3 Ways the Internet of Things Has Already Changed Digital Advertising

As digital advertising evolves, businesses seek new ways to engage with consumers and
create more effective campaigns. One of the most significant shifts in recent years has been
the impact of the Internet of Things (IoT).

According to a report by IDC, there were an estimated 31 billion IoT devices in use worldwide
in 2020, projected to grow to 75 billion by 2025. This massive growth presents both
opportunities and challenges for advertisers.

On the one hand, IoT devices provide a wealth of data that can be used to create more
personalized and targeted campaigns. On the other hand, the IoT revolutionizes traditional
advertising, connecting outdoor devices to advertising platforms and serving dynamic ads out
of the home.

In this article, we’ll delve into how the IoT has already changed digital advertising and share
expert insights on how businesses can make the most of this technology to improve their
advertising efforts.

The First Way: More Sophisticated Data Collection & Targeting

IoT devices generate mountains of data, which advertisers can use to understand consumer
behavior and preferences better. They can gain insights into user behavior and preferences
from IoT devices like wearables, smart home devices, and mobile phones. With this
information, they can craft ads that target users more personally, leading to higher
engagement rates and conversions.

For example, imagine receiving an ad for sports apparel that perfectly aligns with your
exercise habits, thanks to your fitness tracker. With IoT data, this level of personalization is no
longer just a pipe dream for marketers but a reality they can tap into to drive sales.

IoT also creates a handful of new opportunities to target users contextually. For instance, a
smart refrigerator that detects a user is running low on a particular food item could display an
ad for that item when the user opens the refrigerator door.

Similarly, smart home devices that collect data on a user’s environment, such as temperature
and lighting, could be used to deliver ads relevant to the user’s needs. With IoT data, ads are
no longer just random shots in the dark but tailored messages that users are more likely to
pay attention to.

The Second Way: Digital Out-Of-Home (DOOH) & Dynamic Ads

Digital out-of-home (DOOH) advertising is another way IoT transforms the advertising industry.
DOOH advertising refers to digital advertising displayed in public spaces, such as digital
billboards or screens in shopping malls.

Picture this: you’re walking down a busy street and see a digital billboard advertising the
latest smartphone. But wait, this isn’t any ordinary billboard – it’s an intelligent billboard that
uses IoT sensors to gather data on the demographics of people passing by. Suddenly, the
billboard displays an ad more personalized to your age, gender, and interests.

The dynamic nature of these ads leads to better results than just using traditional billboards or
even online ads at some point. A study by Ocean Outdoor found that 71% of consumers say
digital billboards stand out more than online ads, and 63% say they are more memorable than
traditional billboards.

With IoT technology, DOOH advertising can interact and respond to its surroundings. Digital
screens in a shopping mall may use facial recognition technology to display ads that change
based on the facial expressions of people passing by. If you’re sad or bored, the ad might
change to something more entertaining or humorous to cheer you up!

The real-time data integration capabilities of IoT are also revolutionizing DOOH advertising.
Advertisers can target users based on weather and traffic data to display ads for hot coffee on
a cold and rainy day. Or, a digital screen that uses location-based data to display ads for
nearby stores and promotions.

The Third Way: Interactive & Augmented Reality Ads

IoT devices are unmatching in terms of interactivity. Even though some of these examples
might not be the typical case now, we await more creative approaches to engage users with
OOH advertising in the future.

For example, a brand could create a conversational ad that asks users questions about their
preferences and then recommends products based on their answers. Similarly, a beauty
brand could create a smart mirror that allows users to try on different makeup looks and then
purchase products directly through the mirror.

Buzzed augmented reality (AR) technology can also be applied here. IoT devices like
smartphones and smart glasses enable new AR advertising forms that give users a more
immersive experience.

A furniture brand could create an AR ad that allows users to see how a new sofa would look
in their living room. Similarly, a car manufacturer could create an AR ad allowing users to
explore a new vehicle’s features in 3D.

To summarize, IoT is transforming digital advertising beyond traditional targeting and data
collection. With the advent of interactive and AR campaigns, dynamic campaigns, and digital

out-of-home advertising, brands have unprecedented opportunities to engage with customers
in immersive ways.

By leveraging IoT data, brands can create more personalized and effective advertising
campaigns that resonate deeply with consumers. In addition, as IoT continues to evolve, it will
provide even more insights into customer behavior and preferences, enabling brands to stay
ahead of the curve and remain competitive in a digital landscape.