By 2020, it is expected that there will be 30 billion internet connected devices in use.  Which simply means that the Internet of Things will soon be a fully blown trend.  But if you’re not familiar with IoT, you need to understand how the Internet of Things aims to makes sense of all the data produced by these Internet-connected devices.  The data can be used to better understand the needs or wants of consumers, and even predict their next moves based on their history or places visited, items purchased, books read, programs watched and so on.

As we move closer and closer to an era where everything is connected online, one can’t help but think how companies can use this to their advantage, and everything seems to point to monetization via advertising.

Retailers are using sensors to not only track their inventories but also as a way to get to know their patrons better.  Purchases are logged and with a little analysis, retailers use this data to predict what consumers might purchase on their next visit.  Some retailers use RFIDs to track their inventories, while others use mobile apps to offer discounts in exchange for consumers giving out details like their email address, phone number or even just their gender, name and age.

“The more data you have about a customer, the easier it is to deliver an ad,” said Rob Winters, Director of Reporting and Analytics for Spil Games, during an interview on theCube.

Though Winters’ comment pertains to the gaming platform, the same principle applies to internet-connected devices.  The more people use them and enter their information, the more companies will know about the consumers, thus better targeted ads can be delivered.

Winters noted that though analyses of collected data points is invaluable in providing a more personalized experience for the user, one should greatly consider the best approach for each individual.  Some may see advertising on social sites such as Facebook, Twitter, and LinkedIn, the best option since it seeks out targets based on like-minded marketing but that would probably cost a lot.  For a more economical solution, brands could take a more individualized approach based on specific user ad and page views and lengths of time of those views.

See more of Winter’s chat about how monetization of data works in this segment on theCUBE:

But according to Martie Spoche, a degree holder in trademark and copyright law with a minor in IT, there are four key areas in IoT that companies should focus on to maximize monetization and those are:

Controlling configurations. Embedded Licensing monitors two aspects of how your software is used: by controlling access to the software source code and by controlling how the software-embedded hardware is used.

Supporting field upgrades. Field upgrades allow a customer to decide to upgrade their software without having to send it back to the company or purchase a new piece of hardware. With embedded software licensing, companies can verify the software’s integrity and then perform the upgrade in the field.

Creating personalized offerings. When your smart software is monitored with an embedded license, you are able to offer different levels of software functionality within the same essential hardware device. This allows you to market essentially the same piece of hardware with different software at different price points to remain competitive.

Gathering usage data. With licensing that ensures software cannot be tampered with or hacked, it becomes possible to monitor detailed usage data from the moment the object leaves the warehouse. This allows your company to learn which features are more or less popular, offer value-driven upgrade options and more.