Guia da IAB que aborda tecnologia wearable, com foco no SmartWatch e as implicações para os anunciantes e consumidores.

1. IAB UK Whitepaper
Future Trends Volume 12, 2015
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FutureTrendsVolume12:
WearableTechnology
Future Trends Working Group

2. IAB UK Whitepaper
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Contents
Page 2 Introduction
Page 4 It’s early days for wearables
Page 6 What are the opportunities for advertisers from wearable tech?
Page 7 How can data be used in targeting?
Page 8 Cheap and cheerful
Page 10 Wearables – likely market scale and business models
Page 13 So, how often do we think about sex?

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Introduction
Catherine Cribbin - Mobile and Marketing Assistant, IAB UK
In the first ever whitepaper, the Future Trends Council cast our minds into the future and considered
the ‘Living room of 2015’, with a real focus on tomorrow’s futuristic ‘multiscreen environment’. Fast-
forward to today, and each household owns 7.4 connected devices, according to the latest YouGov
data on behalf of the IAB. This trend of multiscreening is indeed both the present and the future, but
where can multiscreening take us next? The answer is wearables. This time round the Future Trends
Council have grouped together to discuss what this may mean for advertisers and consumers. So
welcome to Future Trends 12 – Wearable Technology.
Mike Reynolds from the IAB talks about the fact its early days for wearables and discusses the
opportunities that connected devices will present once they hit the mainstream. Interestingly, Mike’s
view on how wearables fit in amongst other connected devices is as a complementary device,
rather than cannibalising the mobile or tablet, he discusses how they will bring mobile into further
prominence as the central device to connect all wearables and bring them to life. Highlighting the
need to shift away from a tech centric design to put the consumer first in terms of both design and
benefits, Mike believes the future is bright for wearables.
Tamara Jacobs discusses the opportunities for advertisers; never before has location tracking and
physical activity data been so easily accessible and completely personal. She looks into the
difficulties of sharing data, and the inherent challenges and opportunities of advertising on a device
so personal as wearable tech.
Dan Calladine from Aegis Dentsu also believes wearable technology is in its infancy stage. Looking
at the Apple Watch specifically, he comments on its likeness to the first ever iphone with high prices
and arguably limited consumer benefits. In the same way that the most attractive features of the
iphone came later, opportunities for wearable technology might blossom once killer apps and
content are developed. The data generated through wearables would be unique and highly
personal, so advertisers have the potential to send messages that are increasingly useful to
consumers.
Tim Elkington takes a different look at the future of wearables. Using an example from Nivea as an
indication of what is possible, he discusses the challenges of battery life and price in wearable tech
and puts forward the case for cheap, disposable wearable technology. Giving examples of
commercial opportunity and consumer benefits, he highlights the practicalities and scope for this
kind of tech.
Dr Alison Sprague talks about the history of innovative Apple tech and predicts the Apple Watch to
lead the way in the world of wearables, but does not anticipate it to crack the market in the same
way as it’s predecessor- the iPhone.

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Discussing the various market segments, she suggests that the lack of awareness as the biggest
barrier to the Apple Watch becoming mainstream, but considers it as a potential and
unprecedented success story in cracking the elusive ‘grey market’. Perhaps the destiny of the Apple
Watch, or other wearable tech devices is to achieve what the iphone could not.
Dr Simon Hampton looks at wearable tech from a psychological perspective. Honing in on what
time actually tells us, and the genius of the wristwatch in that it is hands-free and therefore time-
free to use, he celebrates the potential efficiencies of the smart watch. Noting how often we look at
our smartphones and how often we think about time, Dr Simon wonders that if the smart watch’s
features serve their purpose, it could be a great time-saving device.

