The Potential of IOT Reshaping Digital Marketing to solve Decreasing Brand Loyalty

Learn more about the new Object Marketing approach and its power to build truly customer brand loyalty

A world embraced by the Internet of Things: Connected devices, VPAs and gesture interaction are leading to new forms of user interfaces, interaction and communication. That will potentially also have a great influence on the marketing approaches known today.

Kontik, IoT reshapes Digital Marketing — Photo by Alexandr Bormotin

Digital Marketing today is under Serious Pressure

The majority of the worldwide data traffic is controlled by only a few big players [not worth naming here ;-)]. These players are controlling data, advertising networks and some of today’s highly important marketing channels. So users and advertisers have had no choice in trusting the platform owners if they want to be part of modern digital life. But this initial forced trust is melting visibly — in fact it’s transforming in distrust. Fraudulent ads, paid recommendations, fake friends and likes are just representing the tip of the iceberg …

Further, due to today’s overcrowded markets, it is difficult for brands to create deep customer product identification and form sustainable brand loyalty. Online marketing and advertising struggle to reach out to potential customers and create meaningful conversations with users — Marketing Week attested that digital is the least trusted media channel among consumers in our age.

Today digital marketing is inefficient and overwhelming not at least due to ad fraud and fake news. Regarding to a report of White Ops globally $19 billion are lost due to ad fraud in 2018. Also Procter & Gamble’s activities in the 2nd quarter 2017 are even underpinning the ineffectifness of today’s digital marketing: The company says that, cutting more than $100 million in digital marketing spend in the June quarter had little impact on its business, proving that those digital ads were largely ineffective.

A study conducted by measurement company Nielsen found UK marketers are struggling to reach their desired audiences online, with just 47 % of campaigns seen by their target audience. Barney Farmer, Nielsen’s marketing effectiveness director for UK and Ireland, says “Digital was made out to be the ultimate targeting system and measuring platform, but it has not lived up to that.”

And which role digital marketing will came along with, when we enter this highly praised new world where intelligent machines, rather than people, make more and more decisions about what to buy, at what price, and complete transactions without a middleman over a blockchain distributed ledger?

First it means massive new market opportunities for everything from home supplies ordered via “smart speakers” [VPA] such as Amazon Echo [already today] to electricity ordered by smart thermostats, and so on …

Second it raises the question: 
How to build sustainable relationships to customers — in a world where many processes are automated?

Kontik, Digital Marketing Swirl — Photo by Paweł Czerwiński

The Solution is: Technology (of course)!

So, if more and more interactions, where some are already today handled by apps and digital services, will be automated, there will be few direct interactions between a customer and a brand.
But what will stay — in several business cases — is the physical product.

To stay relevant as a brand in the future, it is obvious to me, to foster the realtionship between customer and the physical product. A possible solution for this approach might be, to make every product really unique to the customer — means: giving the product an identity.

It’s clear, that equipping e. g. clothes with sensors or chips is certainly not a new idea. However, in recent years a technological innovation has been attracting increasing attention, enabling this idea to be rethought and opening up several use/business cases: Blockchain technology.

Blockchain technology makes it possible to give objects a unique, tamper-proof identity opening up a completely new marketing channel between brands and customers — called: Object Marketing.
Kontik, All new Object Marketing — Photo by Simone Hutsch

Louis V. Gerstner former CEO of IBM and Geoffrey Colon Head of Microsoft Advertising Brand Studio both attested that IOT will enable instantaneous information on every product — how it’s being used, how much it is being used and how it is performing.

If we think this one step further, and assuming technology will enable us to give every product an identity, further enable customers to interact with their products directly, making them really unique to them — will thrive a completely new form of customer to product realtionship — it will enable a completley new live form of marketing.

It means, all products I own are fully unique. All my interactions and experiences with this product are stored to its digital identity. The hole livecycle of the product is untemperable stored to its identity, e. g. where it cames from and how and who has assembled it, …

The uniqueness of a product and the interaction between its owner could possibly be enabled by an untemparable NFC crypto tag linked to a decentralized digital twin and the owner’s smartphone. A simple product like a jeans sticked to a digital identity can quickly enable a bunch of new use and business cases, and modes of interaction:


Klara meets her best friend Lisa and admires her new jeans. Klara pulls out her smartphone, holding it to the NFC crypto tag of Lisa’s pants. Klara’s smartphone shows her a photo of herself, augmenting the tagged jeans onto her, visualizing how it would look wearing them. She can choose other colors or combine another top she already owns to see how she could combine the jeans with her outfits in her wardrobe.

