Discover the latest internet development after Web 2.0, and find how it has changed marketing environment...5 Sep 2018 146 Views
Written by Yao Zou
Advancement in technology keeps reshaping marketing environment. Web 1.0 was read-only web where marketers created brand contents to reach and maximise influence on consumers. (Hennig-Thurau, Hofacker, & Bloching, 2013) Web 2.0 is interactive web where marketers and consumers co-create brand contents, and consumers share experiences and comments to support or challenge brands’ values and images in the market. (Fournier & Avery, 2011) From Web 1.0 to 2.0, Hennig-Thurau, Hofacker & Bloching (2013) viewed that marketing activities have been changed from bowling games (one-directional) to pinball games (interactive), where marketers lose their control over those activities.
What’s next after Web 2.0? How will it change the marketing environment? Who will be empowered then?
What’s next after Web 2.0?
Internet of Things (“IoT”) has been argued as the next era of web. (Morrow, 2014) IoT is about interconnectivity among smart devices (Lenovo, 2016), which extends connection between consumers-and-marketers or consumers/marketers-and-devices to devices-and-devices. McKinsey predicted that internet would connect around 30 billion devices by 2020 while there were only around 7 to 10 billion connected devices in 2013. (Bauer, Patel & Veira, 2014)
The smart devices need to be embedded with sensors to transmit information through wireless network. Application of IoT could cover wearable devices (e.g. smart watches), smart cars, smart homes (e.g. smart coffee machines), and smart cities (e.g. smart transportation system) etc. (Abashidze & Dabrowski, 2016)
How will IoT change the marketing environment?
- It’s all about CONNECTIVITY.
The primary implication of IoT is about its ability to connect enormously. Verhoef et al. (2017) develops a framework, called People-Objects-Physical Environment (“POP”), to understand such connectivity under IoT.
From perspective of People under POP, consumers can connect with other consumers through various devices (e.g. smart coffee machines) and in various formats (e.g. texts, audios and videos). From perspective of Objects, consumers can interact with smart devices and those devices can interact with other devices with no limitation on distances (e.g. smart coffee machines text your smart watches that your coffee capsules are running low). From perspective of Physical Environment, smart devices can interact with the environment and provide real-time and location based information to consumers (e.g. smart coffee machines ask for your permissions to order coffee capsules from the store nearest your house).
Connectivity under IoT extends connections on social media in Web 2.0. Smart devices could become new platforms for information transmission and sharing. And consumers and marketers would not be the only parties to create and share contents, instead, smart devices could contribute to such content creation and sharing.
- DEVICES or DATA?
Another hot topic about IoT is the prediction of how many devices will be connected. But are those merely devices? Absolutely not, they show potential of vast amount of data to be recorded, sent, tracked and received through internet.
Mcfadin (n.d.) discusses three stages to understand data transmission via devices. First, data are created and sent over internet. Secondly, data are collected, centralised and processed by the network system. Finally, data are disseminated and used. What differentiate IoT from Web 2.0 are the number of devices to link with internet, the extent of interactions and the channel of communication. More connected devices, more interactions with no restriction by locations and more automated exchange of information among devices mean the availability of more data.
Consumers can be more informed and can receive more timely information based on their locations. Oppositely, marketers are able to gather more data (e.g. location, consumers’ needs on timely basis, consumers’ preferences for what and where to buy) from every single use of smart devices.
Who will be empowered?
- Consumers’ Paradise?
Labrecque et al. (2013) defined power as “asymmetric ability to control people or valued resources in online social relations” and discussed four sources of such power to consumers.
The first level is demand-based power and which is the result of accumulated consumer purchasing behaviour. Such power exist before internet but has been reinforced by internet as consumers are able to access to and select more brands according to information from search engines and graphical browsers.
The second level is information-based power, which refers to the ability for content creation and consumption. With the rise of social medias (such as facebook, twitter, instagram and youtube), consumers can express their opinions and create contents influencing brands’ values and images.
