In-vehicle devices have come a long way since OnStar first debuted in 1996, and evolving technologies have brought the market almost to the point where the car itself is a device. The current connected car market is already strong, offering everything from hands-free calls and messaging for drivers, to live weather updates and streaming in-car entertainment for passengers. This type of connectivity has finally reached the point that brands can begin engaging with customers through marketing. In today’s post, we’ll take a brief look at how connected cars work and their role in the future.
The Appetite for Marketing in Cars
The time is right to see this type of technology catch on. More than 87% of Americans over the age of 16 reported driving in 2016, and on average, drivers spent 290 hours on the road annually. To put that in perspective, the amount of time Americans spend driving is equivalent to seven 40-hour weeks of working. What’s more, 86% of households in the U.S. have at least one car per driver, and while most driving is done solo, 34% of all driving trips involve at least one passenger.
That’s why since just 2015, $40 billion has been invested in connected car technologies and companies, including areas like machine learning, sensor processing, image processing, 3D mapping in real time, data analytics, device integration, and in-vehicle internet networks. So it shouldn’t be much of a surprise to learn that GM, IBM, Renault-Nissan, ARM Holdings, Transdev, Intel, BMW, Peugeot, Samsung, Mercedes-Benz, Ford, and Vodafone have all recently unveiled connectivity solutions and concepts. In terms of marketers and brands that are taking advantage of this technology to engage drivers, ExxonMobile, GasBuddy, Mastercard, and iHeartRadio are just a few of the companies already involved.
How Brands Are Using It
With OnStar, the connected car had access to cooperative safety features, and that’s where many of the advances started. Rapid assistance and GPS expanded to collision and lane change warnings and emergency breaking, as well as vehicle diagnostics that can be communicated to dealerships or repair shops. Benefits weren’t entirely limited to safety, though — hands-free calling and texting would also lead to hands-free controls over radio and GPS, and eventually, passenger entertainment systems were integrated as well. In fact, cars themselves can be wireless hot spots. This has expanded the role of in-vehicle content, and thus for marketers.
For example, GM, OnStar, and IBM Watson partnered in 2016 to develop OnStar Go, which will apply machine learning to driver and passenger habits and preferences along with a cognitive platform to make personalized suggestions based on real time analytics. They’ve already partnered with ExxonMobile, which could help drivers locate fuel stations, recommend particular fuel or fluids to enhance performance, and even authorize payments from the car itself. Mastercard will also integrate its mobile pay system, Masterpass, and iHeartRadio will tap Watson insights to curate stations from across the US and create dynamic entertainment that’s locally relevant.
How It Works
What makes all of this possible? Quite simply, the rise of the mobile web and machine learning. The vehicle needs 4G or 5G access, which usually means the manufacturer needs to partner with a provider, such as AT&T or Verizon. Vehicles need to be equipped with on-board diagnostics (for internal evaluation) and sensors (for external readings), and most will need a dashboard console for the driver to interact with, preferably designed for voice commands. Additional screens can be featured on the back of headrests for passengers to access screen content, safe from where it may distract the driver. If machine learning or predictive modeling is desired, then advanced software is required, such as IBM Watson. Everything else is apps that rely on the data and analyzation from the aforementioned features.
Connected cars are a booming industry that some compare to where smartphones were in 2010. According to some estimates, by 2025, the number of connected cars will grow approximately ten times to 300 million, and associated revenues for equipment and services would also surpass $250 billion. Other estimates peg the number of cars to reach 380 million by 2021. Still, others put connected car penetration at 34.3% by 2021, and revenue will see a 22% CAGR through that same period to more than $18 billion.
A survey from earlier this year showed that 66% of Internet of Things (IoT) professionals believe connected cars will be “widespread” in the next ten years, and more than half believe the same of autonomous driving. If correct, that means that it won’t merely be assistant type services (e.g., finding gas or parking) that will matter to owners and drivers; it could expand to include immersive entertainment and so much more. The app opportunities alone are broad, and the options for brands only increase with the application of machine learning and augmented reality.
The connected car represents a new device that marketers can tap into as a part of their omnichannel advertising strategy. As availability and adoption rates climb, it’s usefulness as a touchpoint with consumers will continue to present new opportunities. Now is the time to investigate connected cars more thoroughly and determine what role they might play in your marketing future.