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Targeted Marketing in the Age of Internet of Things: Is the World Ready?

By Special Guest
Alex Pop, Senior Writer, Rand Marketing
January 06, 2017

Advertising is smart -- but it will become smarter. Already, the devices we use to browse the digital world scan our behavior for patterns. With this capability comes the dangerous possibility that our devices will transmit our deepest secrets.

SFIMA, a marketing association, reports that we are living in the early stages of customized advertising. Customized advertising is the process of tailoring marketing messages to meet the pain-points and material aspirations of web users.

By learning, machines can identify patterns
Bots, crawlers, spiders, and other artificial machine intelligence software search the internet to learn and uncover underlying patterns. The first word Google’s A.I. search algorithm learned back in 2012 was the word for “cat.” It did so by consuming large amounts of data while having the software automatically learn from the data. So rather than having “researchers throw a ton of data at the algorithm, you let the data speak,” says Andrew Ng of Stanford University.

“We never told it during the training, ‘This is a cat,’” said Google fellow Dr. Jeff Dean. “It basically invented the concept of a cat.” (Source).

So in the same way that the algorithm was able to sift through thousands of pictures of four-legged animals with fur and whiskers to come up with the concept of a cat, so too can machines use our own personal data to come up with a concept of “John Smith.”

The concept, this persona, of “John Smith” is highly valuable to large companies that can then better sell their products to John.

Your data is out there
Our browsing behavior leaves behind a paper trail - a digital fingerprint. And just like a fingerprint is unique to each individual user, a digital footprint is unique to each individual.

The internet sees who we want to become.

John Smith, a middle-aged Manhattan stockbroker and dog owner working on Wall Street will be approached by financial institutions, retirement funds, and pet supply stores. His affinity for business suits and luxurious clothing, combined with the order he placed last week from Paul Evans for a $399 pair of oxford loafers means he will be seeing a large amount of advertising for leather dress shoes in the coming days. Should John’s dog ever get sick, and he searches online for a veterinary clinic, he is more likely to see a post titled “8 Ways to Care For Older Dogs” hours following the search.

Consider the case of another persona and what becomes of her data.

Maggie Richardson, an all-American girl who attends law school in the Northeast. She will be targeted for school supplies and textbook rentals. If she “Likes” a celebrity such as Carrie Underwood or Garth Brooks on Facebook, she is more likely than the average consumer to see an ad promoting early ticket sales to a country music concert.

Your information is monetized
The information you share online and the information your smart devices transmit will be used in order to raise marketing agencies’ conversion rates. All the while, advertisers still need more information on individuals in order to push goods and keep up with e-commerce demand.

That being said, not all is doom and gloom - and we shouldn’t take humans’ natural proclivity for expansion and fuller growth to mean that we need to all unplug and live in a doomsday bunker far away from WiFi and radio waves.

Technology is not inherently good or evil. It is our use of it that makes it so.

A company that has been using IoT technology for good is Nike. Through wearables, Nike+ has managed to connect over 38 million members in order to promote fitness, training, and an ecosystem of healthier living.

Hyperconnectivity in an age of hyper-capitalism
The Internet of Things will give machines (and the people running them) the ability to gather terabytes of data on individuals’ preferences and pain points. Analysts estimate that by 2020, there will be more than 13 billion IoT connected devices. Data-Informed finds the number closer to be 50 billion devices by the year 2020, while other experts place the number at 1 trillion (Source).

When the devices around our person - including our smart watches, smart homes, and smart cars - begin to transmit data to and from one another, we will have entered into what the Marketing Journal heralds as “the Fourth Industrial Revolution.” When everyday items are able to generate data about societal movement patterns, shopping habits, and even sleeping and eating habits, we will have entered into an era where the domains of the physical and digital have converged (Source).

About the Author: Alex Pop is the senior writer at Rand Marketing, an internet marketing agency based in Fort Lauderdale, Florida. His background in industrial-organizational psychology allows him to assess technological issues from a social viewpoint. Find out more about Rand Marketing here.




Edited by Ken Briodagh


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