The third level is network-based power, which is built upon consumers’ personal reputation/ influence and spread through actions such as content sharing. Each tag, like, dislike, comment or share on social medias becomes a source of electronic form of word-of-mouth, influencing other consumers’ purchase decision making.
The last one is crowd-based power, which gathers, mobilise and organise resources. Crowd-based power allows possibility to form group/community, which then becomes an amplifier of other levels of power.
Under IoT context, the platform for consumers to communicate and interact could extend from social media to smart devices. The extension of communication platforms indicates possibility for more timely and broader reach of consumers and more diversified source of information than what is happening under Web2.0. But such change does not alter the powers that consumers have. Consumers are empowered when they are able to gather more information, to influence how marketers market brands and to direct other consumers’ purchasing decisions. IoT strengthens such empowerment through its powerful ability to connect.
Does that mean IoT would be a paradise to consumers? Not necessarily. More data would bring more choices. Although choices empower consumers by allowing them to shift between brands, human nature does not prefer abundant choices as which would require too much choosing efforts and make consumers unhappy. (Kinjo & Ebina, 2015; Schwartz, 2005) In this sense, it is questionable to what extent consumers would actually utilise their powers. And if they are not exercising their powers to a certain degree, are they still empowered by IoT?
- Marketers’ Nightmare?
It is painful to marketers for unable to be the only source to influence and direct consumers’ purchasing decisions. Worse than that, marketers need to face many challenges.
Fournier & Avery (2011) describes Web 2.0 is about
- the age of social collective, where brands bring consumers together to form communities and marketers facilitate such process;
- the age of transparency, where transparency and authenticity would be crucial;
- the age of criticism, where marketers learn to handle critical and negative comments; and
- the age of parody, where marketers strives to turn consumers’ spoof on brands to advertising.
It is certain that the above elements would still be relevant in the context of IoT. Especially, marketers should not ignore the importance of transparency and authenticity in marketing activities. If not, the spread of criticism would be much faster and harder to control than Web 2.0 given consumers’ empowered ability to connect in IoT.
Will IoT take away marketers’ power entirely? Of course not. Consumers hate being trapped by paradox of choices. On the contrary, marketers love data. Data allow marketers to perform accurate market analysis and open the possibility to provide personalised products or services to consumers. With IoT, the availability of more data means enlarged scope of market analysis, improved accuracy of market predictions, and uncovered possibilities to target consumers in a more personalised way. Moreover, ability to connect ubiquitously under IoT suggests the potential for marketing relevant products or services anywhere and anytime.
In a digital world, consumers prefer to experiencing (CONSUMERS DEFINE MARKETING EXPERIENCE, 2013):
- Immediacy, to interact anywhere and anytime;
- Empowerment, to experience new things as enabled by technologies;
- Personalisation, to receive information or to experience precisely what they need; and
- Simplicity, to interact easily.
If marketers can produce accurate and personalised marketing contents to consumers in relevant locations and through easy communication channels (e.g. smart devices), it is likely that consumers would enjoy such experiences. And great consumer experiences would possibly lower consumers’ intention to extensively exercise their various powers in IoT context. Additionally, how many consumers marketers can influence would depend on marketers’ ability to cooperate with business partners for making their contents available and supported in various smart devices. In this sense, marketers’ above abilities would empower marketers to balance consumers’ empowerment in IoT world.
There is no absolute empowerment under IoT context. IoT presents many possibilities. It empowers consumers by providing broader platforms for obtaining and sharing instant information. Simultaneously, it empowers marketers by allowing big data analysis for better consumer experience. Consumers and marketers under IoT context would be more like players in the game of tug of war, which requires interaction and cooperation and where each party has its strengths. The market environment would be more interactive and complex in the context of IoT. What do you think about IoT empowerment and how should marketers prepare for it?
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Students from the International Marketing and Brand Management program at Lund University are the contributing authors for the BrandBase blog.