This post, written, by Dr. Augustine Fou (@acfou), Chief Marketing Science Officer for The Advertising Research Foundation is part of our CES-Inspired blog series.  This topic is our second — IoT, Internet of Things.  My related post is here.


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Source:  April 2015

What?  The Amount and Variety of Data Being Put Online Continues to Skyrocket

We are now 20 years into the Internet Age, the period of the most profound and rapid change in data and information in human history. The sum total of human knowledge is being put online and then made accessible to all through communications technologies. New information and data is also being created directly “in the cloud.” This process is not only continuing to accelerate, it is also being further automated to the point that getting information on the Internet is virtually effortless. This means the amount and variety of information will grow exponentially, unabated.

Over the years, it has become so easy to share text, pictures, and videos online via blogs, sharing sites, and social networks that the mainstream public is doing these activities daily. As mobile devices, especially smartphones, have hit majority among mainstream consumers, other forms of data such as geolocation is also being collected and used online for things like Google Maps, but also for targeting advertising. In recent years, as voice command assistants like Siri (Apple), Cortana (Microsoft), Alexa (Amazon) and OK Google! become more mainstream, voices and spoken human commands are new data sets being used in the cloud. And as more consumers use wearables such as Fitbit, Apple Watch, Samsung Gear, and Google Fit, biometric data gets uploaded to the cloud automatically. Finally, more internet-connected, smart “things” like lightbulbs (Philips Hue), thermostats (Nest), and “nanny-cams” will bring new sets of “ambient data” online automatically.

So What?  The Signals from This Internet of Sensors Could Have Radically Positive Impact

This means that the flow of information TO the Internet and FROM the internet will be constantly growing, and the distinction between offline and online will continue to blur. The Internet of Things can be thought of as an Internet of Sensors that bring new and different kinds of data online. But what is more important, according to David Kirkpatrick @davidkirkpatric ) futurist at Techonomy and longtime technology journalist at Fortune, are the “signals” that these sensors collect. These signals can be used at scale to create additional value and efficiencies. For example, a network of connected thermostats can monitor ambient temperature, energy consumption, and whether anyone is at home — and with this data make adjustments to temperature settings and turn air conditioners on and off to optimize for energy efficiency at municipal scale.

Beyond the simple conveniences of connected fridges helping consumers order more milk when they run low or washer and dryers that know when to order more laundry detergent, the Internet of sensors will produce signals that can improve the overall health of a population or detect the spread of infectious diseases, automatically. For example, lead-adopter humans measure their own fitness with biometric sensors; they share this data anonymously to fitness-oriented communities online like Nike+ so they can compare their stats and achievements against other community members. And when there is a surge of people searching for keywords related to the symptoms of the flu, in the same city or region, it is likely that an outbreak is just starting. All of these signals are automatically detectable and usable, without the consumers having to take additional steps, like calling a disease hotline to report it.

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Now What?  Companies Must Find Ways to Create Lasting Network Value Without Walled Gardens

At CES 2016 in the first week of January 2016, we saw the beginnings of the “mainstreaming” of the Internet of Things, from smart refrigerators, to smart toasters, to smart clothing, etc. Many of these technologies remain in their own walled gardens because the manufacturers that make them are attempting to establish an ecosystem which they can own and control, and therefore best monetize. However, just like the Internet itself has proven so far, open source and open network — i.e. interoperability — is a key to unlocking much larger network effects or network benefits. So it may actually take a few more years of “thing proliferation” among lead adopters to reach a critical mass of connected things.

Once this happens, there will be a drive towards interoperability in order to increase the value that can be derived from the network. Once interoperability is achieved, then the proprietary value of individual networks gets diminished and waves of consolidation will follow. Before these future scenarios occur, companies can and should focus on the signals that are available already and run small experiments around creating value that lasts; in other words, for IoT/IoS to continue to proliferate, it must deliver more than simple conveniences. It must deliver value at the network scale, with the assumption that walled gardens are not sustainable long term and that complete interoperability is required to achieve the maximum network effect.

The question is exactly parallel to “How do you make money, when you don’t own the Internet and everything is free [to consumers.]”