Solving the post-purchase marketing problem with connected packaging
After a stream of hype, the Internet of Things has had a rather quiet 2018. We caught up with specialist IoT agency SharpEnd to find out just how connected the future of marketing is going to be
“The Internet of Things is such a worn-out term,” says Cameron Worth – founder of the world’s first Internet of Things (IoT) agency, SharpEnd – during MAD//Fest’s inaugural event.
“If I was going to start SharpEnd today, it wouldn’t be an IoT agency. It would be a technology innovation agency.”
In 2015, Mediatel reported claims that the Internet of Things was set to transform entire markets, as billions of devices and sensors – handling upwards of 50 trillion gigabytes of data – connect to one another. IoT was tipped to spark a gold rush of more than $5 trillion; imaginings of a future fridge that can communicate with your ketchup and re-order when it gets low were front and centre of every tech conference.
But three years on, connected technologies still seem a long way off. As such (and against all expectations) Worth says the Internet of Things currently means “very little” for brands.
What does exist, however, is a tangible opportunity for brands to engage with customers via connected packaging.
Thus far, SharpEnd’s biggest business has been in bringing fully operational connected packaging to market. The agency has produced connected bottles for brands including Malibu, Jameson and Absolut Vodka, kitting them out with NFC tags (smart chips that can communicate with smartphones at short range) that allow users to unlock exclusive brand content in exchange for data.
According to Worth, that solves the post-purchase business problem that regular marketing tends to miss out.
“The whole point of marketing is to get people to pick up your product at the shelf. Up until connected bottles and product-as-media became a defined opportunity, the product purchase was the end point of the relationship. Connected bottles are about how you build the brand post-purchase,” he says.
“Once they’ve interacted you can start having a direct conversation with consumers through the products that they buy and use – which is a really transformational opportunity.”
According to SharpEnd, Jameson’s connected bottles saw engagement rates upwards of 7%, which the agency predicts will grow as the iPhone opens up its NFC to be completely app-less.
“From our insights, people who engage with products tend to engage at least 3 times with the same object. So we already know there is a role for ongoing engagement with these people,” says Worth.
Engagement with connected packaging is a unique proposition, as the consumer has to have the product in hand to engage with the tech. “So there is essentially either a consideration or consumption moment happening in that moment of engagement,” he adds.
Nevertheless, it’s easy to look at these technologies and feel that they’re a little gimmicky. But Worth argues that connected packaging is both scalable and effective, if you look beyond impressions and sales.
“It’s not always about business metrics, or about selling more product, but about collecting more data and increasing loyalty,” he says.
In a study conducted in collaboration with Mindshare in 2016, SharpEnd found that 62% of respondents would choose to trade their data in return for something of value. In practice, it found that a still-impressive 48% of consumers who engaged with SharpEnd’s connected Malibu bottles went on to send personal data to the brand in return for exclusive content.
Not only is that a brand safe, transparent, GDPR compliant method of harvesting customer data, it cuts the middle man – the retailer – out of the equation. According to Worth, brands therefore need to ask whether the value of that direct relationship with their customers is more cost-effective than having to buy that data, and whether these technologies can effectively drive loyalty post-purchase.
Tech and branding purists
According to Worth, SharpEnd’s ability to produce connected tech at scale is far superior to what some non-specialist agencies are bringing to market.
“It’s not just about being innovative and creating a new touch-point. If you do that, you’re doing it for technology’s sake and a flash in the pan PR spike,” he says.
Take Amazon’s Alexa Skills. Although SharpEnd built one of the first Skills for the Echo (Ask Absolut), Worth is now dismissive about their value for brands.
“What I hate right now in voice is the basic nature of skills I’m seeing brands coming out to market with.”
Branding the experience of using an Echo “the most boring experience ever,” Worth adds that, having reviewing agency pitches, “I haven’t seen one pitch where it says that you have to first ask Echo to open the skill. I think [agencies] are trying to trick brands into thinking you can just ask how to make a mushroom risotto, for example, and their skill will respond. It won’t.”
“So voice in that respect doesn’t interest me,” Worth says, though his interest is peaked by video overlays on screens, driven by voice interaction.
As for where SharpEnd fits into the advertising agency space, the short answer is “very uncomfortably.”
“Now, every agency wants to be absolutely everything to every client. Part of that is this smokescreen business model whereby agencies come to us saying that they’re working on a campaign, and asking us to work with them.
“We’re happy to work with you, but not through you. I don’t want you to sell my ideas or proposition as if it’s your own because it’s not a very credible business model and I don’t think it’s very honest. If we’re living in an age of transparency, I don’t really think it stacks up.”
Besides, Worth says, he has found that there is an appetite among brands to work for defined specialists in their field – rather than generalists, who they are “paying over the odds for.”
But as the agency won’t work on retainers, preferring to work project by project with clients, it is somewhat selective about which brands it will take on.
“We’re only interested in working with the most forward thinking brands in market. We have no interest in Clarks Shoes. We want to work with brands who want to embed themselves in consumer’s lives in the most interesting ways.”
Cameron Worth was a speaker at MAD//Fest, an industry festival – backed by Mediatel – organised to showcase the very best of marketing and innovation. SharpEnd also built the Pub of Things, a connected networking space for attendees.