How connected cars will change more than how we drive

While my colleague Tim was exploring the behavioral economics of the changing healthcare space, I decided to pursue the world of connected objects. I was keen to explore how the connection of everyday things can change fundamental human behavior and, in doing so, open up new ways of marketing that provide value for both brands and consumers alike.

Given Chevy’s prominence at the conference, the biggest connected object (both literally and figuratively) talked about was the car. Much of the discussion tended toward the driving experience. Peter Skillman of Nokia’s Here gave a compelling discussion in “Design the Connected Car,” from which I took away three key points:

  • The driving experience starts before you leave the house. You’ll be able to look up your route before you leave and that information should be available when you pull out of the driveway.
  • Connected cars are the next mobile phone. A vast majority – 80% – of teenagers in the U.S. (and a huge market for first-time car purchasers) sleeps with their mobile phone near their bed. A well-designed “smart” car will connect with its driver at an emotional level, and automakers should take note.
  • A connected car learns how to drive you. The driving data collected by the car can learn the driving habits of its owner and can optimize its performance based on what it knows.

I also had the opportunity to check out Team Detroit’s panel discussion, “The Internet of Cars.” Where Skillman was interested in the connected car’s relationship with the driver, this panel was more interested in the possibilities unlocked when all of the cars on the road are connected together.

  • Connected cars are a hardware and software ecosystem. The majority of cars have systems that stay the same the minute they roll off the lot. Cars that are updated over the air similar to iOS or Android (or the Tesla Model S) will change the way consumer think about their dash system, and will contribute to purchase decisions.
  • Collective auto data makes for better traffic predictions. Consider our windshield wipers. When connected to location services, knowing when wipers were engaged (along with the wiper speed) can give more accurate weather data than what can be provided by satellite.
  • Connected cars will drive the reemergence of radio. Heidi Browning, SVP of Strategic Solutions at Pandora, made the astute point that half of the music we listen to we hear in the car. Connecting listening behavior with driving data can enable better ways to monetize digital radio. Imagine being able to serve a radio ad for McDonalds Premium Roast Coffee for a driver on a road trip just before they pass a McCafe. 

Given that only 2% of cars on the road are connected, the opportunities provided by connecting cars to the cloud (and to each other) are just starting to emerge. The opportunities and implications for automakers, as well as anyone else who designs experiences for drivers are understandably significant.

  • Connected Cars Drive Loyal Consumers. Automakers should understand that the connected car experience will likely be one of the most influential components of the purchase decision, and thus is an enormous opportunity to establish an emotional relationship with a driver.
  • Automakers will likely be data providers. Connected cars collect on average about 25MB of data an hour – and that doesn’t include information that isn’t being collected currently that will be soon. That data will be incredibly valuable to automakers, and there’s already legal battles to who owns this data and its implication on driver privacy.
  • Streaming Music will provide new revenue opportunities. The integration of streaming music services like Pandora and Spotify into car entertainment systems, coupled with the emergence of Apple’s CarPlay and Google’s OAA will open new opportunities for media agencies and networks. The data provided by the car can give new, scalable ways to reach drivers in more relevant and contextual ways, making possible the reemergence of the fading traditional medium.

In the short-term, the platforms that enable connected cars are incredibly fragmented – from Ford’s open-platform AppLink to devices like Automatic (which plugs into a supported cars ODB-II port). This emerging platform is proving a fertile ground to disrupt the automotive industry and beyond.