For several years now, the news has been filled with stories about the death of traditional advertising. Instead of classic ads, modern consumers want experiences. AKQA’s chairman Ajaz Ahmed put it this way: “Our belief is that audiences want to have more engagement and more of an experience, rather than be bombarded with endless messages.”
A cursory Google search will discover many more prominent articles repeating this theme and the widespread consensus that the future of marketing will be much more engaging. However, few of these articles discuss how such a massive transformation in the advertising industry is supposed to happen. Experiential marketing is one way to achieve this lofty goal but is notoriously expensive and difficult to scale. It’s not a lack of will or awareness but rather the absence of tools that has held us back. Which new technology will enable this mass migration from messages to experiences?
The answer has come almost out of nowhere: a new advertising format that is far more powerful than anything the market has seen. Much more enjoyable for the consumer, and far more effective than traditional ads, it doesn’t interrupt or distract but rather enhances daily lives and provides real value. I give you the Internet of Things (IoT).
It turns out that the IoT is more than just baby monitors and thermostats; it is potentially the most powerful ad network ever built. The capabilities of the IoT go far beyond the limitations of individual hardware devices by connecting all consumer-facing technologies to enable entirely new and interactive brand experiences at scale.
All media becomes interactive
Traditional ad formats such as television, radio, print and billboards aren’t interactive. In terms of customer engagement, they’re a one-way street, allowing brands to reach consumers in a manner that treats them as passive observers and listeners but gives them no opportunity to engage or interact.
By contrast, the IoT can turn these traditional advertising formats into a two-way communication channel that enable rich engagement. In the same way that Shazam does with music, the IoT can make television commercials interactive to provide consumers with discounts, digital downloads such as mp3s or to let them play cool games. Augmented reality (AR) will be the IoT’s user interface, adding a visual layer on top of advertising and creating media value for consumers. For the first time in history, they will receive a quid pro quo exchange from media for their time and attention.
Pokémon Go meets advertising
Like Pokémon Go, the IoT lets you overlay a digital interface over a physical world, only much more broadly and in a much more brand-centric manner. Advertisers working with the IoT can use it to take infrastructure and turn it into the equivalent of a digital playground.
Consider, for example, a stadium that is currently an amalgamation of many siloed technologies (jumbotron, team’s app, iBeacons, ticket scans, turnstiles, cash registers, etc.). The IoT can merge these together to create a totally immersive, gamified and branded environment.
Rewards tailored to your routines
The IoT enables brands to reward customers just for living their everyday lives. Imagine going for a jog. When your Fitbit or Apple Watch detects that you’ve reached your goal or beaten a personal record, up pops a brand such as Jamba Juice and rewards you with a free drink. The sponsor connects with the consumer at just the right moment, allowing the momentary rush of happiness and pride in personal success to extend to the brand.
There’s also a sense of urgency here: Advertising must move in this direction of becoming more useful, interactive, contextual, personalized and entertaining in order to continue to thrive. Traditional non-interactive ad formats, including television, print, radio and billboards, are becoming less and less effective as the audience changes (comScore has even quantified this trend).
What may once have worked for previous generations has little relevance for today’s consumers who want to interact and share content amongst each other. They’ve grown up with video game controllers in-hand, so Leave It to Beaver just isn’t good enough for them anymore. And if our major media formats don’t adapt to this reality, they will continue to decline.
Finally, IoT marketing will collect much richer data, far beyond customers’ online surfing habits. Instead, it will allow brands to learn how their customers behave in the real world, allowing advertisers to implement comprehensive, targeted, experiential marketing. So, for instance, a child walking into a stadium might be offered a branded treasure hunt or digital trading cards, whereas an adult season ticket holder might be invited to take a virtual test drive in the Lexus that’s sitting in the concourse or a VR walk through a model home that’s for sale in a new nearby community.
IoT advertising is inevitable, and forward-looking companies are already integrating it into their audience engagement strategies. This novel format has the potential to usher in a new innovative era for ad agencies, improving the quality of advertising and making creativity a top priority again.