VINCE BOND JR.

How self-driving cars could change the future of marketing

Automotive News | July 22, 2013 - 2:32 pm EST

Self-driving cars may be a long way from becoming part of daily life, but people are already dreaming up futuristic ways for restaurants, retailers and other businesses to reach consumers -- potentially a dramatic transformation of the marketing and advertising landscape.

Imagine, for example, a Web campaign in which a retailer at a mall sends a self-driving vehicle to a consumer's home, gives the consumer a ride to the store and then a ride back home.

Or, say, a couple is looking for a new restaurant for dinner. One Web search later, and the car gives them a ride to the restaurant.

There are "all kinds of interesting business models that I foresee coming out of self-driving vehicles; that includes doing shopping and e-commerce, including even having a free ride," said Thilo Koslowski, an analyst at Gartner Inc., a technology research firm in Stamford, Conn.

It's a future in which autonomous vehicles become access points for eager brands, possibly leading to new revenue streams for automakers -- in cooperation with advertisers and network providers such as AT&T -- that could profit from data collected from passengers.

And then there are openings for players such as search giant Google, which has logged more than 500,000 miles testing its self-driving technology, to make money through location-aware search content and the automated driving software itself.

Google's self-driving technology will know where a person is driving, how fast he's moving and what direction he's heading, which could open pathways for businesses to take advantage of predictive search functions.

Integrating Google Now -- a voice-activated personal-assistant app that uses search and location history to make suggestions -- with a vehicle could help a company such as Starbucks, for example, connect with customers.

The chain of coffee shops could have a data feed available that lets people know whether nearby locations are busy -- allowing them to route the automated vehicle to the desired spot, said Mark Boyadjis, an analyst at research firm IHS Automotive.

So should you expect Google to partner with McDonald's and suggest its restaurants to motorists in self-driving cars every time a restaurant is near?

Boyadjis said no because that would go against Google's mission to provide unbiased search results.

"That gets to the sticky edge of pushy advertising, which Google doesn't want," Boyadjis said.

Advertising paradigm

Toyota Motor Corp., focused on developing active-safety systems, hasn't thought much about potential changes in the advertising world, a spokeswoman said.

The automaker unveiled its active-safety research vehicle, based on a Lexus LS, at the International Consumer Electronics Show in Las Vegas in January. The vehicle is outfitted with "sensors and automated control systems to observe, process and respond to the vehicle's surroundings," according to the company.

"We haven't given much consideration to how a self-driving vehicle changes the advertising paradigm we're currently operating in," said Cindy Knight, a Toyota spokeswoman, in an interview. "Mostly, we look at it from a safety standpoint and how we can improve the safety of our current vehicles by developing these driving support systems."

Meanwhile, Audi spokesman Brad Stertz said autonomous driving "as a fully formed concept" is still a decade off at least, so it's too early "to focus in on specific plans or opportunities."

Audi was granted a license to operate autonomous vehicles on public roads in Nevada, the automaker announced in January.

A Google spokesperson said the company doesn't have anything to share at the moment about potential advertising opportunities stemming from automated vehicles.

Boyadjis of IHS said: "They're an ad company. That's where their bread and butter is. That's a core reason for them to do almost anything."

Vehicle ownership

Although Koslowski said he hopes advertising within self-driving vehicles doesn't turn into spamming, he foresees scenarios in which people would accept sales pitches if they get services at discounted rates or even for free.

This is the same model seen on Pandora Internet Radio, which has a free version with advertisements and a premium ad-free offering.

For instance, a person could summon a vehicle to take her somewhere for free, but she'll have to sit through some advertising she can't turn off.

Going even further, Koslowski thinks the traditional vehicle-ownership model could be transformed.

It's possible that, instead of buying a vehicle, consumers could sign up for access to an autonomous vehicle program that provides a "personal transportation access solution," Koslowski said.

He sees an ecosystem business model in which automakers, advertisers who want to reach customers in a vehicle and network operators such as AT&T come together and generate revenues through data collection.

"All of these things have to come together so we can figure who gets what share of the monetization opportunity," Koslowski said. "If you do this right, and the customer signs on for 10-year access to an autonomous vehicle program, I could imagine that the benefit you get from the data collecting and the opportunity to get to interact with the customer will pay for the cost of the vehicle."

Vince Bond Jr. is social media coordinator for Automotive News.Vince Bond Jr. is social media coordinator for Automotive News.

PRINTED FROM: http://www.autonews.com/apps/pbcs.dll/article?AID=/20130722/BLOG06/130729984&template=printart

Entire contents © 2014 Crain Communications, Inc.