Cars are getting smarter with every new model rolled out. Some of them may soon not need you ever touching the steering wheel in order to bring you from A to B. But even those which still require some manual input rely on the extensive amount of data they collect and proceed. This data may soon be harvested, marketed and sold to third parties, just like all those personal details and preferences you are so happy to share on social networks. For about two decades car makers were installing wireless connections and sensors in vehicles which collect and use data of various sorts.
And the enormous volume of this data proceeded by software and sensors at ever-increasing speeds, combined with artificial intelligence in some vehicles, has a potential to become a viable basis for Emerging new services and revenue streams.
Built-in car assistance software to be used for advertising and marketing
Imagine you driving home one evening, your mind focused on the outstanding to-do list, and then suddenly, as you pause at a red light a groceries shopping list appears on your dashboard screen, together with a choice of local supermarkets, driving directions and parking availability. Would you feel delighted, pleasantly persuaded, or perhaps annoyed? Telenav Inc., a company developing in-car advertising software, counts on your complacency or at least indifference.
Carmakers it sells their solutions to, keen to find extra revenue sources, hope you would not mind much. What this data can be used for, one would ask? Examples may include market researchers using anonymized data from trunk sensors to see if users bought anything substantial last time they drove shopping, which would be a more accurate proxy for consumer sentiment than satellite photos they currently rely on.
Banks may want to check if their customers stopped driving to work, while credit card providers might be willing to offer a tailored loan to someone whose car just broke down.
Aggregated consumer preferences database may be ultimate goal
Cited by Bloomberg, Roger Lanctot, a consultant for Strategy Analytics, believes that carmakers already recognize customer data their vehicles gain access to may be of considerable monetary value, not unlike users search activity online.
The big dilemma they are now facing is whether they can monetize all the driver data their cars are capable of collecting without alienating customers or risking a backlash from legislators, not unlike the 2015 diesel emissions scandal. According to Mr. Lanctot, the car manufacturers ultimate goal would be building a database of consumer preferences, both anonymized and personalized, that could be aggregated and sold to third parties for marketing purposes, similarly to what Google, Instagram, and Facebook already do.
Software developers ready to use new opportunity window
And there are already companies ready to jump on the emerging opportunity. One is the above mentioned Santa Clara based Telenav Inc which already established its presence in Germany, Japan, Romania, China, and Brazil.
Services the NASDAQ listed wireless location-based services corporation provides include GPS navigation, local search, automotive navigation solutions, mobile advertising, enterprise mobility and workflow automation. The company acts as a digital broker as it filters and structures data it collects for carmakers while prompting drivers to select via a mobile app which information they will share with which companies in exchange for discounts or rewards. Otonomo, another major player in this field, is already running pilot programmes with 10 car companies and 11 automotive firms, Daimler AG among them, and has a list of more than 75 third-party clients. These include insurance companies, auto mechanics, petrol stations, city planners, and fast-food outlets.
The less than three years old Israel-based startup secured last week a $3 million investment from NTT Docomo Ventures Inc. According to a recent report from Bloomberg, more than two million vehicles in the US are already tapped into the data exchange.
