Wearables: A Double-Edged Sword

Wearables are quickly becoming the next customer-driven data collector. They have opened the doors to arguably the most granular understanding of consumer behavior that there is. But if not utilized properly by advertisers, wearables could end up being the next way to intrude on users’ privacy, industry participants say.

There are many indicators that 2015 will see big moves in the wearable space: Apple is reportedly going to launch Apple Watch in spring of this year; wearable technology like Oculus Rift and Fitbit took center stage at the Consumer Electronics Show (CES) this past January; and analysts predict that with a 44 percent growth rate, smartwatches will become more widely adopted in 2015.

This growing tech trend is pushing digital marketers to think about how best to reach consumers via wearable devices, and how to leverage the data behind those gadgets.

“When it comes to wearables, the most exciting thing is really about data,” says Jon Anselmo, senior vice president and managing director at MediaVest. “Wearables can actually allow us insight into the more passive aspects of the consumers lives – allowing us to layer in a whole new level of understanding. When we look at the massive play that data had in the past few years, we really think less about a particular device. And when wearables offer us another data layer, the most important issue becomes how to use it to grow meaningful and actionable insights.”

Indeed, wearable technology enables marketers to collect more data, including deeply personal health stats. With these data sets, marketers will be able to deliver more personalized messages. But at the same time, wearable data presents some challenges for marketers: how to leverage wearable data without interrupting the consumer experience? And how to minimize the privacy issue?

“When advertisers are getting closer to consumers, consumers can get more easily disturbed. So the challenge for advertisers becomes how to integrate wearable technology and add value to consumers’ living experience without interrupting that experience,” says Allen Adamson, chairman of North America at brand consulting company Landor Associates.

Jim Hord, executive creative director of Havas Worldwide, adds that the intimate nature of wearable technology makes it harder for marketers to deal with consumers’ privacy. “I think it depends on how personal you want wearables to be,” he says. “Wearables can know a lot about you. And that will become a temptation for advertisers to say, ‘Well, that technology knows a lot about this person, so we can deliver significant messages to them.’ There’s no difference between that and a targeted online banner ad. Right now it’s already happening that if you go to certain online pages, you can see customized banner ads. So in the same way, you might see messages delivered [to your wearables] based on your personal information. And all this leads to privacy issue.”

In spite of these challenges, some ad-tech companies have already started testing wearable advertising. For example, FitAd, a mobile and wearables ad network, started serving targeted ads on wearable gear and apps last December. And mobile ad exchange TapSense introduced the first programmatic ad platform for the anticipated Apple Watch.

But Tony Bailey, senior vice president and technology lead of DigitasLBi, believes that marketers have to put more thought into wearable advertising, as wearables should not just be a place to put messages simply because they can be a place to put messages.

“We see people create an algorithm for Apple Watch, or just place a banner at the bottom of an ad page. That’s not the way to migrate advertising to wearables. You need to have context, and you need to deliver an ad in a way that people want to receive it,” he says.

“I’ve been wearing a Google watch since last summer. If anybody serves an ad on my watch, it really gives [me] a bad impression of the advertiser,” Bailey adds. “The mobile phone is already an intimate device, and the smartwatch is even more so. Therefore, if I see a pop-up on my watch, it would be really frustrating for me as a consumer.”

Image via Shutterstock.

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