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It’s early days for wearables
Mike Reynolds – Senior Mobile Executive, IAB UK
Wearable technology is still in the infancy stage of its lifecycle and I think there are a few reasons for
this. The main one is the fact that we’re not quite there yet from an ‘it just works’ perspective. At the
moment everything sits in isolation, which, unless you’re a very early adopter, means becoming
more connected isn’t as simple as it sounds. Making it easy for consumers is key, and seems like
the next logical step for wearable technology. But what does ‘making it easier’ mean?
For me, the role of smartphones and tablets becomes even more significant as they will play a
massive role in this ‘making it easier’ concept. Mobile is the thing that connects the dots between all
of these different wearable devices and becomes the remote control that brings them to life.
Another reason I think wearable technology is still in its early days is because we’re not quite there
yet from an ‘my parents would wear that’ perspective. I think this is slowly changing and we’re
starting to see wearables coming to the market that you’d be happy to wear outside of the four
walls of a tech start up in Shoreditch.
This has been highlighted by the recent smartwatch launches from LG, Huawei, and of course
Apple. All three have gone for a design centric approach, with the emphasis on smartwatches
becoming ‘wearable’.
[LG Watch Urban]
I definitely think moving away from the tech-centric designs we’ve seen from previous smartwatches
is a ‘smart’ move by these three tech giants…and small is definitely beautiful in this case.
The final reason I think we’re not quite there yet with wearables is because we’re still at the ‘how will
it actually benefit me’ stage of the adoption curve. There’s been some questionable use cases for
wearable tech, a notable one coming from Sensoree with their sweater that interprets your
emotions and displays excitement levels on an illuminated collar. Whilst this is quite a cool concept,
it's not something that is going to be a catalyst to widespread consumer adoption. What’s really
exciting, however, is developments in areas which have genuine benefits to people.

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One of these areas is healthcare, and a company that has recently launched its new health
monitoring wearable device is Masimo. Coined the MightySat, the wearable device which fits on the
end of the user’s fingertip measures oxygen saturation as well as blood flow and pulse. Having a
personal device that keeps a track on your health could prove invaluable from a medical
perspective, with the view to having a proactive approach to the prevention of illness. It’s cases like
this which I think are going to change the world as we know it. Watch this space!

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What are the opportunities for advertisers from wearable
tech?
Tamara Jacobs – Brand Solutions Manager, Blinkx Media
Digital technology has offered advertisers many opportunities to reach out to, and communicate
with their target audiences, whether that be via rich media display, cinematic longform videos,
social media posting or native experiences.
The digital advertising industry finds itself in a conflicting position with reach continuing to be a top
priority (and more easily achievable than ever thanks to programmatic), while simultaneously trying
to deliver the most personal and authentic experiences to their end users.
Enter wearable tech. It’s attached to your body and has the ability to monitor everything a person is
doing, from the physical activity they’re engaging in, to their current geolocation. With this
information available for capture, will brands be able to collect data on a level they never have
before? And if so, how will they use it to create the type of integrated experiences that position
wearable tech as the future of connected devices?
As with any new movement, there are opportunities and obstacles – so what are they within
wearable tech?
Some have said that wearable tech is predicted to be bigger than the smartphone movement and
advertisers will be the ones to propel its growth. The same people believe that there are great
opportunities for expansion into this market due to low entry hurdles.
However, market share isn’t great which makes it difficult to transition ads across different formats
and verticals. Moreover, wearable tech doesn’t incorporate well with web analytics, making the
process of sharing data with users who download apps even more difficult.
In addition to the issue of sharing data, online ad formats won’t work in wearable tech. In order to
be successful, formats must provide a service. For example, wearable tech has the ability to
integrate a user’s surroundings with their current experiences. If a woman is walking down Oxford
Street and passes by Zara and her recent desktop search history indicates that she’s been looking
at their ecommerce site, wearable tech can prompt her with a sale notification, thereby making
wearable tech a digital extension of the real world.
At present, advertisers are still trying to determine the best way to incorporate their message into
wearable tech devices. Messages will have to be authentic, personalised and welcomed by users,
otherwise wearable tech will never be more than a fashion accessory. It is thought that wearable
tech will offer brands the opportunity to connect with hard-to-reach consumers on the move, but I
am curious to see whether those hard-to-reach consumers will opt-in for this kind of advertisement?
Presumably, if they are hard to reach it’s because they are the types that reject unsolicited
advertising and therefore experiences would have to be seamlessly integrated and flawlessly
delivered if they are to be successful.
Excited to see what the future holds…