Klara shares the photos directly with her friends via Instagram and asks the community for their opinion. In the meantime, Klara receives a notification from Amazon: If she orders the jeans via Amazon, she would get one month of free Amazon Prime access. 
Most of Klara’s friends like the black jeans best — Klara orders via Amazon.

Now Lisa promptly receives a notification: her ID has just been used in connection with the purchase of a new pair of jeans. For this product recommendation to a friend, Lisa receives a 15 % discount on her next purchase.

When the delivery arrives the next day, Klara holds her smartphone to the NFC tag on her new jeans to connect to its digital twin. Activation gives her an extended guarantee, invitations to fashion events at her area, automatically storing of her outfit combinations, and truly individual, precise product recommendations.


Object Marketing Rethinks Customer Centricity

Object Marketing is an innovative marketing concept that uses digital twins as an interaction channel between customers, products and companies. This new marketing approach has the potential to offer a completely new customer experience — it offers brands and manufacturers a platform to offer customers first-class UX in order to be able to maintain and expand their brand loyalty. Object Marketing acts on the behalf that brands have to rethink from customer centricity approach to an object centric approach.

Kontik, Rethink Customer Centricity — Photo by Kevin Grieve

Each Product gets an Individual Identity

Object Marketing gives a physical product an uncloneable, individual identity. Depending on the product’s nature, the physical individual identifier can be realized using secure QR codes, NFC Crypto Tags or be directly integrated into the product using 3D printing — I am sure that material science will bring physical integration methods for individual identifier (physical uncloneable functions) for nearly every product class to the market rapidly.

Once the product and identifier have been successfully linked, the individual identifier is then connected to its digital twin, which is mapped on a decentralised database, in a counterfeit-proof manner. The digital twin contains all product-related data generated during the manufacturing process of the physical product. Furthermore, depending on the technical possibilities of the product, all movements or interactions of the physical product are stored in its digital twin. The customer can now use his smart device to link himself to the product and thus to its digital twin. He scans the unique identifier of the product and confirms that he is the owner of the product.

What becomes possible with a Digital Twin

In summary this means: The customer has the possibility to interact over a native application with this service and its product. The customer can document the history of his personal product and any applications. The customer receives relevant context-related information and services from the brand — always related to which products she owns and uses.

Good examples of companies who are already buidling solutions similar to above are Evrythng from New York or Spherity from Berlin.

They are not just empowering their clients customers, they are also bringing a lots of benefits to the brand using digital twins itself. Digital twins enable brands to drive new digital applications, better control their supply chain and expanding their business model with new digital services. Further brands can receive verified product usage data in order to integrate them directly into their product development.

Trusted digital identities, protect brand trust, increase earnings and preempt supply chain integrity problems while building direct customer relationships transforming products into a direct engagement channel to connect with consumers.

Object Marketing and IoT

This new marketing concept has been developed for the emerging Internet of Things. In the age of the Internet of Things, any device, product or machine and even services, software or biological objects can have a digital twin. Decentrally mapped digital twins enable unique product identities, product lifecycle traceability, privacy preserving data sharing, individual services, secure communication and P2P transactions during product usage.

Photo by Andres Urena

This results in many new possibilities for precise and target-oriented services and business models that are individually adapted to the user of a product. Object Marketing uses a unique digital twin of an object as a direct interaction interface between customer and brand throughout the entire product life cycle. Object Marketing offers the possibility to make context-relevant content available to the customer and can adapt fluently to the individual acceptance and scepticism of the customer with regard to marketing or data protection.

From this, the following three core points of the Object Marketing approach can be summarized:

  • Object Marketing offers brands a direct communication and marketing channel to customers instead of relying on intermediaries such as advertising platforms or retailers.
  • Object Marketing enables to transfer values in form of crypto currencies and thus to rethink sales and marketing processes as well as to develop new business models.
  • Object Marketing is highly data protection friendly and GDPR compliant, since the personal data of the customer remain on the respective end device and are not transmitted, if the user does not give permission to.

So, start building ;-) let me know your thoughts and feel free to contact me on www.kontik.de or Linkedin.

Credits go to: Dr. Carsten Stöcker, Dr. Michael Rüther, Nicole Reinhold