Carphone Warehouse and Dixons merger has “bright future” and signals speed of internet of things revolution, says IAB chief Guy Phillipson

Carphone Warehouse and Dixons Retail’s £3.8bn merger, unveiled today, signals the speed at which the 'internet of things' is evolving, with the combination of companies likely to have a “bright future”, according to IAB CEO Guy Phillipson.

Speaking to The Drum at the IAB’s Mobile Engage event in London today, Phillipson said that the merger marks a “significant” development in the retail and mobile landscapes.

“The internet of things is a fascinating development but it’s important to remember that mobile is at the centre of it – mobile is the controller of the internet of things, and that shouldn’t be forgotten. What’s important for advertisers and manufacturers is that [mobile screens] are obviously where it is easier to consume advertising, rather than on a wrist band or shoe,” he said.

The coming together of Carphone Warehouse and Dixons, which is expected to increase its presence in the internet of things market, marks a major step in both companies' digital journeys, according to Phillipson.

“Ten years ago when I joined the IAB I visited the marketing directors at Dixons, Curry’s and PC World and the extent of their digital activity was affiliate marketing, which had very low risk for them. They have both come a very long way and the future is bright for this new combination,” he added.

The two companies will need to focus on ensuring their omnichannel journeys are aligned and seamless, with commissioning structures thrashed out for new kinds of services like ‘click and collect’ – something John Lewis has already cracked, he explained.

Meanwhile the internet of things could result in a rise in sponsorship opportunities as the main form of advertising for brands, with connected “activities” likely to offer compelling ways to reach consumers, according to Phillipson.

However, he said that as with all areas of digital, there is at first a level of hype to overcome before we will see what areas or developments will stick. “In the digital industry there is always a peppering of hype versus reality, and some developments are going to become common behaviours and others minority sports,” he added.

Referencing the IAB’s mobile audit, published today, he said he was “highly confident” that the figures will be far higher next year, and added that the pot of media investment for advertisers continue to grow.

“If you think that the one thousandth biggest advertising spender is a small airline and it’s £1m – that’s a sizeable spend.”

Next year the synergy between branded content and paid media, and how the two can be used in tandem to create new audiences, will be a trend to watch, according to Phillipson.

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