An estimated 50 billion devices will be connected to the Internet by 2020, resulting in an avalanche of machine-generated (M2M) data streaming into data storage centers around the world. This Internet of Things (IoT) explosion will require companies to abandon conventional ways of storing and analyzing data and adapt to the changing needs of business in an IoT world. The advertising industry in particular will gain much by successfully implementing IoT-centric solutions as part of its data-collecting initiatives, as mobile is quickly becoming the primary platform for many of its targeted demographics.
Companies have an in-depth understanding of how to use technology to reach their customers, and are becoming increasingly clever about how to leverage information extrapolated from online profiles and data provided by their advertising suppliers. Take, for example, a consumer who views an online ad that reflects his interest and later receives a text advertisement for jeans on sale minutes before he walks by The Gap at the mall. But the IoT, along with the expanding universe of connected devices, will take data gathering to a whole new level and represents a logical evolution in advertising.
But how exactly can – and should – advertising companies make sense of the IoT to deliver the type of insights their customers need to measure the performance of their marketing campaigns?
Before looking at how companies will make sense of advertising in an IoT world, it is important to understand the magnitude of the complexities they face today. The days of direct cause-and-effect attribution of advertising have long past. The landscape has become much more complicated, and even though the sophistication of measurement tools has increased dramatically, large challenges remain.
Take, for example, performance-based mobile agencies. These agencies can achieve higher conversion rates for mobile offers through attribution analytics solutions, which help them quickly and accurately track their sales. In this model, the degree to which the attribution itself is accurate and accepted becomes critical – and while there is a lot of science, there is still a great deal of art involved. Obvious correlations may be identified, but it is increasingly difficult to understand the influence of a television ad from last night, versus the billboard on the highway, versus the logo on the shirt on a guy in an elevator. Though it is unlikely we are going to get to the perfect science, the industry is moving to understand, as clearly as possible, direct and indirect (“assist”) attribution.
This is becoming the realm of the data scientist. When you think about the vast array of combinations and monstrous amounts of associated data between online, mobile app, TV/DVR, print, and other forms of advertising, making sense of this data becomes daunting. Traditional business intelligence tools are generally good at helping to understand what is going on. Often referred to as operational analytics, these are the dashboards and key performance indicators that get better with the increasing granularity and availability of data. But what BI dashboards alone do not do, and what is absolutely critical in allocating advertising dollars and optimizing marketing strategies, is providing the answer to why certain things happen or what is likely to happen in the future. Investigative analytics and predictive analytics, therefore, are two vital extensions to the analytics platform in a multi-channel advertising world.
When conducting investigative analytics, the key is the ability to mine through mountains of data while continually iterating on the questions being asked. The answer to one question generally informs the next question. In investigative analytics, strong ad hoc query and data discovery capabilities are extremely important. This assists the statistical analysis and the shaping of predictive analytics exercises to provide insights as to what is likely to happen and ultimately drive more effective marketing strategies, including media allocation.
Advertising in an IoT world extends the scope and reach of the data. Now, in addition to exploring click streams (browser, social media) and devices (laptop, tablet, mobile phone), you can begin to layer on additional data points from set-top boxes, credit card purchases, geo-fencing of outdoor advertising, radio broadcasts, and print media. To take that another step further, you can include location-based information from connected cars, potential advertising in those cars, usage and potential advertising from appliances (an ad on your refrigerator), and data from digital signage on public transportation.
The ability to conduct analytics on this breadth and depth of data will be a huge competitive advantage for advertising platform providers as they jockey to position themselves as best able to deliver high-performing campaigns. In a world filled with massive amounts of dimensional data, the ability to do complex segmentation and analysis in real time can have a direct impact on the bottom line.
One thing is certain: the challenges associated with multi-channel marketing will only get bigger with the IoT as the amount of data and data sources grow, and the tools and techniques applied to these challenges will only increase in importance.
Don DeLoach is CEO and president of Infobright and a member of the Data Informed board of advisers. Don has more than 25 years of software industry experience, with demonstrated success building software companies with extensive sales, marketing, and international experience. Don joined Infobright after serving as CEO of Aleri, the complex event processing company, which was acquired by Sybase in February 2010. Prior to Aleri, Don served as President and CEO of YOUcentric, a CRM software company, where he led the growth of the company’s revenue from $2.8M to $25M in three years, before being acquired by JD Edwards. Don also spent five years in senior sales management culminating in the role of Vice President of North American Geographic Sales, Telesales, Channels, and Field Marketing. He has also served as a Director at Broadbeam Corporation and Apropos Inc.
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