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How can data be used in targeting?
Dan Calladine – Head of Media Futures, Dentsu Aegis
Recently, I went into Selfridges to see the Apple Watch. I was very impressed with the set-up there –
very knowledgeable and well-mannered staff talking potential buyers though the features of the
different watches, and letting us try on different versions with different straps, finishes and so
on. While the Apple Watch section was full, the rest of the watch department a few metres away
was very quiet, with the unoccupied staff looking over slightly wistfully at the Apple customers.
The first Apple Watch isn’t for everyone. I think that it’s for the sort of person who can afford to
spend over £300 on a watch pretty much on a whim, but there are probably quite a few million
people like that in the world. The success of the Watch will mean future watches though, and in a
couple of years there will be more buyers, and more reason to buy. The iPhone didn’t come with
many compelling reasons to buy; the killer apps like Instagram, Angry Birds, CityMapper and more
came later, and the same will be attempted with the Watch.
What it offers to agencies is the chance to (potentially) collect and target on far more data about
customers. I’ll say potentially because we really need to see how this plays out, but there are a lot of
potential types of data that could be collected and used for targeting and more.
Location – the Watch will be with you all day, and track where you were, and when. What areas
do you go to most often (work, home, other)?
Interests – What sort of places do you go to? How often do you go to the pub? To restaurants? To
the cinema? To football grounds? Are you the sort of person who is out at 3am on a Sunday
morning?
Retail – What sort of shops do you go to, and how often?
Health – Since it’s strapped to your wrist, it also acts as an activity tracker. There are already
insurance policies (for example john Hancock in the US) that are offering insurance policies based
on data from an activity tracker, similar to the car insurance policies that use ‘black box’ trackers,
and Apple is actively developing its HealthKit suite of services around this sort of data. The Watch
could supply data on how active you are, how often you exercise, and also your state of health over
time.
These are all *potentally* areas that smart watches could provide additional data for targeting.
Provided that industry takes privacy concerns with the responsibility they deserve and ensures that
consumers can control the data they exchange for some kind of benefits (e.g. health assessments,
more accurately priced insurance) then it’s possible that advertising could soon be more
personalised and useful to consumers offering for example:
Offers to a new local restaurant targeting people who are often out late at weekends.
News of a new documentary film about Haute Couture to people who are frequent luxury shoppers.
Personal training for people who find it hard to motivate themselves to exercise when it gets colder.

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Cheap and cheerful
Tim Elkington – Chief Strategy Officer, IAB UK
Most people assume that wearable technology will be sophisticated and expensive and with the
Apple Watch retailing at up to £12,000 then it seems that this is a fair assumption. But what if
wearable technology is sophisticated and cheap? What if wearable technology ushers in an era of
disposable connectivity, what would that look like and what are the possible uses for cheap,
wearable technology?
There is an interesting precedent for this type of application of wearable technology. Nivea’s award
winning Brazilian beach bracelet is a perfect example of how brands might use technology in this
way. Delivered as a pull out from a magazine advertisement, the bracelet could be worn by a child
and synced with a smartphone app that tracked the proximity of the child to the parent on the
beach. If the child strayed too far then the parent would be alerted and could use the app to locate
the child on the busy beach. This enabled Nivea to extend its brand footprint from protecting
children from sun burn to protecting them from getting lost on the beach.
The bracelet didn’t cost the user anything and although in theory it was reusable I imagine that once
it was covered with the usual beach mix of sand, sun cream and ice cream it was quickly disposed
of. In future Nivea could choose to deliver the bracelets with every purchase of sun cream, making
them available on a more long-term basis.
Although environmentally questionable, providing technology with an intentionally limited life span
does solve one question – battery life and recharging. Removing the need to provide a re-
chargeable battery, lead and plug greatly reduces the price, size, packaging and shipping cost of
technology.
Imagine a festival providing an entry bracelet with location functionality and a QR code that could be
scanned by an app to give the location of a defined group of people. This means that you could
always find your friends at the festival. The bracelet could also contain pre-loaded proximity based
offers that could alert your smart phone when near the relevant food outlet or bar. With an intended
life span of only a couple of days this technology could be delivered at relatively low cost on a large
scale and would be a great opportunity for brand sponsorship and other commercial opportunities.

