What your microwave knows about you: IOT data in marketing

As Gartner's hype cycle concept so eloquently captures, new technologies tend to go through a phase of inflated expectations before diving into the 'trough of disillusionment', which leads to a long slow climb up the 'slope of enlightenment' toward the 'plateau of productivity'.

For internet of things (IOT) technology, the peak of inflated expectations is long past, and we're starting up the slope. In marketing especially, aside from some one-offs, the technology has yet to accomplish much—let alone a revolution. 

Which is not to say that ubiquitous connected devices with sensors and the ability to report back on what they sense don't have potential. The data such devices produce may eventually turn out to be a valuable source of insight about products and the consumers who use them, an aid for marketers trying to nurture end-to-end customer experiences into existence.

But for now, use of such data in marketing is at a nascent stage, Aarti Bharadwaj, APAC practice lead for analytics at Essence, told Campaign Asia-Pacific. "We have heard of brands using this data in certain markets, from the perspective of getting consumer usage insights and identifying moments of receptivity for marketing communications," she said.

One such market is Japan, where Dentsu recently revealed details of a service that uses real-world data from connected home appliances to inform media planning for real clients. The service is certainly the first of its type in Japan, and if similar initiatives using live IOT data are underway elsewhere in the world, the companies in question are being quiet about it. 

Dubbed Domus Optima ('comfortable home' in Latin), the service involves data from about 400,000 Sharp air conditioners, air purifiers, microwave ovens, automatic cookers and washing machines. The users of these appliances opt-in to collection of usage data when they sign-in to a smartphone app, Cocoro+, that allows them to interact with their home appliances. The information collected includes timestamps and data about the appliance functions that the people put to use.

Dentsu is using the IOT data as a source of consumer-behaviour insights and to create target user segments for digital advertising, Shun Maekawa, general manager in the Platformer Data Division of Dentsu's Data Technology Center, told Campaign Asia-Pacific. In addition, Dentsu is using Cocoro members as a panel for surveys that delve into user habits and help verify advertising effectiveness, such as measuring brand lift after campaigns, he added. The company considers the offering to be in a beta phase. 

In one example project involving about 300,000 appliances, a major food manufacturer targeted microwave-oven users via their smartphones, with digital ads for heat-and-serve products that promised an 'authentic' cuisine experience, Urara Hirano, an associate analyst in the Data Technology Center's Contents Data Division, told Campaign. This effort yielded a click-through rate (CTR) 35% higher than a control group targeted through demographics alone, she said. 

In addition, the project revealed that users with higher CTRs tended to own larger, family-sized microwaves and tended to make use of a bread-warming function, whereas low-CTR users tended to use a function for thawing frozen food more often. All these data points could be valuable insights that inform future targeting and messaging strategies for the client, the company asserted. 

Domus Optima relies on Dentsu's Stadia, an existing platform that the company uses to analyse and act on TV-viewing data gathered from smart TVs. Stadia has been around for five years and has played a role in more than 500 campaigns, Maekawa said. In essence, the IOT data becomes another input into that system, which works with ad-delivery networks such as Google Display Network, DoubleClick, Criteo and Yahoo.

Essence's Bharadwaj noted that IOT-enabled devices may not yet be widespread enough to provide much in the way of useful insights. "While it provides good direction for planning for the future, it is not necessarily representative of the large population of users given the limited adoption of IOT technology," she said.

Dentsu's Maekawa agreed that the volume of IOT devices in consumer homes is small for now. But he added that it has been increasing steadily for five years. As the volume grows bigger, the potential impact of this solution for advertisers will become more powerful, he said.