IoT: What It Is and How It's Used in Marketing
Below, we'll explore in more detail what the Internet of Things is and how it's used in marketing and other fields.
How IoT helps businesses
Personalization
With the information collected by IoT devices, companies create marketing campaigns that are highly tailored to each customer's individual needs. For example, you can offer a discount on a specific product, knowing that the customer recently showed interest in a similar item.
Location tracking
IoT technologies open new opportunities for geomarketing by accurately identifying customers' locations. Companies can create personalized offers and marketing campaigns based on where the customer is at any given moment.
Performance analysis
With IoT systems, companies can conduct more precise and in-depth assessments of their marketing campaigns' effectiveness. IoT sensors allow tracking of various metrics, such as:
- The number of customers who visited the store or website after seeing the advertisement. This helps you evaluate how marketing impacts attracting new customers.
- Conversion rate. It shows how many customers who saw the ad made a purchase, helping you determine how effective the ad is at driving sales.
Who invented IoT and how it works
The origins of IoT
While the concept of the Internet of Things (IoT) might seem like a cutting-edge technological innovation, its roots trace back to the 1980s. At that time, a group of students came up with a special device to track the availability and temperature of soda in a vending machine located in their dormitory. This smart device was essentially a separate board that read information from the machine's indicators and determined whether drinks were available. The device was connected to the local network, so the students didn't have to walk to the machine; they could remotely find out if they could grab a cold Coke.
The evolution of IoT
The explosive growth of the Internet of Things was made possible by the miniaturization, speed increase, and intelligence of microchips. Almost all household devices connected to the network are now considered "smart"—light bulbs, outlets, kettles, stoves, refrigerators, and even irons. For many people, the concept of the Internet of Things is associated with smart home devices.
How it works
The Internet of Things operates by collecting information from devices and transmitting it instantaneously to others. The system's core consists of three architecture levels:
- Vendor model: Involves using devices from a single manufacturer, ensuring data confidentiality. Information does not leave the vendor's secure network, and access is granted using the vendor's proprietary protocols. This model is widely used in medicine, where data protection is critical.
- Local networks: Involves connecting devices into a unified infrastructure, where devices connect to the Internet via nodes (or hubs). This method is suitable for small devices like alarm sensors that run on a single battery for a long time. These devices communicate only with the node, which then processes or sends the data to the manufacturer.
Is it dangerous?
Unfortunately, IoT isn't without its security risks.
- Data collection: IoT devices collect vast amounts of information. The more devices are connected, the higher the risk of hacking and data theft.
- Lack of protection: Inexpensive gadgets are often released without proper security features. Manufacturers cut corners on security, making these devices easy targets for hackers.
- Data is valuable: Some companies that produce smart devices collect various data on their customers and use it for marketing purposes.
- Manufacturer reliability: Do you trust the company that made your smart camera or vacuum? Brands have the potential to monitor you and even take pictures without your consent.
- Hardware limitations: Complex encryption algorithms aren't always applicable in IoT devices due to their limited resources. For instance, if a device has a low-capacity battery, the developer may simplify the security algorithm. Manufacturers are often forced to use lightweight encryption or, in some cases, forgo it entirely.
What are IoT devices?
Let's look at the most common examples of Internet of Things (IoT) devices.
Transportation
Smart cars connect to the internet through various devices: special dash cameras, systems, or gateways. These vehicles are equipped with sensors that collect information about engine performance, brakes, speedometer readings, and tire pressure to monitor the driver's behavior and the vehicle's condition. In cities with smart traffic lights, such a car can sync with them.
Smart home
These IoT devices make homes more functional, safe, and comfortable. For example, smart sockets monitor electricity consumption, and thermostats regulate temperature. Smart hydroponics manage plant watering, while smoke detectors monitor for smoke. Security systems like smart locks, cameras, and leak sensors detect issues and alert the homeowners.
Smart home gadgets help with the following:
Automatically turning off unnecessary appliances
Managing and servicing rental properties
Finding lost items, like keys
Automating routine tasks, such as cleaning or making coffee.
Accessories
These are small devices that we wear on the body. They communicate with other devices and the Internet of Things using special technology. Wearable devices include smartwatches, fitness trackers, clothing, and footwear (for both people and animals). Many manufacturers now produce smart clothing: Tommy Hilfiger, Levi’s, Samsung, Google.
Medicine
Miniature probes and next-generation pacemakers can not only perform their primary functions but also remain in the human body for several years, continuously transmitting information about its condition. Now, there’s no need for invasive surgery to assess how well the heart is working. There are sensors that dissolve in the body when they’re no longer needed (for example, when monitoring heart function for a period after surgery). These devices don't have batteries; they are powered by a special network node placed against the chest.
Industry
The industrial Internet of Things (IoT) involves smart devices integrated into manufacturing, retail, healthcare, and other business processes to optimize their operations. Sensors and other industrial equipment connected to IoT provide business owners with valuable real-time data. These devices help monitor supply chains, logistics, personnel management, and production processes, leading to cost reduction and increased profits.
The specifics of the industrial Internet of Things depend on the particular industry.
In manufacturing, IoT plays a crucial role in ensuring smooth operations. With the help of special applications analyzing data from sensors, equipment failures can be predicted in advance to avoid unplanned downtime and save valuable time. Moreover, wearable devices such as helmets, bracelets, and cameras are actively used in production. These technologies enhance employee safety by promptly warning them of potential dangers. In the automotive industry, IoT significantly contributes to improving efficiency as well. Analytics systems based on sensor data optimize car maintenance and assembly processes.
Disadvantages and advantages of the Internet of Things
Pros
IoT has several advantages that make our lives more comfortable and efficient.
The system automatically turns off unnecessary devices (such as air conditioning and lights) when no one is around, which helps save energy. Some advanced smart homes even automatically close windows on hot days to keep the house cool.
In addition, the Internet of Things automates routine tasks, such as making morning coffee or opening blinds when the alarm goes off. This saves users time.
Cons
Of course, IoT has its disadvantages. First, the system is entirely dependent on a stable internet connection. In regions where connectivity issues occur, the functionality of a smart home will be significantly limited. In fact, without the internet, it stops performing its functions.
Second, data privacy is a concern. Some manufacturers use information collected from devices for their purposes, such as showing personalized ads. While steps are being taken to ensure user security, there are still risks of data breaches.
Examples of IoT usage in marketing
Nivea Sun Kids proved that print advertising and IoT technologies can coexist harmoniously. As part of a campaign in a Brazilian magazine, they featured ad pages where parents could cut out bracelets for their children. These bracelets had built-in locators, and when synced with the Nivea mobile app, parents could set a safe zone. If the child wandered beyond this zone, the app would send a notification. The technology also showed whether the wearer was moving closer or further away.
Thanks to this creative campaign, Nivea Sun Kids gained strong word-of-mouth promotion among Brazilian parents and positioned itself as a caring and innovative brand.
Conclusion
Smart IoT is a technology that is rapidly integrating into various aspects of our lives. It enhances process efficiency, optimizes resources, and improves the quality of life for users. Thanks to IoT, homes are becoming smarter, manufacturing is becoming uninterrupted, and the automotive industry is becoming more advanced.
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