November 30, 2012
By Jürgen Hase
Few technologies have as much growth potential right now as machine-to-machine communication, or M2M. It could take mobile marketing to the next stage in its evolution – provided all mobile communications providers cooperate more closely.
Do you remember the scene in Steven Spielberg’s “Back to the Future Part II,” in which Michael J. Fox is attacked in a future Hill Valley, CA, by a virtual white shark in the middle of the road? The shark is advertising a new motion picture, “Jaws 19.”
That out-of-the-blue virtual attack is still a vision of the future, but so-called “everywhere marketing” and the means of placing advertising messages anywhere are already a reality.
It is a reality based on a fast-growing technology known as machine-to-machine communication (M2M) – machines exchanging digital information automatically. Some experts refer to the technology as the Internet of Things, but both terms refer to the intelligent, automated sharing of data.
M2M applications enable a high-bay warehouse rack to sound the alarm because stocks are running low and orders more parts automatically, or an ECG machine to maintain a constant watch on a patient’s state of health, reporting irregularities to a physician.
In most cases, the data will be transferred by mobile telephony. Whatever the application, M2M devices must be equipped with SIM cards and the right wireless technology.
Gigantic growth potential
In addition to logistics and healthcare, market researchers forecast gigantic growth rates for M2M technology in the years ahead, especially in the automotive, energy, and consumer electronics sectors.
According to a Machina Research survey, 1.3 billion M2M devices are already in use worldwide. By 2020, this number is expected to increase nearly tenfold to 12.5 billion, with M2M device sales soaring to $964 billion.
Universal mobile phone network availability and falling mobile data transmission costs are among the main reasons that experts see more potential for these bright growth prospects.
There are no limits to the imagination where uses are concerned.
There could, for example, be a solar-powered beverage vending machine on a tracking trail in the middle of nowhere, miles from the nearest fixed-line Internet connection. The machine submits an automatic M2M request when it needs to be refilled. And the operator can set his prices remotely to show up on the machine’s display panel.
M2M technology also means that digital signage devices no longer need a fixed-line broadband connection for operators to supply them with new information.
To launch a new marketing campaign, the operator relays the presentation or video to his devices by a wireless mobile link. And if, for instance, the device’s contents attract more attention near the checkout than at the entrance to the store, its location is easily changed – because a power supply is all that is required to run it.
New horizons in mobile marketing
Targeting advertising messages at specific people in specific locations is also possible using M2M technology.
In the future, the car can point out special offers by the roadside such as meal deals at restaurants or low-cost gasoline at a message about a special offer on shirts straight to customers’ mobile phones while they are looking for a filling station. This presupposes, of course, that people want to be informed about special offers of this kind.
The bandwidth of new uses that M2M could make possible is really wide.
Much like mobile apps that have only been around for a few years, M2M apps are poised to trigger a real innovation boom in the near future.
Mobile payment by smartphone is already proving to be a winner for retail and marketing.
More mobile device manufacturers are fitting them out with so-called near field communication chips. The technology transforms smartphones into digital wallets.
Combined with M2M solutions, this enables providers to send vouchers in-store to potential customers who can redeem them on the spot.
Application scenarios of this kind will be a part of our daily lives in the foreseeable future because the smartphone is already the focal point of most people’s digital lives.
M2M: Cooperate to innovate
Technically, M2M is fully mature already. M2M modules that function with complete reliability in extreme conditions such as very high or low temperatures or dusty environments are already in production.
If, however, devices are to work across national borders and nearly everywhere, mobile communications providers will need to cooperate more closely.
So far, they operated as lone wolves in the M2M market. In future, however, they must become innovation enablers.
To do so, providers must form partnerships and uniform, standards-based technologies are required, much like their customers’ requirements.
Along the lines of the StarAlliance, in which a number of international airlines collaborate, cooperation arrangements will take shape in the M2M market with a view to providing users and market participants with uniform technologies and service level agreements, ensuring constant availability of devices use to relay their data.
What matters is that the terms and conditions are right, and the data transmission works reliably, offering additional service functions.
Mobile communications providers would also do well to cooperation more closely with other market participants such as media enterprises or other advertisers.
Once these preconditions are in place, nothing will stand in the way of a final breakthrough for M2M technology, and the result will be new global opportunities and economies of scale.
Jürgen Hase is vice president of the M2M Competence Center at Deutsche Telekom AG in Bonn, Germany. He is also chairman of the M2M Alliance. Reach him at juergen.hase@telekom.de.
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