will be able to generate real value from the potential that IoT-derived data promises.”

Swift warns, though, that all of this data comes at a price: It could overwhelm both marketers and the relational database models they use. This, he says, means that “marketers must focus on partners and solutions that are built to scale for this exciting new world. Legacy systems from the early 2000s simply won’t cut it for this more progressive, data-driven world where it’s all about engaging in the moment versus 24 hours later, when the moment passes.”

Today’s marketers, he continues, need to think about setting up their businesses so that they have access to real-time consumer data and can then take action on that data just as quickly. “This doesn’t mean inundating the consumer every second of every day; rather, with machines, we can begin to use that data more intelligently to know when, where, and how we should communicate with the consumer,” he states.


Experts agree that when it comes to the IoT, organizations need to start with the data they have and establish goals at the outset. “Companies shouldn’t fall into the trap of implementing an IoT project for the sake of it because it sounds like that’s what everyone else is doing,” Gimeno-Feu says. “There needs to be a clear idea of what they want to do with the IoT. That might not be a big transformation initially, but at the start, it could simply be to understand what data currently exists within their company and how that could be put to use.”

“Evaluating the practical application of IoT technologies and the potential outcomes that can be achieved is no different than how new technology concepts have historically been adopted,” Libretto says. “A common characteristic shared by truly great organizations is their ability to leverage technological advancement to continuously improve their customer experience, hone their own operational capabilities, and rapidly adapt and evolve their business systems to realize faster time to value than their competition. The adoption of IoT technologies is likely to follow the same format.”

Organizations need to make a number of decisions before diving into the IoT, according to experts. Venugopal says that companies should “create a consolidated strategy and examine it with an open mind” to determine which things, phenomena, actions, and events, if observed and analyzed, can grow the business, either in the form of more revenue, profits, customer segments, and markets, or reduced costs and losses.

Businesses should also start instrumenting and collecting data from these sources and subjecting it to correlation and analytics, he adds. That will require investment in strong data science and analytics capabilities to make sense of data and guide and execute analytics initiatives.

Chitsey offers similar advice, suggesting companies bring in resources or dedicate them internally to consider all aspects of IoT technology, especially during the design and architecture phase of the project. This includes questions about what will be done with the data. “A lot of organizations miss these steps and try to re-architect their technology to go back, which is very expensive if not done correctly,” she warns.

Organizations must take four key steps to prepare for IoT projects, according to Gimeno-Feu. First, they must be ready for new generations of smart sensors that do not need to send data to the cloud for analytics to be applied. Rather, these sensors will be able to run analytics on the device itself, which can allow for “autonomous decisions to be made by devices about a next action, within a defined set of rules, without the need for a human to be involved.” Second, they should prepare to implement artificial intelligence, which will “bring sensor-to-sensor and sensor-to-actuator communication to the next level, creating new value and new intelligence.” Third, they need to attract or retain a skilled workforce. Fourth, they need to establish an IoT ecosystem to ensure they can keep pace with the inevitable technological advances in the space.

Of all of these steps, the labor pool might be the biggest obstacle: Data scientists and other IoT experts are scarce.

Statistics corroborate the demand for data scientists. According to an MIT–Sloan Management Review, 40 percent of companies were struggling to find and retain qualified data analysts. IDC predicts that by next year, companies will need 181,000 people with deep analytical skills and five times as many people with data management and interpretation skills. A growing number of universities now offer analytics and data science programs, but schools can’t get trained people out into the field quickly enough, according to research from Deloitte.

To further highlight the shortage, data scientist topped Glassdoor’s “Best Jobs in America” list for the second year running, based on the number of job openings, salary, and overall job satisfaction rating. For 2017, Glassdoor lists the position’s overall job score as a 4.8 on a five-point scale, with a job satisfaction score of 4.4 and a median base salary of $110,000. This year, Glassdoor counts 4,184 job openings for data scientist. In 2016, the site listed 1,736 openings.

Beyond personnel, other investment targets should include streaming analytics, machine learning, and artificial intelligence platforms that can accept large volumes of high-velocity data, analyze them, and extract meaningful insights in short periods of time, according to Venugopal, who says that these technologies could enable “rapid-turnaround decision making and responsive actions to leverage the opportunity.”

These actions can include selling or offering the right product at the right time in the right place or context or preventing problems such as security breaches, service outages, and customers terminating contracts.

“The power of the IoT lies in the value you create by bringing together the hardware, networking, and data in a thoughtful way. It’s important to sense and respond in a way that solves a problem,” SAS’s Mitchell says. “The devices and networks will definitely change rapidly, so focus on being able to understand what is happening by becoming data experts. From there, you can create value by using the information to predict the best result. That value engine is the core of your IoT model.”

“The IoT provides us with the opportunity to change the way we live our lives and interact with our surroundings,” Anthoine says. “It is, by all means, a disruptor to the legacy system business model.”

Looking forward, Gimeno-Feu predicts that the IoT will foster collaboration on an entirely new level. “As no one business can reap the potential benefits of the IoT alone, we’ll see platforms and standards enabling a more open IoT ecosystem, with cross-fertilization and mutually beneficial business services created across enterprises, geographies, and industries, blurring previous borders and encouraging innovation,” he says. “The increased interoperability of IoT devices will also enable a faster and more wide-ranging adoption of the IoT, as consumers and businesses alike will start to benefit from the ability of connected devices to integrate and communicate with existing infrastructures and each other.”