As the digital world was growing against the physical, marketing budgets in both big and small companies began to be split between the two. The notion of digital marketing - i.e. any contact with consumers that happens over the internet - has grown into an industry in and of itself, and it now accounts for some 35% of the average marketing budget. In fact, US digital ad spend surpassed that of TV this year and is expected to dwarf it by around 25% by 2020.
Separating marketing budgets into digital and traditional will one day be a thing of the past, though, a crude misunderstanding of what exactly digital advertising is supposed to achieve and where the industry is going. At this point, marketers will be well aware of the importance of a focus on mobile, but the growth of new technologies - namely the Internet of Things - will provide opportunities for connection between a brand’s digital experience and its physical presence.
The use of mobile devices now far outstrips that of desktops and this trend will only continue, so the opportunities for connection between the digital and physical commerce experiences are numerous and growing. For some time, marketers have been able to deliver varied experiences on mobile through apps, emails, and video content, etc. These are engaging, though they largely begin and end with the mobile device, and the next stage for mobile marketing, which many are already embracing, is one in which the mobile device augments the real world.
QR codes are an early and relatively crude example. A mobile user uses their camera to identify a branded QR code and they receive a piece of content or promotion specific to that QR campaign. Another example would be location tracking that detects when a customer is in store and delivers offers to their mobile device. Both of these offer clear value to the customer as part of a tradeoff from which the business receives customer data and can improve loyalty. Brands should be experimenting with and implementing experiences like this, which overlay digital marketing onto the real world to improve the customer journey. But even so, in a world soon to be flooded with connected devices, even these previously unimaginable techniques will be considered simplistic.
What the mobile device will eventually become, as put by Marketing Week, is the ‘remote control for the IoT.’ By 2020, the connected devices that make up the IoT will number around 26 billion - a number that excludes smartphones, tablets, and laptops - and consumers will interact with them through their phones. For retailers, this means innovative extensions of the location services exploitations already in use, real-time promotions and loyalty bonuses, and mobile payments. If a retailer had the option of beaming a short product demonstration to a customer’s app whilst in store, the opportunities for better sales would be great, and the customer experience could be improved. Also, the opportunities for data collection are incredible, something all brands will be keen to explore as the technology grows.
And the Internet of Things can be used in other, more diverse ways to improve efficiency and better understand customers. Fitting sensors in a physical store can give companies accurate information on the journeys customers make through the aisles and how this influences their buying habits, information that can be invaluable in improving the in-store experience. In fact, already a plethora of industries have demonstrated that sensory equipment and other connected devices can streamline processes and improve customer experiences. As the technology develops and becomes widespread, the true potential of the IoT will come into focus. The physical and digital experiences needn’t be separate - rather, companies should be bringing them as close together as possible.