• by Jonathan Blum , May 14, 2010

Mobile marketers may be missing their wheels

America's Mad Men might be going mobile - but not from behind the wheel of their cars.

Mobile advertising on portable devices and smartphones - either with sponsored content, direct advertisement or via installed apps - is looking like the sole survivor in today's dead-man-walking ad market: Mobile billings are expected to touch $4.1 billion this year, up 24 percent from last, according to Juniper Research, the UK-based telecom and mobile analyst firm, with total turnover expected to hit $12 billion by 2015.

This gusher of ad cash has made mobile top-of-mind with the techno elite: Both Microsoft (with its Phonevalley partnership) and Apple (with its Quattro acquisition) have mobile irons in the fire. And the new iPhone OS 4 specifically features iAds, a soon-to-be-released mobile ad platform. Mobile is so red-hot now that antitrust is the looming issue: The Federal Trade Commission (FTC) is toying with challenging Google on its late-2009 purchase of mobile marketing giant AdMob.

But despite all this mobile movement, one lucrative - and likely - home for ads on the go is standing still: marketing inside vehicles.

It's not like cars are not smart enough for Madison Avenue. Automakers such as Ford, GM, Daimler, Kia and Audi have all begun deploying sophisticated in-car infotainment, telematics and navigation systems. Ford will roll out an upgraded Sync in-car system called MyFord Touch for the 2011 model year, in partnership with Microsoft. And in March, GM launched a multifaceted mobile smartphone app that remotely controls the all-electric Volt using its OnStar mobile platform. In China, Rowe Vehicles, a luxury brand manufactured by the Shanghai Automotive Industry Corporation (SAIC), recently showed the Rowe 350, a Google Android-powered, GPS-enabled computer. And Intel is working with automotive OEM supplier Visteon to create a system know as "The Connected Car."

"We are looking to start a conversation between the car and the driver," says Walt Dorfstatter, president of OnStar. "It's certainly the future of OnStar and I would not be surprised if it's the future for the larger automotive industry as well."

Still - and keep in mind that automotive is one of the few remaining high-dollar clients left in advertising - advertisers have yet to focus significant resources on selling to consumers inside cars.

"Auto manufacturers have been very smart about tapping into the mobile market," says Erin "Mack" McKelvey, senior vice president of marketing at Millennial Media, a large, independent mobile ad marketing firm in Baltimore. She says the mobile marketing world is in its land-grab phase and automotive is not yet seen as an end-game. Instead, McKelvey says in-car advertising is considered a niche, with no real marketer yet focused on the vertical.

"There are no prohibitors right now," says McKelvey. "It's just about focus."

Unsafe At Any Speed
Much of the drag that keeps in-car marketing from getting started is beyond advertiser control. Advertisers face an automotive industry that, until recently, refused to parley with outsiders. Detroit, Stuttgart and Toyota City have tended to do business with a select group of known automotive parts suppliers like Visteon, Continental and Denso. This not only divided the car business into discrete fiefdoms that challenged new business, but autos also were made in design cycles that were measured in decades - way too slow for the near-ADD advertising world. "The automotive market has traditionally been locked," says Tom Murphy, senior editor of Ward's AutoWorld, a Pontiac, Mich.-based automotive content and analysis firm. Murphy says carmakers like Ford have made much media hay about reinventing themselves to innovate at the speed of say, the consumer electronics and advertising industry. But in reality, carmakers are big, change is slow and it is still difficult for outsiders to break in.

"It's changing," says Murphy. "But it's still the car business. Change takes time."

Marketers also face a larger consumer electronics challenge: Mobile devices, as a sector, struggle to adapt to cars. Yes, the iPhone, Droid or Nexus One can be easily modified to nominally function in vehicles. Google's $55 well-designed car dock comes with a 12-volt connector and built-in speakers. And Korean after-market gadget maker Dual Electronics manufactures a $200 GPS adapter that turns a basic iPod Touch into a nav-savvy, in-car multimedia device.

But spend any time actually driving with these units, and what works while walking - portablilty, sleeknees and hip touch-based apps - quickly becomes a struggle. Most mobile devices have small screens, multistep user-interfaces and poor form factors for cars. And worse, all these combine to make most generic mobile devices unsafe for use behind the wheel.

"There is definitely a desire to contact in-vehicle consumers," says Mary-Beth Kellenberger, an automotive and transportation analyst for Frost & Sullivan, an international technology research firm. But Kellenberger says the market faces the challenge of adapting these modern technologies into vehicles so they do not distract drivers.

"Any attempt to expand the market is being challenged on a number of fronts because of the safety risks they pose," says Kellenburger.

Both federal and local governments have recently been on a drum march against distracted driving. Their ammo is data from the National Highway Traffic Safety Administration, which shows that in 2008 nearly 6,000 people were killed and more than a half million were injured nationwide in crashes involving a distracted driver. In early April, a federally funded pilot program was launched in Connecticut targeting drivers using their mobile devices while driving. Oprah Winfrey has aimed her mighty hammer at the issue, asking her army of admirers to declare their cars "no-phone zones" and helping to launch the first national "No-Phone Zone Day."

 
The Jump Starts
Despite the hurdles, there is some early momentum for in-car selling. Up-and-coming in-car infotainment options include text-to-speech devices that read your text messages to you, voice recognition for safer interaction with systems while driving, and info on local restaurants, gas stations and the like, says Phil Ames, segment marketing manager for the Embedded and Communications Group at Intel.

And there are fascinating early experiments: In March, NAVTEQ, the Chicago-based mapping and navigation company, trumpeted an in-car coupon deal with McDonald's in Finland, with 82 locations participating. When drivers on Nokia phones came into a certain distance of the restaurants, a 1-euro cheeseburger coupon was pushed to their phones using NAVTEQ's Media Solutions tools. The company claimed a 7.2 percent click-through, about 20 times the normal Web-wide click average. Responders were then offered driving instructions - and remarkably, an unheard of 40 percent of those clicked through for step-by-step directions.

"NAVTEQ's LocationPoint lets advertisers offer relevant promotional offers, advertisements and coupons to potential customers who come near the stores," says Danny Kim, an analyst at iSuppli, a El Segundo, Calif.-based firm who is familiar with the technology. Kim believes this sort of map-based marketing will be the beginning of in-car advertising in the United States. And he expects the platform will open a third-party app market, similar to Apple's App Store, which could create an rich environment for in-vehicle advertising that could help overcome the challenges of driver safety and the complexities of selling into the auto industry.

No matter what, marketers need to know they won't have this virgin in-car marketing terrain to themselves for long. Media giant and marketing strip-miner Google is setting up the heavy equipment to rip into this marketing mountain with gusto.

Besides porting its Android platform into several in-vehicle products, the company is already shipping a Car Home app standard on most Android devices. This simplified, car-oriented interface ports voice calling, nav and search features for drivers, and links directly to Google's profit-challenged Google Maps, Google AdWords and other struggling local products. Google declined to comment for this story, but those close to this space know that the company will not be shy about getting into the space.

"It's all about mobile consumer engagement - and the marketing giants know it," says mobile marketer McKelvey. "Cars are a huge opportunity from which to hang many products and services. Whoever gets here first, and can defend what they do, is going to make out."