How to mine the upcoming gold rush of wearable data

wearable wrist

 

Like early-1800s railroad engineers trying to figure out the optimal width for track gauges, gadget makers in the 2010s are frantically experimenting with wearable technology. Nike put a “+” sports sensor into sneakers. Google launched Glass heads-up eyeglass displays. Disney research labs has announced Touché, a technology that can turn any surface — clothing, water, your leather couch — into a touchscreen sensor. Reebok has headgear that tells football players when they’ve taken too big a hit. Wearable is the new gadget gold rush.

Some say it won’t happen. Humans will have to get comfortable walking around with tech, and there have been some stumbles in design (Bluetooth earpieces are still uncool, and Google Glass has yet to overcome the image of Robert Scoble wearing it in the shower). The convergence of humans with technology faces the barriers of evolutionary aversion, as we recoil from the Uncanny Valley of humanoid-looking creatures that aren’t really human, to the social barriers of us accepting our friends are with us but completely checked out.

But, like the locomotive, we believe you can’t stop this wearable train. ABI Research, which monitors such things, predicts seven types of wearable technology are coming: heads-up display glasses, cameras, clothing, healthcare monitoring, sports monitoring, 3-D motion detectors, and watches. Beyond wearable tech, others suggest human tattoos could have embedded computers and connectivity. And beyond our bodies, self-driving cars, self-monitoring homes (Google is buying Nest smart thermostats for $3.2 billion), and self-flying drones are all pushing the Internet of things to every device imaginable.

This is really nothing new. As we’ve noted before, humans have been part-cyborgs since the invention of leather shoes. You embed your body with technology every day in the form of clothes (expansions of your skin), cars (rolling metal exoskeletons), and memory (what is Google Search if not an expansion of our minds?). Eyeglasses, dental fillings, wristwatches, pacemakers, iPods, and houses with roofs are all extensions of our bodily defenses, senses and biological movements. Given our evolutionary adoption of mechanical and information systems to make us move and think better, it’s predictable that in 100 years we’ll have contact lens heads-up displays and Google whispering in our ears. It’s a no-brainer.

What does this mean for marketers?

The hidden question is not what the gadgets will look like; rather, it’s what the nimbus of data surrounding all these tiny embedded devices will do to human social behavior, politics, marketing and commerce. All of this technology will collect, share, and output trails of information. Marriages may falter and the NSA may get even more publicity based on these waves of personal data trails, but for now, let’s think of the implications for marketers.

Marketers exist to influence consumers, and wearable tech poses a threat to that mission: As data streams proliferate, consumer attention will be even more distracted, and the opportunities to intercept communications will become more fleeting and devalued. Just as the web has decimated newspaper advertising, and mobile threatens to undermine the web, wearable will be the next tsunami of vast inventory that squeezes content publishers’ advertising monetization. If you think the web is awash in bloated ad inventory, imagine the world where all of the 5,000 products each consumer owns begin gathering, sharing and broadcasting data.

Wearables will push communications inventory to near infinity. 5,000 products per consumer could broadcast 100,000 impressions a day, and no one will stomach that amount of intrusion. Unless marketers provide new utility in all of those wearable, touchable, object-driven media touchpoints, they will fail to gather attention. 

The 4 new data uses from wearable tech

While some wearable technology may have screens for standard ad impressions, we predict the vast majority will be too small — and consumers will rebel against traditional ads there even more than they do on today’s business card-sized iPhone screens. However, the data from wearables will provide four new dynamics that marketers might leverage to find an influence path in to consumers:

Anticipation — The most important form of data from wearables will be predictive modeling algorithms that anticipate what you want next, because for the first time humans will be tracked in the physical, real-time world. This predictive modeling will go far beyond current behavioral monitoring, CRM crunching, or RFM models (which are current crude marketing techniques that use a tiny portion of your past behavior to try to guess what you’ll want next). An iWatch or Google Glass or e-tattoo that is always on and tied to your search and social-sharing behavior can monitor your speed, pulse, movements, location, purchases, interests, needs, and relationships. Push this data stream forward, and for the first time, marketers will be able to immediately anticipate what consumers want. Google will know that you are hungry for sushi before you do.

