Say you can’t afford fancy features like embedded navigation or the ability to start your car through a mobile app. The original automaker will install them for free, so long as you’re willing to tolerate the occasional pop-up ad while idling at a red light. Owners of luxury cars won’t have to suffer such indignities, since the higher price tag paid likely would have already included an internet connection.
“For the luxury car, it’s their safe haven, it’s their quiet time,” said Ky Tang, director of business development at Telenav. Tang says his research shows “strong receptivity” among low-end and middle-tier vehicle owners to look at ads in exchange for free services in the car.
“This is a business model that has been proven many times over on web and mobile,” he said.
The pop-up car ads could generate an average of $30 annually per vehicle, to be split between Telenav and the automaker. He declined to say whether anyone has signed up for the software, which was just unveiled at CES, but added Telenav is in “deep discussions” with several manufacturers. Because of the long production cycles of the industry, it’ll be about three years before the ads will show up in new models.
The kinds of car-data tools in play today are much smaller scale. General Motors Co., which pioneered the connected car with its OnStar concierge service, sent a software update to million of vehicles in December, introducing an e-commerce system that lets drivers order coffee or make restaurant reservations while driving—to the chagrin of some safety advocates. Longer term, GM may look to monetize traffic and parking data it’ll collect as its self-driving cars get on the road next year.
More automakers will soon be launching e-commerce features similar to GM’s, according to Xevo, the software company that helps power Marketplace. Bringing Starbucks or Dunkin’ Donuts into your car lets manufacturers earn back some of the money they spend on telematics and forms a direct relationship with drivers, something they’ve traditionally relied on dealers to do, said Dan Gittleman, Xevo’s CEO.
If consumers want to take advantage of these kinds of new connected features, especially making purchases while driving or using ride-hailing apps, they’ll have to give up at least some privacy, said Mike Abelson, vice president of strategy at GM. He said the company isn’t currently selling data to third parties.
“We’re not considering that,” he said. But he added: “I wouldn’t want to make a statement for forever.”
This article was provided by Bloomberg News.