Get ready to have a conversation with your car.
The generic Web is grinding through its commodity end-game, with prices for both advertising inventory and content falling. And the mobile Internet is reaching early middle age, with worldwide cell subscribers flattening, and the app market tightening into narrow device-oriented silos. But one end of the digital content beach is enjoying a vivid adolescence: in-car media, infotainment and support services.
Arbitron estimates that drivers spend an average of two and half hours a day in their cars, and Ford Motor Company data estimates that roughly an hour and ten minutes of that time is spent going slower than 6 miles an hour. This gives consumers a newfound "mobile leisure time" that they seem more than happy to fill with next-generation communications and technology.
The University of Utah estimates that more than half of teenagers text while they drive. And Ford says that of 60 million active Pandora online music service users, 20 million use the service via a mobile app, and 10 million of them use that mobile app in their cars. Arbitron estimated in April that one in four Americans have hooked an iPod, iPhone or other MP3 player up to their car's stereo. "The car is clearly a crucial battleground for people's attention," says Larry Rosin, president of Edison Research (which conducted the study with Arbitron).
customer is becoming the customer," says Amit Singhal, Google Fellow, and a creator of Google's core search technology. "And as the car evolves, how we place information in that car has to
evolve. We fully expect to be there step-for-step with that new mobile audience." The entire car industry, and the marketing industry that supports it will be there, too.
In March, the Ford Motor Co. announced that its in-car infotainment and communications system, Sync, was installed into its 2 millionth vehicle. And its so-called MyFord Touch technology, the next major Sync upgrade due out in the spring, will feature an in-car Wi-Fi hotspot, Web connectivity using the driver's digital cell phone access, support of fancy media standards like SD cards, and active deployments for once Web-only apps like Pandora and OpenBeak.
"We want to start acting like a consumer electronics company," says Doug VanDagens, director of connected services at Ford, "and less like a car company."
And where Ford goes, so goes GM. America's largest automaker, bankruptcy or no, won't be left behind in the smartening of the American auto. Its cell phone-based OnStar safety and communications system is now in roughly 6 million vehicles. And its new all-electric Chevy Volt will highlight a wireless remote control application and other in-car intelligence features that use a standard BlackBerry to control car doors and other in-car telematics. Even more remarkable, these American makers are actually leading the international pack - yes, American auto companies now have the pole position for connected cars.
Though Europe isn't going to be left at the starting line: Audi earlier this year announced a deal with video card maker Nvidia to place once-unthinkably powerful image and media processing tools inside Audi dashboards. Audi models like the A6 now sport navigation and control systems featuring 3-D topology, real-time traffic, and anticipatory driving and routing instructions.
And Mercedes-Benz, never one to fall behind, also earlier this year upgraded its Mbrace security and navigation to include remote entry and cell phone-based vehicle location with access provided by Verizon Wireless. And this year, Kia Motors began shipping a Sorento with its so-called UVO touch-enabled smart system with Bluetooth phone pairing, full iPod support and navigation features.
All the brains being jammed into the once-dumb car has attracted the attention of the Web's interactive smart set. Microsoft,
which powers both the Ford Sync product and the Kia UVO system, has a fully fleshed-out Microsoft auto division that acts like any automotive-parts supplier. And the threat has jump-started the
old-world, once-clubby auto industry.
Earlier this year, traditional car-parts maker Continental AG, which makes everything from tires to air compressors, showed a working prototype for a touch-enabled, app-based in-car automotive interface that runs on Google's Android operating system, which was why it looked and felt eerily like a Nexus One or Droid. And Japanese parts maker Denso rolled out an early protoype of its Blue Harmony touch-activated in-car screen that promised similar integrated Web interactivity and connectivity, also due out at the end of 2011.
"The entertainment component of the smarter car is critical to how we see our company developing," says Helmut Matschi, member of the executive board for Continental AG. "And most other car-parts makers share that same vision."
This whole mix of new auto intelligence has been turbocharged by a new generation of cellular spectrum and connectivity solutions from both traditional cell phone providers and next-gen wireless content competitors. Sprint said in March that by the end of 2010, its 4G wireless data network, which is certainly powerful enough to support in-car media, will service 120 million Americans, including car meccas Los Angeles and Miami.
And AT&T and Verizon, locked in a death-grip struggle over network quality, with the latter rolling out its next-gen LTE networks by year's end. And that ignores the mobile content sleeper: mobile television. The analog-to-digital TV spectrum migration is yielding some benefits: Mobile TV players like FloTV are beginning to offer robust mobile TV feeds for local markets.
All of this makes in-car mobile opportunities that much richer.
"As car companies and carriers recognize that the 'connected car consumer' is the same 'connected digital consumer' the wireless and CE industry are pursuing," says Tim Johnson, emerging solutions manager at Sprint Nextel, "it is only sensible to mesh efforts to reach those groups. "
There is a catch, of course. As fast-growing and diverse as the in-car market is, almost all in-car entertainment, navigation, security and driver-assist technologies will share a common factor: Though they all feature sophisticated new screens, advanced software and brand new interfaces, the backbone of the technology will be AM-radio simple: The driver's voice will be the backbone of the smart car.
"Carmakers are ridiculously risk-averse," says Michael Austin, technical editor for Car & Driver magazine. Austin says that while carmakers get little credit for doing a good job of adapting new technologies to cars, they still battle near-paralyzing fear of being tarred by a technology gone bad, à la Toyota and gas pedals. Drivers getting distracted during new-media sessions and causing terrible harm is a major concern. And voice-activated interfaces are seen as the only viable solution for safely offering a reasonable interactive experience.
"Consumers have this long memory," says Austin. "And makers don't want to be seen as making that next mistake."
Remarkably, there is one major player in the current auto-ecosystem that has not staked its place in the smart-car sweepstakes: marketers. Almost to the one, car-parts vendors, carmakers, analysts and communications providers all point out that most mobile ad start-ups of any size, like Lat49, Quattro and GrayStripe, focus on the larger mobile market for personal cell phones, and not on the specific issues and challenges of autos. They also point out that there has been no advertising-based land grab, à la DoubleClick of the late Internet bubble '90s.
And, in fact, the only media company of any scale to have an active auto-based ad play is Google: The company rolled out, as part of the Android 2.0 upgrade and Nexus One cell phone product, a voice-activated auto-based interface for its Google Maps Navigation app. The app understands voice commands, generates position and does basic search functions for drivers, over any Android phone, with the system tying directly into Google's expanding Maps and local keyword ad offering.
"There is a bit of a Wild West going on. And nobody has gotten organized," says Nick Pudar, vice president of planning and business development for OnStar. Pudar says he sees potential in location-based coupons aimed at motorists, sponsored connectivity to overcome the cost of pricey subscription fees, and marketer placement in and around car telematics like oil change information, maintenance, system malfunctions and even low gas or oil warnings."There are a range of category needs that, with the right execution, can work," Pudar says. "But most definitely, we are not allergic to marketers' role in the process. And there are no clear winners yet."