The implementation of IoT (Internet of Things) in advertising is changing the way businesses create and deliver ad content – all in the goal of providing tailored, contextual, and interactive ads to customers.
Advertising is an important part of marketing your brand as it has the potential to change consumers’ perception of your brand and eventually generate sales. Earlier, businesses used to create a generic ad for all their audience segments. Today, due to digital transformation, this method of advertising has given way to a more persona- and data-driven approach. Gathering and processing customers’ data has become easier than ever, and hence a one-size-fits-all is not the solution anymore for businesses and advertisers. They need to provide personalized ads that are relevant to customers. And one of the major factors that is easing access to customers’ data for them to create personalized advertisements is IoT. The number of IoT devices is steadily growing. According to a report, there will be 75.44 billion connected devices worldwide by 2025. Businesses can leverage IoT in advertising to gather more customer data and analyze it to send more personalized ads to customers based on their preferences.
Use cases of IoT in advertising
The personalization that IoT provides in advertising is helping businesses to pitch in their relevant products at the right time.
Context-based targeting
Sending context-based ads to customers allows brands to directly connect with them and tremendously increases the conversion rate. And with almost everyone in today’s world having an IoT device that can be used to gather customer data and get insights from it, it has become possible for businesses to serve customers with context-based ads. Imagine a person wants to celebrate his marriage anniversary in the coming week, and an ad about a nearby restaurant is sent to him. The chances of him booking a table at that restaurant certainly increase. That’s the impact context-based ads can make.
Advertising companies have already started implementing IoT to provide context-based ads. GlassView, for instance, has started using IoT to connect to cameras in the home or nearby locations of a user to send them context-based ads on their wearables. Let’s say a person’s shoes get torn while jogging in a park. A camera on the way back to his house detects the torn shoes and sends alerts to GlassView. GlassView can then display ads to the person about nearby stores that sell shoes. People wear fitness trackers and other such wearable devices to monitor their health. Advertisers can connect to these wearables to send health-related ads to users. Let’s say a wearable on a person’s wrist detects a low pulse-rate. Advertisers can use that data and send relevant email ads to that person’s smartphone, such as for medicines, pharmacies, or doctors.
In-store advertising
Retailers can leverage IoT to show real-time ads to buyers to sell more products and generate more revenue. A beacon, an IoT device, can help retailers do that. Beacons are small transmitters that can transmit a signal to nearby devices using low-energy Bluetooth signals. Imagine a buyer getting into a retail store to buy milk for preparing coffee. He picks a packet or container of milk and heads towards the counter to pay money. Suddenly a nearby LED display starts showing an ad of a coffee brand, and the person realizes that he needs to buy coffee sachets as well. That’s exactly how in-store advertising helps to generate more sales. Retailers can implement beacons almost everywhere in their store as they are really small in size and might not even be noticed by customers. They can also connect to Bluetooth-enabled smartphones when in range to send personalized real-time ads directly to a person’s smartphone.
Location-based advertising
IoT devices track a person’s location with the help of GPS. Advertisers can utilize location data to send relevant advertisements. This can work similar to Google’s nearby business search. When a person searches for nearby restaurants, Google displays results of a list of restaurants along with the distance. The same can be used by other apps to provide IoT-based advertising. Retailers can leverage IoT to show ads to people near their stores. They can install beacons outside their stores that can connect to Bluetooth-enabled smartphones of people who are walking in front of the store. When a connection is established, beacons can automatically send ads about the products available inside the store to attract them. Connecting beacons to cameras installed at the front door of the store can allow retailers to send personalized ads to the people outside their store. The cameras can detect what the person is wearing or the objects he is carrying and send relevant ads. For instance, if a person is wearing a round-neck t-shirt, then beacons can automatically show ads about all the round-neck t-shirts available in the store.
Intent marketing
Intent marketing is targeting customers based on their purpose and intentions over that of the brand. Intent marketing helps businesses to improve their marketing and advertising tactics to gain better results. Businesses can benefit from intent marketing in several ways, like defining the ideal customer, optimizing customer engagement, and improving content marketing. But to develop intent marketing and advertising strategies, businesses need to find out what their typical customer’s intent is. That’s where IoT comes in. Advertisers can determine customers’ intent from their data, and IoT devices can help gather that data. Let’s say a customer buys shirts from one brand because of the fabric and jeans from another as he feels comfortable in them. Intent marketing can help the shirt brand to understand that the customer’s intent is to buy only shirts from their stores and not jeans. They can then majorly send only shirt ads to that customer and pitch in other products after a certain interval of time. The customer thus will only get relevant ads and ads about all the products of that brand.
Interactive advertising
Advertising is not always a one-way effort. Businesses can also use interactive advertising to promote their products. Customers can proactively view ads to get more information about a product. For example, RFID tags can be connected to products, and consumers can connect to brands’ websites by scanning them through the mobile. Johnnie Walker, the manufacturer of exceptional scotch whiskeys, is already using IoT for interactive advertising. They use a smart sensor tag that allows consumers to detect whether the bottle is sealed or opened by scanning the tags through their smartphones. Along with bottle information, they also send personalized communications about other products to the customers. The same can apply to almost all packaged products. People usually go through nutritional information about packaged products. Businesses can create RFID tags that can lead customers to their websites. When customers scan RFID tags for nutritional information and land on businesses’ websites, they can be shown other relevant products along with the information they require. For instance, businesses can show other products with similar or better nutritional composition.
Along with an opportunity for businesses to create and send more personalized ads to customers, utilizing IoT in advertising also raises privacy concerns. While most people are ready to disclose their data for personalized services, they also want to ensure that their data is kept private and secure. That’s where businesses should focus on while implementing the use of AI in advertising. Businesses need to collaborate with IoT developers who can find ways to improve IoT privacy like encrypting data communication, minimizing data retention, and anonymizing data.
