Monday, December 18, 2017

The Exploding Use of Drones in Marketing



According to Gartner, the drone market grew 36% to 2.2 million in unit sales and $4.5 billion in revenues worldwide in 2016. But according to the Consumer Technology Association, 2.4 million personal drones were sold in the US alone in 2016, more than double the 1.1 million sold in 2015. Regardless of the exact numbers, the drone industry is one of the fastest growing industries, especially since the FAA granted exemptions to hundreds of companies to operate drones in 2015.

The market is very broad. Amazon.com and other companies (including Google and DHL) are exploring product delivery via drone. Roofing companies use drones to inspect roofs. Farmers use drones to inspect their crops. Realtors have found drones to be very useful in selling houses and land. Videographers are using drones to create more compelling video content. And there are even more inventive uses. YO!Sushi has experimented with drones to serve food to their customers. And, as one might imagine, there are many military applications for drones. The recreational, commercial and military uses are myriad and still expanding.

I bought a personal drone earlier this year. In the short time that I have owned it, I have used it in the following ways. I have taken aerial videos of my Adirondack mountain property, weaving them into a promotional video to rent my Adirondack home. I have taken videos of a local yacht club and its regattas to create a marketing video for that club. In the process of making that video, the club officers asked me to take aerial still photos of the waterfront area to help them optimize waterfront and dry dock space in 2018. I was even asked by a friend to help her locate her friend’s horse that ran away during a local Steeplechase event.

The top two distribution channels for drones are dedicated drone dealers or distributors and directly from the manufacturers. Amazon.com and hobby stores are #3 and #4. Best Buy and other big box stores are a distant #5 for drone sales.

One can segment the market into three levels – smaller drones/toys, larger personal drones and professional drones. Drones can also be classified by ranges – 0 to 299 meters, 300 to 999 meters and 1,000+ meters. I bought a drone in the 1,000+ meter range. The best brands in that range are Yuneec Typhoon and DJIPhantom (the industry leader).  Other top drone brands are Parrot, Holy Stone, UDI and 3D Robotics. GoPro has entered the drone market too given the importance of high quality photography to the product category. Many other brands are flooding the market, which is still in its infancy.

For the most part, the product names are interesting and consumer focused – Typhoon, Phantom, Parrot, Force1, Blade, Raptor, GoPro Karma, Quanum Nova, AirDog, etc. While other names fall in the category of somewhat boring and techy.

Drone prices can range from $20 for a cheap toy drone to thousands of dollars for professional drones. Top personal drones can run from $500 to $2,000 including accessories.

Drone features that matter include range, battery life, camera quality, portability, obstacle avoidance and a myriad of intelligent flying modes. Technical support and repair services are also important as drones occasionally encounter accidents.

Accessory sales are a big part of the drone industry. Product/accessory bundling is a competitive advantage for some brands. I bought the YuneecTyphoon Q500 4K Quadcopter because it came with its own aluminum carrying case and a complete set of accessories (including an extra battery and propellers) at a value price of $799 on Amazon.com and $899 at hobby stores.

Because of its emergence as an interesting new category, the drone industry is receiving a lot of free publicity and online and offline buzz. Many publications have created lists of top drone brands and most of the brands can be compared and purchased on Amazon.com. Several of the top brands have Facebook pages including owner group pages.

DroneCast and Hoovy are dedicated to helping companies use drones creatively in advertising and publicity events. Coca-Cola’s Happiness from the Skies advertising campaign featured drones. Drones were also featured as the villains in The Drones, a TV spot produced by Audi to launch its Audi 6 model in 2015. The Flower Council of Holland used a red drone named Cupidrone to drop red roses on people in Verona, Italy. Watch the YouTube video here. Captain Dave’s Whale Watching & Dolphin Safari created a drone shot video to promote its safaris. This amazing video has been viewed more than 14.5 million times on YouTube. 

The Skye Aero project builds 10-foot helium-filled balloons with small propellers attached. These serve as flying drone billboards. Drobotron also creates flying drone billboards. But theirs can feature motion graphics and even videos.

In 2013, Paramount Pictures promoted its Star Trek Into Darkness film by flying a group of drones over the Thames in London. One of my favorite South Park episodes, The Magic Bush, makes fun of the drone industry. And YouTube is increasingly populated by drone videos. Watch a fleet of 500 Intel drones create a spectacular light show.

Singapore-based Near has tested drones to collect publicly available Wi-Fi signals to help it profile audiences. Imagine the marketing intelligence that could be gathered by merging this information with Internet- and mobile-based data and then applying big data analytics.

In summary, so far, the drone market is intersecting with brand management and marketing in the following ways:
  • It enables much more compelling video content
  • It can serve as a new advertising medium
  • Because of its novelty, it can play a featured role (as an actor of sorts) in ads
  • It can be used to gather marketplace intelligence that can be used for customer targeting
  • It is an emerging product delivery technology, which can provide distribution advantages

 The rapidly growing drone industry is ripe for successful new business approaches and out-of-the box branding strategies. This is a market to watch as it grows and matures.

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