A few months ago, I did a column about the Internet of Things and how Google would likely use the data that will be collected from thermostats, refrigerators and cars. Well, it turns out that Google -- in a letter to U.S. Securities and Exchange Commission (written Jan. 29 but disclosed only in the last few days) -- is envisioning even more direct pitches.
"For example, a few years from now, we and other companies could be serving ads and other content on refrigerators, car dashboards, thermostats, glasses, and watches, to name just a few possibilities," wrote Google Finance Director Amie Thuener in the letter to Stephen Krikorian, an SEC accounting branch chief.
First off, I don't want to over-interpret this utterance. It is clearly speculative, guessing that "a few years from now" Google and others "could" be doing this, adding that it's merely one of many "possibilities." That said, this wasn't a casual email. Finance directors of Fortune 100 companies (at more than $52 billion in annual revenue, Google in 2013 was Fortune 55) don't send formal letters to the SEC without legal and the executive team reviewing and approving every comma. Hence, it's not reckless to assume that when Google spent several sentences discussing this scenario in an SEC document, it's a serious strategy element with senior management backing.
But it's also wacky. The true marketing magic of the Internet is interactivity, and few know that better than Google. Let's say someone is conducting Google searches involving political campaigns of Chicago in the 1920s. An ad pops up about a book called The Political Campaigns of 1920s Chicago. The searcher clicks and she is on an Amazon page that lets her look inside the book. She reads a review and then uses one-click to have it paid for and sent to her house. Total time from the ad popping up to her purchase? Maybe three minutes. Total effort? Maybe three or four clicks.
Now let's move it to a thermostat. At best, we are going back to the world of the freeway billboard. It gets a message out there: "Miller Beer is refreshing." It stops there. It hopes that you'll remember that hours from now when you will be in a position to make that purchase.
The business issue is that advertisers today expect lots of ROI metrics about clicks and actions and registration forms. In that Chicago book example, how many clicked to Amazon? How many read a page? How many read a review? How many put the book in their cart? How many bought it?
Google's world is all about the metrics. It seems unlikely that thermostats and refrigerators will have screens and keyboards sufficient to support interactive sessions, and certainly not convenient ones.
The flipside, though, works: When we're all controlling those thermostats and refrigerators from mobile and desktop devices, the interactivity is there. But placing the ads on those devices? The only way that could work is if it allowed a one-click option: "Interested? Click the Yes button and we'll continue this when you materialize in mobile or desktop mode."
There's another possibility, which is that Google is envisioning thermostats and refrigerators that sport full-sized touchscreens. That's theoretically possible with a refrigerator (a little less space for magnets is fine by me), but it would force a radical rethinking of what a thermostat or watch looks like.
Then we have Google's reference to "car dashboards." Setting aside the distracted-driver issues and pretending that only passengers would use this capability (or drivers only when they pull over -- which sorts of defeats the intent of an automobile), we have to ask why. In this scenario, aren't we assuming that many drivers will also have with them a mobile device? Wouldn't that be the more logical mechanism to use?
Cars are indeed a huge target for customized marketing. For example, a recommendation for a restaurant is much more likely to be effective/persuasive when drivers are more than 50 miles from their homes. An integrated navigation system -- which has a function for defining "home" -- would know such things, as would a connected mobile device.
The bottom line: is the ideal environment -- even from Google's perspective -- one where consumers can interact with every device they run into? Or is it far better for those consumers to use one favorite device (which they have mastered) to interact with every device in their world?
This gets into a seriously cynical issue. Google has bought thermostat vendor Nest and is trying to purchase makers of other types of devices. Even as Google fights hard with Apple for control over mobile devices, it can at least try to get control of as many Internet of Things devices as it can. It's sort of a backup strategy in case it loses the mobile market-share war.
By the way, there was one other very interesting thought shared in that Google SEC letter. Many in the business press have been trying hard to say "mobile device" rather than " smartphone and tablet," as we envision a world where tablets may dominate. Google has taken the opposite approach, deliberately placing tablets into the desktop space, limiting its use of "mobile" to only refer to smartphones, which Google is now calling handsets.
"As tablets gained momentum in the market, it became clear to us that their usage had much more in common with desktops than with handsets. Accordingly, our campaign management tool, Enhanced Campaigns, launched in 2013, now requires a single bid for desktop and tablet ad campaigns," the letter said. "In a short period of time, the meaning of 'mobile' at Google has shifted dramatically to 'handset' from "tablet + handset.' We expect the definition of 'mobile' to continue to evolve as more and more 'smart' devices gain traction in the market."
One has to wonder how much market-share battles are shaping that definition?
Evan Schuman has covered IT issues for a lot longer than he'll ever admit. The founding editor of retail technology site StorefrontBacktalk, he's been a columnist for CBSNews.com, RetailWeek and eWeek. Evan can be reached at email@example.com and he can be followed at twitter.com/eschuman. Look for his column every other Tuesday.
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