Marketers, Start Your Engines
Now that Apple has entered the connected car market, expect it to take off. It's not likely to be an iPad-like explosion -- people can't run out and buy a car with the same spontaneity as purchasing a tablet. Still, a few years down the road, every new car's dash is going to look different. Every new car will be connected to the Internet -- and advertisers will have a brand new playground.
Mar 13, 2014 9:26 PM PT
The connected car may be zooming into the mainstream: Apple has officially entered the market. The debut of CarPlay comes nearly a year after Apple first previewed iOS in the car, tweaking the platform to move Siri, Maps and other services to the dashboard.
Apple showed off CarPlay and announced new partners Ferrari, Mercedes-Benz and Volvo early last week at the Geneva International Motor Show. This week, it introduced iOS 7.1, an update that integrates mobile devices with CarPlay systems built into dashboards.
Apple's entrance is not the first connected car initiative, although it probably is the splashiest. Google's open Automotive Alliance will support Android in automobiles later this year. BlackBerry already has a surprisingly large piece of this market -- and its reach will grow when Ford Motor adopts its system for its next generation of Sync in-car infotainment, as recently announced. Another player -- the one ditched by Ford in favor of BlackBerry, as a matter of fact -- is Microsoft, which is promoting its Windows Embedded Automotive.
Still, there is something exciting about Apple entering the market. There's a widespread expectation that Apple will render this complex and geeky technology not only consumer-friendly, but also beautiful, sexy and ubiquitous.
Marketers better be ready.
Yes, marketers. While early adopters will be focusing on the music, videos, maps and directions a connected car can provide, app developers will be racing to develop a whole new ecosystem of products and applications aimed at the connected car driver. These products and applications likely will be supported by ads.
Global connected car market shipments will reach 59.86 million units, totaling US$98.42 billion, by 2018, predicted MarketsandMarkets.
"Future generations will rely more on cloud-based backend systems for content, information, and services," states a recent report. "This turning of car into a huge data repository will open new avenues of business opportunities for service industries such as insurance and content providers such as Spotify."
Software to keep the car maintenance up to date will play big. After that, as connected cars become more common on the road, auto security apps and advertising likely will grab significant revenues.
If this all seems far off, consider this: AT&T already is preparing its back-end billing functions for car connections. It recently tapped Amdocs to develop a bill product that can divvy up the connectivity charges for separate services in the same car. The consumer might be billed for such apps as navigation and entertainment, while automakers might foot the bill for telematics and safety service charges.
Another Connection, Another Channel
Farther down the road, brands in all categories will have to contemplate a customer service world that houses yet another channel to support: the car.
Companies that were slow to support Twitter or Facebook were burned by irate consumers. Expect the same reaction when a request for help or service is sent from an automobile-based app or connection, and a brand flounders in response.
Who Owns the Data?
More than likely, brands will clamor for the opportunity to access customers in their cars. As mobile marketing case studies have proved, early ads tend to be more eye-catching than established ad formats.
A better way for brands to prepare would be to make certain they have access to -- if not ownership of -- this particular slice of the customer data.
The aftermarket automotive service industry already is nervously watching these developments. It has painted dire pictures of Jiffy Lube franchise owners watching in despair as former customers drive their connected car past them to their dealership for service.
Embedded vehicle connectivity systems by auto manufacturers represent a tangible threat to the aftermarket industry, Scott Luckett, chief information officer for the Automotive Aftermarket Industry Association has said.
Manufacturers "claim ownership of most, if not all, of the data generated by embedded telematics systems," he observed. "Thus car dealers are first in line to get repair and maintenance data."
And, of course, other data as well.