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There could be similar opportunities in fitness / health, for example marathon runners could use
wearable technology that tracked their position and monitored heart rate so that friends and family
could easily track their progress. Another possible use could be in shopping malls where wearable
technology could make sure that the user was aware of all the latest offers and sales and could
even be configured to their interests via a smart phone.
Wearable technology need not be expensive to be effective. It could be cheap and disposable and
still play a vital role. As with so many other things the most important factor will be to define
objectives. It might be that objectives are limited and extremely time specific and that wearable
technology could find its place in this light touch area of minimal functionality but maximum utility.

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Wearables – likely market scale and business models
Dr. Alison Sprague – Partner, CEG Europe
Apple has led, grown, transformed and now dominates the smartphone and tablet segments and
is expected to do the same for smartwatches. Smartwatches are expected to account for the lion’s
share of the wearables market with glasses and fitness/health bands remaining niche. But how big
is the market likely to be and what business models will emerge as Apple leads the way?
So far awareness of wearables, unlike smartphones, is not universal. Ofcom reported in August
2014 that 40% of adults had not heard of smartwatches and 46% had not heard of smart glasses.1
In contrast and unsurprisingly, of children aged 12-15, 81% were aware of smartwatches and 77% of
smart glasses. Apple’s pre-launch of its smartwatch on 9th
April 2015 followed by its continued slick
advertising will have increased product awareness. No doubt the buzz will amplify significantly on
Apple Watch launch day and awareness will end up considerably higher than Ofcom reported.
Indeed that is imperative as the watch is a luxury and a complementary product rather than a ‘must
have’.
When the iPhone 6 launched, the Evening Standard’s headline (with accompanying photo) read:
“Thousands queue outside Covent Garden Apple store to get hold of latest handset.” For the Apple
watch, online pre-orders were available on 9th April, alongside demos at the stores. Jeremy White
from Wired reported that the Covent Garden Apple Store was fairly quiet by 10am on the day. Is this
an early indication that the market size is going to be massively smaller than smartphones or simply
that the early adopters were stuck at home queueing to place their pre-orders on a crowded
website?
There’s a number of reasons why the Apple Watch may not crack the market in the same way that
its other products have. These include, but are not limited to:
• It’s not a necessity (compared to a mobile phone)
• It’s a complementary product, working better alongside other devices (especially
smartphones)
• The usual share of wallet constraints
• Attractiveness to only certain demographic groups
• Possible aversion to wearing a watch
• Possible aversion to continuous, very close, personal and physical communications.
Consider Figure 1 below - we can identify around 3 penetration segments: mainstream (75% plus –
think TVs, mobile phones and broadband); middle ground (think games consoles and so far
smartphones and tablets); and low penetration (e-readers and thus far smart TVs (which should at
some stage easily hit the middle ground)). The slopes of the curves are important – it can be seen
that the take-up of both smartphones and tablets has grown rapidly.
1
See pp 44-45 in: http://stakeholders.ofcom.org.uk/binaries/research/cmr/cmr14/2014_UK_CMR.pdf

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Figure 1: Take-up of communications devices
Source: Ofcom2
One thing that appears to be holding back smartphones and tablets from becoming mainstream
appears to be age. The 65+ age group appears to be resistant to these technologies and there’s a
real drop off in take-up in the 55-64 age group. In future this of course will change as the
population ages. However, given the relative lack of awareness of wearables amongst older people
and the current resistance to even the standard devices (i.e. smartphones and tablets) it seems
highly unlikely that the Apple Watch will become mainstream for a good while.
Figure 2: Take-up of communications devices by age
Source: Ofcom3
2
See Figure 1.28 in: http://stakeholders.ofcom.org.uk/binaries/research/cmr/cmr14/2014_UK_CMR.pdf
3
See Figure 1.29 in: http://stakeholders.ofcom.org.uk/binaries/research/cmr/cmr14/2014_UK_CMR.pdf

