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January 29, 2016
Ben Cohen

Why Connected Cars Matter to Marketers

The “connected car” is a widely discussed and buzzworthy topic–however, it also happens to be a widely misunderstood and undefined topic. Ask one person, and his definition of connected car might reference headline-grabbing stories about Google’s self-driving vehicles. Ask another person, and her definition might reference playing music from Pandora on her car stereo. And they would both be right.

The connected car is not a fantasy; it is already here today in various forms (e.g. smartphone connectivity via USB, on-board GPS system, vehicle-to-vehicle safety sensors). The connected car is not a single technology or functionality; it comprises a multitude of technologies and functionalities. Here’s a quick primer on the connected car, and more importantly, three key opportunities for marketers.

Connected Car Context

The connected car has become a relevant and valuable opportunity due to the convergence of advanced vehicle technologies and consumers’ demand for seamless connectivity in their lives. For example, on-board diagnostics, or vehicles’ computing systems, have existed for more than 25 years. But only recently, due to consumers’ expectations for constant connectivity and its benefits, have car makers made data from these systems available to drivers and other companies.

The connected car, therefore, is advanced vehicle technologies (e.g. sensors, computers) coupled with a rich and robust external information and connectivity infrastructure (e.g. location-based information, e-commerce and payments, social networking) in a way that delivers new or better benefits for drivers and passengers.

Why This Matters to Marketers

The connected car offers three key opportunities for marketers: to learn and generate new insights from consumers’ behaviors; to deliver new and better value to consumers; and to communicate with consumers in a hyper-relevant way.

#1: Learn and generate new insights from consumers’ behaviors

As good marketers, we obsessively think about our consumers and how to best serve their needs in a unique and valuable way. And that understanding of our consumers and their needs is ideally founded on robust, meaningful data. The connected car represents a rich, new data source for enabling better insights and understanding of our consumers (e.g. common routes, commuting and shopping timeframes and routes, media consumption). The value of this data explains the jockeying for position by companies like Google, SAP and IBM to act as data gatekeepers.

For companies and brands already associated with consumers and their vehicles (e.g. manufacturers, gas and oil companies, insurers), the learning opportunity is understandably significant. From driving habits to vehicle maintenance behaviors, connected car data signifies a key opportunity for developing a more nuanced perspective on certain consumer behaviors that directly affect these businesses.

For companies and brands that are not primarily associated with consumers and their vehicles, the learning opportunity will vary. For example, a news and entertainment publisher could use connected car data to supplement and improve its perspective on content consumption behaviors for different consumer segments: what genre of content are consumers listening to and when, which formats of content are consumers using and when (e.g. traditional radio, streaming music, podcast), how are consumers accessing their content (e.g. smartphone vs. car system)?

The implication for marketers is that connected car data may represent an opportunity for developing new and unique insights into certain consumer behaviors. And as a new source of data, connected car information could lead to insights that competitors do not have.

#2: Deliver new and better value to consumers

Connected car data also represents an opportunity to better address specific consumer needs, wants and pain points with new or improved services that leverage that information. Uber is an example of an entire business leveraging vehicle location and availability data in a simple yet disruptive way. And other seemingly simple yet disruptive services will arise by leveraging specific consumer and vehicle data (e.g. location, maintenance needs, time of day, common routes) to better address consumers’ needs, wants, and pain points.

Imagine a service that conveniently addressed car maintenance needs (e.g. gas fill, oil change) while you worked or slept. Or a service that seamlessly (and safely) facilitated dinner takeout orders on especially delayed evening commutes. Or a service that informed you which vehicle maintenance to take care of now versus later based on your driving habits, vehicle characteristics, and local weather and road conditions.

The implication for marketers is that connected car data may represent an opportunity for developing new and better value for consumers is it’s delivered in a way that is compelling, easy, and safe for drivers and passengers.

#3: Communicate with consumers in a hyper-relevant way

A third opportunity for marketers in the connected car is communicating with consumers in the moment of a potential purchase. An example would be a gas station that, recognizing your near-empty tank and proximity, offers a per-gallon discount if you patronize its location when you pass by in 5 minutes. Another example would be a grocery store that, based on your online shopping list and quicker-than-normal commute, offers to have those groceries waiting when you drive by in 10 minutes.

Car time is still a primarily private space and time for drivers and passengers. However, when brands offer drivers and passengers an incrementally valuable, safe and ideally delightful offering, certain consumers will “opt in” and provide access to that private space and time in the car for specific purposes.

The implication for marketers is that the connected car presents data and communication channels for engaging consumers with the “right offer at the right moment” while in the car. Developed and executed effectively, these “micro-moment” communications signify an opportunity for marketers to stand out from competitors by delighting consumers with highly relevant messages that capture business in the moment of consideration.

The connected car is an exciting potential opportunity for marketers to better learn from, develop offerings for, and communicate with consumers. With the new data and technologies represented by the connected car, it is likely that brands will need to consider partnerships and data capabilities to address current gaps in their organizations. Ultimately, the connected car opportunity is about serving consumers better, which means the opportunity is best addressed by marketers generating meaningful insights to develop and deliver unique value to consumers.

 

Ben Cohen is a Vice President at the Boston-based growth strategy consultancy Denneen & Company, where he heads up the Consumer Practice and does brand and marketing strategy work with clients including ExxonMobil, Johnson & Johnson and Partners Healthcare. Connect with him on LinkedIn and follow him at @strategic_brand

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