IoT and Big Data - Do they create benefits or problems?

In this technological advance era, I am sure these two terms, Internet of things or IoT and Big data are no foreign terms to us. But do we really understand what these two terms mean and how does it really benefit us as consumers and marketers? Let me define it for you first!

Internet of Things (IoT)

Internet of Things or in short IoT, basically refers to the billions of physical devices that are around in the world that are connected to the internet, collecting and sharing data. Some examples are Google Home, a smart fridge and many more. Basically anything, even basic objects that is being input with a sensor that can collect data and is connected to the internet is considered IoT.

Big Data

I know what you guys are thinking. Big data is just basically how big the data size is that’s all, but it is more than that. As defined by Tech America Foundation, Big data is the rapid acceleration in the expanding volume of high velocity, complex and diverse types of data and is often defined along 3 forms.

(i) Volume

The amount of data that is being generated. These data can be generated from everywhere such as social media platforms, from the company's internal sources of data, from our friend, IoT and many others.

(ii) Velocity

It is not just about the speed at which data is being generated but also how fast can we process this data to make sense and extract meaning from it.

(iii) Variety

This refers to the different types of forms that data may come and appear in. For example, data can be in the form of images, videos and so on.

How does it benefit and create problems for marketers?

(i) Benefits

With the consumers’ use of IoT devices, data will be generated from it and this data will be collected and analysed by Big data analytics tools to help marketers to gain valuable insights into the user’s life and their habits and what are some of the needs they might have through their searches.

All these data can then be analysed by interested company on how their target audience behave and from there, it will help them make better decisions, may it be to come up with a new product that will cater to their consumers’ needs or come up with a solution that will help solve their problems. These will help the business to deliver better value to their consumers.

An example would be the increasing use of wearable technology in consumers’ daily lives, may it be a smartwatch that allows us a quick glance of our important messages without checking our phones or a health tracker to track our personal health, the market size of the wearable technology industry is expected to a value of $57, 653 million by 2022. Hence, more consumers are going to jump onto the bandwagon and get themselves a wearable device too.

With all the data that companies have collected, they will then be able to provide real-time notifications, promotions or solutions through more tailored advertisements, targeting consumers that might be health conscious with health supplements that will help keep their immune system strong and so on. Which helps to address consumers’ problems of wanting to be health conscious. Therefore, keeping consumers satisfied and at the same time marketers can save costs by focusing on those consumers who are really interested rather than all of the target audience.

(ii) Problems

With many benefits come many problems as well and two of the most problematic ones that marketers would have to face is security and the laws and regulations garnering the use of IoT devices. This is because by 2020, the expected amount of IoT devices will reach 24 billion and that poses security problems as the increase in connected devices will give hackers and cyber criminals more entry points to commit crimes.

An example would be in late 2015, a group of hackers managed to take down a power grid in the region of Western Ukraine to cause the first blackout from a cyber-attack and in another research, researchers have tried and was able to hack into real, on the market devices with enough time and energy. This shows that so long as the hackers have the will they would most likely be able to hack in too.

So, with more enterprises around the world in the process or intending to use IoT devices in their operations but with only 10% that are confident that they will be confident to secure their devices from hackers, this pose as a major problem to marketers and businesses. Plus, it is not just about securing the IoT devices but also its software and network connections to these devices. Hence, companies would have to spend a lot of money in security in order to not let valuable consumer information be stolen by hackers.

Secondly, with the increase in the amount of IoT devices being introduced into the market, countries such as the United States have started introducing tighter laws to protect consumers and making sure that their personal data won’t fall into the hands of those that are not authorised to use or access it.

This would serve as a problem for marketers as they would find it difficult to access or too restrictive for marketers or companies to take advantage of these data. Therefore, even though the data is already there, but marketers and companies won’t be able to take advantage of it and this will pose as a huge turn off for them.

How does it benefit and create problems for consumers?

(i) Benefits

With the introduction of IoT and big data, it has certainly brought in a lot of benefits for us as consumers, such as newer and more upcoming IoT devices that will help improve our quality of life.

For example, smart home system such as Samsung SmartThings Hub which allows us to connect to different home devices and control all that using the SmartThings app on our phone and even alert us of unexpected situations such as a water leak and so on. Thus, providing great convenience to us.

Also, as mentioned above, with all these data collected, it would help marketers to create marketing materials that are more targeted to their consumers. So, this would mean that consumers would receive lesser unrelated advertisements and hence lesser spams, which helps to improve their overall quality of experience that they have with the company.

(ii) Problems

As data is being collected through the IoT devices, most of this data would be rather personal or sensitivity and this might raise some privacy concerns for consumers or worse cause data discrimination of consumers by companies.

Privacy has always been a huge concern especially with the amount of news we see online saying companies sold their consumers’ data to unauthorized 3rd party usage. Consumers’ fears were further heightened when in 2018, Facebook were accused of selling their users information to 3rd party such as letting Spotify and Netflix to have access to users' messages.

Not only that, as mentioned above, with the increase in connectivity among the IoT devices, it becomes easier for hackers to hack in and get users data. Therefore, with the increase in IoT devices, privacy is going to continue to be a major problem.

Another problem that might arise for consumers is the fact that data discrimination might occur. We, consumers have always known that the reason why companies collect consumer data to analyse is so that they can provide a better or more personalised experience for them. But what if, this would cause some consumers to find it more difficult to get certain details instead of the others?

For example, some credit card companies apparently lowered their customer’s credit card limit not based on the fact that they have bad repayment history but rather based on the data they have collected data and analysis of other shoppers who have poor repayment history and had shopped at the same venue as their customer’s did. Which leads companies to think that since they shop at the same place, their customers might have a bad repayment history too. Hence, causing some consumers to be discriminated from the rightful opportunities that they should have.

Although laws have been put in place in certain countries such as the United States to make sure that everyone has an equal opportunity but we will never be certain how effective this law will be and therefore, it is still a major problem.

Wrapping things up

The introduction of IoT and Big data has helped to create a lot of benefits and convenience to us as consumers or marketers. The amount of benefits that both consumers and marketers are getting will just keep especially with more IoT devices and more new methods of Big data analytics tools to be introduced.

However, with the increase in the benefits there is bound to be a huge increase in the problems as well, with some I have already mentioned and with some not yet arise. At the end of the day, it is up to the user to ultimately decide if the benefits outweigh the problems created by it.

So, is IoT and Big Data more beneficial to us or are they causing more problems to us than we think they are? What are your thoughts? Feel free to share your thoughts with me below.