The internet of things that go bump in the night: Why marketers are still cautious about connected devices

Philips Hue: An IoT 'product' that wants to be seen as an 'experience'

The rise of the machines has long been a science fiction fantasy, but one day last month we were given a real glimpse of what such an uprising would look like when thousands of apparently harmless digital cameras, video recorders and routers – possibly even yours – were assembled into an army to bring down much of the internet across America.

“$18 baby cams shut down a huge chunk of the internet,” was how John Burbank, Neilsen’s president of strategic initiatives, described it at ad:tech New York. “So if you multiply that by lots and lots of devices and you don’t have security built into them,” he continued, “all these devices start turning into evil little robots.”

The attack knocked out some of the world’s most popular websites – including Twitter, Netflix and Reddit – and was blamed largely on internet of things devices because many come preloaded with soft passwords, making them easy targets for the Mirai malware to render them malevolent. Dyn, the internet gatekeeper which was overcome by the bombardment of malicious traffic those devices generated, said the onslaught “highlighted vulnerabilities in the security of internet of things devices that need to be addressed”.

Notwithstanding the damage such bad publicity might do to consumer confidence, this unwitting weaponisation of humdrum connected devices will also alarm brands who are increasingly beginning to test the viability of the internet of things as a marketing tool. And these are not the kind of headlines the Internet of Things Consortium, a trade association for the IoT marketplace whose members include Fox, Nestle and Belkin, wants to be reading either as it attempts to drive adoption of connected products and services.

To his credit, Ohad Zeira, a board member for the consortium and director of consumer IoT at Verizon, did not shy away from the recent controversy when The Drum grilled him on the topic in New York. “It is real, it is dangerous and the perception is even more dangerous,” he said. “Why does this stuff get news? It’s because it hits that raw nerve of ‘somebody could invade my most private space’. And that’s real.”

For balance, Zeira made the point that the effort required for someone to hack your home and turn your connected lights on and off is probably not commensurate with the payoff. “People put time, effort and money into exploits when they have a path to monetisation [or] political means. Even turning my oven on and off, God forbid, is not really a core motivation for somebody, somewhere to spend a lot of time to get to my house. [But] the perception is real.”

Measurement difficulties

It’s not just perception problems that could make marketers hesitant about IoT. Another big obstacle is how to measure the success of ‘things’ within the context of traditional marketing KPIs. Zeira pointed to the example of working on an automated porch light at his previous company WeMo. The light had a rule to come on 15 minutes after sunset, and go off in the small hours of the morning, without the householder having to lift a finger. “At that point they never have to touch that light switch again. Like literally never. So now I have a device, I’ve created this whole experience, I’ve created the perfect porch light… zero engagement. Did I do a good job or did I do a bad job?”

For as long as there is emphasis on the physical ‘things’, marketers have little frame of reference by which to measure success. “I tend to go towards this definition of the device when it’s more about experiences,” said Kiip’s chief revenue officer, Alison Rayfield, on an internet of things panel at ad:tech. An example of a marketable experience, she suggested, would be the connected breathalyser her company has worked on, which ensures motorists who blow a high blood alcohol level don't drink and drive by giving them taxi credits or HotelTonight discounts on nearby accommodation.

Framing the internet of things around experiences rather than products might make it easier for CMOs to grasp, but more ambitious IoT projects require a significant shift in consumer thinking to go mainstream. During the ad:tech panel, Philips’ senior director of product marketing, Todd Manegold, talked about his brand’s Hue lighting, which reacts to its surroundings and even your home entertainment. As part of a collaboration with the film Sharknado, the Hue lights in your home would turn red when the shark ate someone. You might think an imaginative product like this would be easy to market, but it’s not. “We’re asking people to change the way they invest in the category,” Manegold said. “The historical challenge with marketing [lighting] is it’s completely unemotional. You buy the product you’ve had in your ceiling for the longest time. You replace it with the same thing over and over again. We’re asking you to think about lighting in a different way and create an experience. The experience needs context.”

Context is all about finding the use case which elevates a brand’s IoT play above a gimmick designed as much for PR as UX. As Manegold said: “Amazon Echo’s on pace to sell the number of units that iPhone did 10 years ago. That’s crazy that voice has entered your home, but now you have to make voice relevant to you – whether that’s because you’re ordering an Uber or walking in your home and your lights turn on and your thermostat goes to the right temperature. When we can start to talk about [IoT] as positively affecting people’s lives – either making them simpler, easier, less complicated in this digital age – then we have something to talk about.”

Much as brands may genuinely want to make consumers’ lives simpler, they complicate any such efforts by being so precious over their own ecosystems. The Philips lighting is an example of the kind of proprietary technology which requires data sharing (such as collaborating with content makers), to be experienced at its fullest. As Neilsen’s Burbank explained: “Who owns the data? Amazon is probably the largest collector of IoT data today in the grocery business, and it’s famously not cooperative about releasing any of that data. One of the great challenges is going to be how does all this data get together to make it useful at very large scale for advertisers and marketers? If it’s all fragmented, and it’s little tiny thimbles of data here and there, and it’s very difficult to aggregate it and make it useful, then I think we’ll all be disappointed in the impact of the IoT.”

Real-world walled gardens

It is not inconceivable to imagine a future of real-world walled gardens like the ones that Google and Facebook are attempting to institute online. In this future, "you hand your entire surrounding" to one company, said Zeira. "You could have an Apple Home in that case. But that certainly breaks down when you get into your car, your office, when you’re commuting in a subway system, or engaging with the community at large. We do need that piece of interop.”

Collaborating for the greater good seems a world away right now, but the founder of SharpEnd, the UK’s first internet of things agency, believes brands will get there eventually and likened the IoT’s current state to the early days of mobile payments. “Every company tried to create a walled garden in the beginning,” said Cameron Worth. “This just slowed down progress and adoption. Payments only began to move when the suppliers moved forward together. We see IoT, and in particular the connected home, sharing the same painful path. It doesn’t help when there's about 8 million platforms too.”

You might be a CMO thinking that all this hassle isn’t worth the reward. But that would be to miss the point. “The services and experiences that can be delivered through data-driven AI, whether they’re predictive, contextual, whatever they may be, are going to be magical, we’re going to want them as human beings,” said Zeira. “So it’s not a matter of whether the data gets exploited in order to do that; it’s a matter of how the data gets exploited in order to do that.”

Among consumers at least, there is some willingness to share data in return for convenience. A Mindshare and SharpEnd research project, Everyday Connects, saw the two agencies carry out a survey of attitudes among 1000 UK smartphone users as well as build 10 connected product and packaging protypes to trial in five households for two weeks. Some 62% of their respondents said connected products can collect data if they get something of value in return.

As Worth pointed out, even if you don’t think you have a horse in this race, you probably already do. “If the Amazon Echo in someone’s house is learning preferences, such as purchase frequency, then what stops it from one day suggesting a competitor based on the fact it can be delivered quicker? Can you be 100% sure that the consumer will stick to your brand in spite of convenience in this scenario?”

Marketers better be ready because – for good or ill – the rise of the machines is no longer the stuff of science fiction.

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Cameron Clarke

Cameron Clarke is The Drum's Deputy Editor, and has covered the marketing industry for the title for a decade. Based in the UK, he is now primarily responsible for commissioning and editing The Drum's opinion coverage. He also writes features about brands with unorthodox approaches to media and marketing, such as Brewdog, Patagonia and De Correspondent.

All by Cameron