Sun, Feb 25, 2018 page15

• The car of the future might come with pop-up ads

  Automakers looking to squeeze more profits out of drivers are considering selling user data to third-party firms to have personalized ads appear on dashboard screens in exchange for small perks and theft protection

  • By Gabrielle Coppola and David Welch / Bloomberg
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  Picture this: You are driving home from work, contemplating what to make for dinner, and as you idle at a red light near your neighborhood pizzeria, an ad offering US$5 off a pepperoni pie pops up on your dashboard screen.

  Are you annoyed that your car is trying to sell you something, or pleasantly persuaded?

  Telenav Inc, a company developing in-car advertising software, is betting you will not mind much. Car companies — looking to earn some extra money — hope so, too.

  

  An attendee looks at Ford Motor Co’s self-driving delivery vehicle at CES International in Las Vegas on Jan. 9.

  Photo: AP

  Automakers have been installing wireless connections in vehicles and collecting data for decades.

  However, the sheer volume of software and sensors in new vehicles, combined with artificial intelligence that can sift through data at ever-quickening speeds, means new services and revenue streams are quickly emerging.

  The big question for US automakers is whether they can profit off all the driver data they are capable of collecting without alienating people or risking backlash from Washington.

  “Carmakers recognize they’re fighting a war over customer data,” said Roger Lanctot, who works with automakers on data monetization as a consultant for Strategy Analytics. “Your driving behavior, location has monetary value, not unlike your search activity.”

  Automakers’ ultimate objective is to build a database of consumer preferences that could be aggregated and sold to outside vendors for marketing purposes, much like Alphabet Inc’s Google and Facebook Inc do, Lanctot said.

  Auto executives say that data crunching will allow them to build a better driving experience — enabling cars to predict flat tires, find a parking space or charging station, or alert city managers to dangerous intersections where there are frequent accidents.

  Data collection could even help shield drivers from crime, Ford Motor Co chief executive officer Jim Hackett said last month at the CES technology trade show.

  “If a robber got in the car and took off, would you want us to know where that robber went to catch him?” Hackett asked the audience during a keynote in Las Vegas. “Are you willing to trade that?”

  It was hardly a hypothetical question. Car companies are betting if they offer you the right carrot — discounted car insurance, a coupon at the gas pump — you will share your data without blinking, just as you do when you post on Facebook or type a query into a Google search.

  “The benefit there is hopefully an improved relationship, so we know you better, we understand you better and we’re able to deliver better services to you,” Ford’s executive director for connected vehicles and services Don Butler said in an interview in Las Vegas.

  The potential to share data — both anonymized and personalized — with third parties represents the biggest opportunity, Butler said.

  Like most auto executives, he is quick to point out that customers will have the choice to opt in to services that require sharing information, such as their location or driving habits.

  Of course, not all drivers might understand what privacy rights they are signing away.

  A US Government Accountability Office report published in July last year found none of the 13 automakers in the study that collected data from connected vehicles had easy-to-read privacy notices and most do not explain data sharing and use practices.

  The US Federal Trade Commission has jurisdiction over consumer data and privacy, but there are no specific rules for the auto industry, said Lauren Smith, a policy lawyer at the non-profit Future of Privacy Forum.

  Instead, automakers came up with their own set of privacy principles, which are enforceable by the commission.

  Telenav has been testing a “freemium” model borrowed from streaming music services to entice drivers to share their data.

  Say you cannot 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 as long as you are willing to tolerate the occasional pop-up ad while idling at a red light.

  Owners of luxury cars will not 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,” Telenav business development director Ky Tang said.

  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, Tang said.

  “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 US$30 annually per vehicle, to be split between Telenav and the automaker.

  Tang declined to say whether anyone has signed up for the software, which was unveiled at CES, but added that Telenav is in “deep discussions” with several manufacturers.

  Because of the long production cycles of the industry, it would be about three years before the ads show up in new models.

  The kinds of car-data tools in play today are much smaller scale. General Motors Co (GM), which pioneered the connected car with its OnStar concierge service, in December last year sent a software update to millions of vehicles, 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 might look to monetize traffic and parking data it will 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, said Xevo Inc, 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 have traditionally relied on dealers to do, Xevo chief executive officer Dan Gittleman said.

  If people want to take advantage of these kinds of new connected features, especially making purchases while driving or using ride-hailing apps, they will have to give up at least some privacy, GM vice president of strategy Mike Abelson said.

  He said the company is not currently selling data to third parties.

  “We’re not considering that,” he said, but added: “I wouldn’t want to make a statement for forever.”
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