The Future of Electronic Advertising

As wearable technology becomes more commonplace, marketers need to find new ways to get their messages across.

Online, marketers can track people’s interests through the pages they visit, how long they stay and what products they search for.

But what happens when the shopper is in the store? How do you track what they’re looking at, which displays are eliciting a response? Wearable technology, experts say, is filling that void.

“It’s a way for us to understand the offline world,” says Scott Amyx, managing partner at Venture1st, CEO at Amyx+ and a wearable technology expert. “The online world is pretty well known. Offline, we go into a blind spot.”

The proliferation of wearable technology has created both opportunity and challenges for marketers. On the one hand, they have a captive audience whose devices are on or near – or in some cases, even in – the body. That, however, makes timing, and the message itself, all that more important.

“People have just seconds for their attention to be captured,” says David Daniels, CEO of Boston-based digital marketing agency The Relevancy Group. “If you think about a wearable device like an Apple Watch, it’s so much easier for people to just swipe to the left and get rid of that communication altogether.”

Wearable advertising is estimated to reach $68.7 million by 2019, up from just $1.5 million last year, according to a report from Juniper Research.

Crafting a marketing strategy means understanding the person wearing the wearable, experts say, and there’s plenty of data in order to do that. GPS tracking means retailers can send messages to customers when they’re close to one of their stores. Once in the store, fitness bands and smartwatches can measure variables in the wearer’s body metrics, for instance, to show when they’re excited by something they see.

“If I’m wearing my smartwatch, and I happen to be shopping at a store, it measures a change in my metrics,” Amyx says. Those changes, however subtle, can give insight into customers’ reactions to displays and other in-store promotions, which can later be used to tailor future marketing outreach. Amyx’s firm is working with a Japanese food company, for instance, to determine how to use wearables to increase sales volume. “Wearables are different,” he says. “It’s on, near or inside the body.”

It’s not just watches, however. While smartglasses make up only a small part of the wearables segment, a study by Adobe Digital Index finds that eyewear, Google Glass in particular, is the fastest-growing Web-access device, jumping eight times in five months. Wearers are surfing the Web with their glasses, and most are heading to media and entertainment sites, with sports as the most popular content.

For promotional products suppliers, wearables themselves can be great marketing tools.

“It gives them something interesting to sell, something different,” says Vito Ciaravino, president of Intelligent Galaxy (asi/62731) of Brewster, NY, which supplies smartwatches and fitness bands to customers. “It’s an exciting area, but it is a technically challenging area.”

Alfred Goldberg, president of digital marketing agent Absolute Mobile in Tampa Bay, FL, says success means integrating all of the data that’s collected into one space for users.

“We need some infrastructure to make data integrate with more solutions,” he says, “rather than just have a one-off app, a FitBit solution and another app for some other solution.”

Daniels, of The Relevancy Group, says marketing strategy still has a way to go before it fully embraces wearable technology. “There are certainly creative applications for marketer productivity,” he says. “Salesforce and marketing cloud-type organizations are extending functionality of their apps to be more productive in the field, or at least have access to their analytics. From an integrative perspective, to directly market to consumers, it continues to be an extension of what we’re doing with our mobile phones.”

Lee Co., an 850-employee residential and commercial services company in Tennessee, recently rolled out one of the largest wearable technology programs in the country. Five hundred of the company’s service technicians are now out- fitted with Vuzix’s M100 smartglasses, equipped with software from provider XOEye. Another 300 employees will receive the glasses in the coming months.

The glasses allow real-time communication with technicians, streamline service tickets and enable remote support for technicians that are on the job.

Lance Anderson, vice president of enterprise sales for Rochester, NY-based Vuzix, says there’s another benefit to incorporating the smart glasses: marketing to consumers. Technicians can record problems in real time, send those videos to customers and walk through service recommendations. Sales of those services are up tremendously since the program began, Anderson says. “These drive top-line value to them,” he says. “The layers of the onion are starting to peel back.”

Putting Wearable Data to Use

Companies are emerging to answer the question: What do you do with all the data?

You’ve been using a fitness tracker to log meals, but in the past several days you haven’t input any information. Suddenly, you get a message offering meal planning tips or an offer from a healthy mealdelivery service.

As fitness trackers have moved beyond simply counting steps into collecting more advanced data such as glucose levels (like Abbott’s FreeStyle Libre Flash glucose monitoring system, currently available only overseas) and sleep patterns, new opportunities have arisen for putting that data to use.

“The most benefit that any wearable device user will get is getting smarter with their data. That will be at the forefront,” says Zeeshan Hayat, CEO and co-founder of Prizm Media, a Vancouver, Canada, health-care marketing agency developing an artificial intelligence platform that links wearables data with health-care organizations.

Shipments of wearable fitness devices reached an estimated 68.1 million units last year, and are expected to leap to 91.3 million units in 2016, according to a study by Gartner Inc. Most of those devices will be wristbands or watches, but there’s a growing market for smart garments as well.

Yet a survey by Endeavour Partners found that more than half of U.S. consumers who have owned an activity tracker no longer use it. One-third of those stopped using the device within six months of receiving it. “The industry has been really struggling with how to create a lasting benefit for consumers,” says Dan Ledger, a principal and wearables expert at the consulting firm.

Programs like MyFitnessPal and Exist work on the consumer side to help track data. On the health provider side, organizations are forming partnerships like that of Polaris Health Directions, a Pennsylvania behavioral health company, and New Jersey’s MD Anderson Cancer Center. The two agencies recently launched a pilot project to capture data from breast cancer patients who have been provided Apple Watches.

“The impact of the integration of behavioral health in cancer care is significant,” cancer center Director Dr. Generosa Grana said in announcing the program. “A positive frame of mind can help a patient through all phases of diagnosis and treatment. Patient engagement is a critical factor in successful treatment plans. We expect using the Apple Watch will help increase engagement and collect data that ultimately allows us to further refine treatment plans.”

At Prizm, the goal is to connect patients with chronic health conditions with companies that can provide services, such as prescription home-delivery services. Knowing when to connect customers with offers will be key in its success, Hayat says. “Relevancy and timing is important,” Hayat says. “You want to deploy these messages at the right time, when it’s relevant.”

Who’s Wearing Wearables?

The wearable technology market continues to grow, with analysts expecting more than 150 million units expected to be on the market over the next three years.

But not everyone is keen to adopt the next smartwatch or smart fabric.

A survey by Boston-based digital marketing agency The Relevancy Group found that wearables remain the realm of the young.

“I’m in my late 40s,” says CEO David Daniels, “and people in my demographic don’t seem to be interested.”

Millennials, for instance, are more likely to buy an Apple Watch – 13% of respondents aged 19 to 26 say they own one, just slightly more than those who say they’d buy one in the next six months – while those numbers shrink to 2% for Generation X and 0% for boomers.

“We certainly see people adopt (smart) devices in their homes,” he says. “There’s a social aspect to it. Older adults didn’t overwhelmingly see a need. The older demographic is people who traditionally wear a wristwatch.”

Interest in wearables grows when it comes to activity trackers and health bands. While Relevancy’s survey found the highest rate of adoption among those under age of 32, about 10% of Gen-Xers and baby boomers say they owned or planned to buy a device.

Adoption will grow, Daniels says, as price comes down and battery life becomes more reliable, and even kinetic, charging itself based on the user’s movement.

“We’ve seen some beautiful pieces that are fashion accessories,” he says. “I think we’re going to continue to see the behavioral patterns of adoption with younger individuals because they’ve always been in an always-on world. That can be a barrier as you move into Generation X.”