Redirection — This is a current huge gap in all of today’s marketing: how to redirect consumers when they near the actual point of sale. When you walk into a mall, there is no promotional ping telling you to turn right instead of left. When you are at the grocery store, no AI simulation reminds you that your spouse wanted you to buy more milk. But with Internet-connected devices embedded into the fabric or skin of our bodies, marketers will be able to provide useful nudges that actually redirect purchase behavior when consumers go into the final shopping mode. This may sound Orwellian, but if played right, the utility could be enormous. Imagine walking down a crowded street in New York City and missing your old college friend walking the other way. Wearable tech could redirect you to see her … or similarly redirect you to find exactly the product you want, when you didn’t know it existed on the shelf directly behind you.

Cross-channel integration — Cross-channel marketing attribution is a buzzworthy concept today, but it’s mostly BS. (The trouble today is most attempts to track how different media channels work together to influence consumers measure just a fraction of the life of a human being. Online, marketers use software to track the paths consumers take to a web conversion, but this misses all offline touchpoints; offline, statistical regression analysis takes broad swaths of events to see if TV exposure lifts paid search results. All are clever, and all are amazingly rough models.) Wearables, however, could solve this. Gadgets in your clothes or skin could track exposures to all media as well as physical objects, environmental context, and the people around you. A map of every touchpoint around you would allow marketers to understand what really works, in what sequence. This also might sound creepy … until you realize it could remove unwanted ads and give you promotions for what you really want next.

Risk aversion — This may be the most interesting use of wearable technology data, because it would ameliorate consumer fears over privacy. Yes, people may freak out about the idea of all devices monitoring their behavior; the solution will be to use that data to give consumers real benefits that far outweigh any marketing intrusions. Contacts that help consumers avoid risks would be first. Imagine traffic alerts provided by Ford; food health counseling in your fridge from Pepsi; reminders for you to help your son study for next month’s SAT tests from a nearby college; a nudge at the mall to buy your wife a present before Valentine’s Day from Hallmark. Much of consumers’ impulse to buy is actually avoiding a risk of failure, the disutility of missing an opportunity. (This is why Black Friday is so popular: consumers don’t need what’s on sale at the mall, but they fear missing the opportunity of a sale.) Marketers who use the new, more personal touchpoints from wearable technology to minimize consumer disutility may be respected enough to be invited in for advertising messages as well.

Marketers will need to offer new, unexpected value in the looming landscape of millions of communication streams on every product, bit of clothing, and nearby wall. The inventory of media impressions is about to approach infinity, and the definition of media is about to be expanded to “everything.” If brands don’t offer real benefits in this wearable, touchable world of technology, they will be shut out.

One thought on “How to mine the upcoming gold rush of wearable data

  1. I think if businesses focus on being useful they can over come privacy issues. The problem is brands and advertising agencies focus on brands and clients vs customers. I finally allowed my smart phone to always be GS enabled. Not because that offered me any benefit in terms of push contact from businesses and brands. I just tired of enabling it to use services on demand. Personally I prefer to drop off the grid if I could not be impeded when i need the gps.

    I remember when Eric Schmidt justified the Ad Mob purchase for Google with really the dumbest reason I have ever heard from someone supposedly smart (pro managers are not visionaries…founders are visionaries as Apple and Google proved) He said ‘We bought the mobile ad network so when you are sitting in traffic on your way home, we can send you an ad for a pizza because you are thinking about dinner’.

    Well that benefits not the user but Google and the Brand. benefiting the user would be ‘so are you staying in or going out?’ What are your favorite foods? What are your favorite restaurants maybe one has a deal for you’

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