The future of one-to-one marketing

Ian Karnell, President & Founder | One to One Interactive
January 30, 2003

Overview

It is hard for many people today to look back and think about a time in which the Internet was not part of their every day lives. Today, more than 60% of American households have computers and access the Internet through broadband modems that deliver streaming video and audio. Computer processing power continues to increase daily and wireless technologies are exploding. Tomorrow, computers are going to be absorbed by their surroundings: embedded in everything that makes up our environment (walls, carpets, toasters, neckties and even our own bodies), all networked through wireless wide-band radio frequencies.

According to Forrester Research, scientists suggest the earth will be wrapped in a 'digital skin', transmitting signals over the Internet almost as a living creature relays impulses through its nervous system. They refer to this as ubiquitous or pervasive computing. As a result, society will witness an unprecedented level of connectivity that will transform the Interactive marketing landscape. This paper is the first in a series of articles to be published that will explore the future of Interactive marketing and how marketers, today, need to begin preparing for this future.

One To One sees three waves of innovation that will converge and provide the foundation for the next evolution of One-to-One marketing. They are:

1. Wireless networking
2. Smart Devices
3. Intelligent Communications Services

Wireless Networking

Wireless Fidelity (Wi-Fi) devices and networks promise to provide the foundation for ubiquitous access to the Internet, other computers, and wired networks. Today, Wi-Fi Networks can be found in only a handful of coffee shops, hotels, airports, and homes. Approximately 2 million mobile surfers in North America already use Wi-Fi devices, and Gartner Inc. expects the number to double by next year.

Although just rolling out now, Wi-Fi devices and networks will see rapid growth in the next 5 years (see chart below).



As Wi-Fi devices and access points become more pervasive, the Internet's reach will become more ubiquitous. Forrester believes that, as a result, the Internet will be transformed into an information utility where corporations, individuals, and governments will access and interact with information anywhere, anytime and with any device.

Smart Devices

Ubiquitous access to the Internet will spawn a new era of innovation in access devices and information-powered devices — 'smart' devices — that will enable corporations, individuals, and governments to explore new ways of utilizing Internet-based information and networks. These 'smart' devices will be embedded into most everything (watches, carpets, toasters, neckties and even our own bodies) and have persistent access to the Internet.

Most recently, at the 2003 Consumer Electronic Show in Las Vegas, Bill Gates unveiled the first line of personal accessories based on Microsoft's Smart Personal Objects Technology (SPOT), which was designed to 'enhance everyday devices through easy-to-use software'. Demonstrating this, Fossil Inc., Suunto and Citizen Watch Co. Ltd. unveiled an advanced new generation of watches built using SPOT. With compelling features such as customizable watch faces, access to personal messages and appointments, and the ability to receive up-to-date news, traffic, weather and sports information, the watches, expected to be available in fall 2003, are the first wave of smart objects that extend the power of personal computing in a 'natural — and fashionable — way'.

Furthermore, advances in remote sensing in the form of radio frequency identification (RFID) tags and readers will give these 'smart devices' the eyes and ears they need to observe their physical surroundings and transmit and receive data. Sensors will detect physical changes and then send a signal to a computer that will initiate a response. Scientists expect that billions of these devices will someday form rich sensory networks linked to digital backbones that will extract volumes of information.

Ernst & Young predicts that by 2010 there will be nearly 10,000 'smart' devices for every person on earth.

Intelligent Communication Services

In the near future, people will take for granted that microwave ovens download cooking instructions from the Web. Smart fridges could monitor tagged products, learn your food preferences and shopping schedule, and eventually buy all your groceries for you. Tagged pill bottles in a medicine cabinet could allow doctors to monitor patient compliance with prescriptions, remotely. Marketers will track products and product usage from razor blades to tuna cans remotely. Integrating 'smart' devices with the Internet will lead to a new era of 'intelligent' marketing and 'intelligent' communication services.

Marketers' approach to the four P's — product, place, promotion, and price — will need to go beyond traditional brand or point-of-sale marketing to accommodate the speed at which a consumer will use information to make a decision, including time-based coupons, instant freebies, and customized bundles. 'Intelligent' communication services are the middle-ware platforms that will enable marketers to track consumers and devices and deliver 'intelligent' marketing that is real-time, proximity-specific, and ultra-personalized. Companies like PanGoÊhave sprung up to begin building these 'intelligent' communication services.

 

Beyond the future:

Eventually, future e-markets could become so complex, with so many participants and competing market variables, that human oversight would be a hindrance. Researchers and software companies have set high hopes on so-called software agents, which learn about their users' interests and act independently on their behalf. IBM researcher Jeff Kephardt describes the 'autonomous' e-markets of the future as 'a seething milieu in which billions of economically motivated software agents find and process information and disseminate it to humans, and increasingly, to other agents'. Agents will evolve from facilitators to decision-makers, while their degree of autonomy and responsibility increases with time. Ultimately, he predicts, transactions among software agents will become an essential, and perhaps even dominant, portion of the World economy.'

Conclusion

Since the commercial inception of the Web in 1993, marketers have made great strides in leveraging the interactive channel to, among many other things, deepen customer relationships, introduce new products and brands more quickly to the marketplace, and expand into new global markets. Like no other time in business history, marketers were empowered with real-time data that delivered deeper insights into customer behaviors, experiences, and motivations. Today's marketers are leveraging customer data to customize customer treatment, and strengthen the bond between the customer and the company through both traditional online and offline channels. Tomorrow's marketers will need to prepare for a time when there is no distinction between marketing online and offline. Marketing, like computing, will be ubiquitous. As Wi-Fi becomes more pervasive, 'smart'-devices become integrated with our lives, and 'intelligent' communication services provide platforms for real-time, proximity-based marketing, marketers will needto become adept in:

• Delivering proximity-based user experiences
• Implementing proximity-based user segmentation modeling
• Delivering real-time customer and device personalization and messaging
• Managing large volumes of consumer and device interaction data
• Interfacing with personal digital agents

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