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BizReport : Advertising archives : March 13, 2017

Expert: Look to wearables for new ad options

Over the next few years, ad revenue from smartwatches is expected to skyrocket - according to one report the market will reach at least $68 million in 2019. This expected growth means now is the time for brands to build an IoT strategy.

by Kristina Knight

Kristina: Mobile has seen steady growth over the past few years, what is driving this growth?

Michael Fauscette, Chief Research Officer, G2Crowd: Growth in mobile devices have continued at a steady pace despite the perception of market saturation. Several factors drive that, the increasing number of people that want more than 1 device (tablet and smartphone), markets where feature phones are still prevalent and are being replaced with smartphones; and refresh cycles on devices is short and many customers are on plans that make staying on the most current devices practical (at least in the US). Mobile use of the internet continues to increase and some estimates put it around 75% of total traffic. It does seem likely that developed markets in Western Europe and North America will, at some point in the next 2-3 years flatten out. This could accelerate as more homes shift from spending on mobile devices and move to other smart home devices. Developing markets though, seem to have a lot of headroom left.

Kristina: Do you see smartwatch ads as a kind of next-gen advertising option?

Michael: Smartwatch advertising is getting a lot of attention. The concept that users often leave the smartphone in pocket or bag when mobile and use the watch as the interface, means that getting to the watch could help cut through the general noise of ads and elicit a repose. There are several issues with this though, with the size of the screen being the most critical. Messages, SMS, Twitter, messaging apps, etc. using very simple messaging and offers have potential. This could be expanded upon if there is permission to access location, then geo fencing brick and mortar locations and accessing other data though leads to very individualized offers. The other potential is in the combination of an app on the smartphone and the watch. That could drive a much better overall experience. Linking into

Kristina: What benefits would smartwatch ads offer?

Michael: The smartwatch is a more personal device than even the smartphone. It has, like the phone, access to all sorts of data on the individual. With permission (which of course has to be earned or "paid" for), there are lots of opportunities to add value. If the ads are relevant and timely they will be welcomed by most consumers, as long as the permission and trust thresholds are met. Geo based offers have a lot of potential and have increased relevance that consumers will appreciate. The use of other data, like fitness or health data to tailor offers and offer more relevancy is another example of value.

Tags: advertising, G2Crowd, IoT trends, mobile marketing, smartwatch advertising, smartwatch trends

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