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Early adopters of the Apple Watch will pay in full for the device (£299 for the cheapest sports watch
to £13,500 for the “18-carat rose gold with rose grey modern buckle 38 mm Apple Watch Edition”).
Smartphones followed the path of: outright purchase for the early adopters; the next segment once
prices had fallen somewhat; subscription packages for a large proportion of the take-up; and late
adopters buying refurbished phones on eBay etc. Tablets have followed a similar path, with the
subscription model offering either the device plus data or a ‘free’ tablet on top of a smartphone
package. The Apple Watch is expected to follow a similar path.
Apple Watch will no doubt lead and grow the wearables market but it is highly unlikely that
wearables penetration will be as strong as smartphones and tablets. That said, the smartwatch
concept is ideally placed to penetrate demographic segments that have no interest in smartphones.
Apple reportedly ditched several advanced health monitors (such as blood pressure sensors) during
the Apple Watch product development stage owing to manufacturing issues and reliability
problems.4
If Apple were to re-visit and perfect these features (and others, such as security and
safety monitoring), Apple Watch could become the almost universal wearable product, penetrating
the elusive (but increasingly growing) 65+ age group and possibly the 55-64 group. If not Apple,
then there is a sizeable market opportunity for someone else to crack that market opportunity.
4
See: http://www.wsj.com/articles/challenge-of-apple-watch-defining-its-purpose-1424133615

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So, how often do we think about sex?
Dr of Phycology Simon Hampton, IAB’s resident psychologist
That’s what came to my mind when the IAB investigated the frequency with which we seem to think
about our Smart Phones as measured by how often we look at them. Is it as often as women are
said to think about chocolate and men about anything edible?
And it made me think (again), ‘are we asking the wrong question?’ ‘How often do we think about
reproduction in its wider selfish-gene sense?’ The answer is constantly. Implicitly, explicitly,
consciously, unconsciously, we are always thinking about and trying to solve the myriad problems
that together amount to the general problem of replicating our genes. It is what thinking evolved to
do.
These problems – of food, resources, shelter, image, status, kin, friends and foe - take time,
comprise time, organise our time. For some – those that become more apparent, immediate and
doable – we make time. For others we reluctantly give time. How often do we think about time? All
the time.
And this takes us to wearable technology. Why has it come to us most persistently in the form of the
wrist watch? Because it turns out that the mother of invention decided that the watch was the first
necessity, the first and, to date, only really useful and wearable tech.
Here we need to disambiguate between features and benefits. What is the one necessary feature of
a common-or-garden $5 wind-up? That it tells the time of the given day. The benefits? Absolutely
everything and anything that the fact of the time subsequently tells the user: How long since
breakfast and until lunch?; Am I on time, early or late? What are the implications? How much time
do I have left?; How productive have I been?; How idle?; Am I good or bad? What is my cat, dog,
partner, child, boss, mortal enemy doing now? Can I get from A to B? Have I got time to look in on
C? When does this bit of my life end and the next bit begin?
Add-ons such as stopwatches, day and date, and moon-phases are useful in that they allow us to
test the foregoing questions more precisely or more generally. And they are useless when take up
more time that they preserve, are pointlessly precise or hopelessly vague. When they cannot tell us
what to do with our time.
The lesser-uttered genius of the wrist watch is that it’s hands free and therefore time-free to use –
the pocket watch had no chance.
Whatever its features tech doesn’t work – it has no benefits above the humdrum of fashion - if it
doesn’t do time well: Save it, stretch it, double, dice it, organise it, defy it.
If at some point in time the IAB launches research showing that, we look at our Smart Watches less
often that we do our Smart Phones I will bet that their participants don’t wiggle with
embarrassment. They will be too pleased with how efficient they are.