Will Connected Cars Become the Next Local Search Battleground?

Cars are becoming mobile hotspots. Most automakers this year or next will offer some form of connectivity in their vehicles. GM is the category leader, with nearly 30 car models in 2015 that can become 4G hotspots with an OnStar subscription.

On the one hand people already have smartphones that they use in cars (often dangerously). But the idea of being able to simultaneously connect up to 7 devices, in GM’s case, will be appealing to many professionals and families with kids. It will also promote a lot more internet use in the car — and less radio listening I would imagine.

As an aside, drive-time radio has mostly been insulated from internet disruption. But in-car connectivity will put major pressure on terrestrial (and satellite) radio. Of course not everyone will buy these services; GM’s starts at $20 per month or $140 per year. To some that will be an annoying expense they won’t want to pay.

But many will pay. For them the car and screen in the dash become a new place to access content, entertainment, search and discovery tools. Reciprocally it becomes a new channel for publishers and advertisers. Someone looking for Indian restaurants will be very open to deals, and so on. But the optimal user experience is still undefined, although the touch-screen in-dash “tablet” is the prevailing model.

Yesterday at CES in Las Vegas, GM announced a range of new OnStar 4G LTE services. Among them was “AtYourService.” This appears to be a concierge-style service consistent with OnStar’s 411-style legacy, with a mobile device tie-in. It offers a range of promotional opportunities in the form of content:

AtYourService will roll out in the U.S. and Canada . . .  OnStar has signed initial relationships with partners like Dunkin’ Donuts and Priceline.com. Digital coupon providers RetailMeNot and Entertainment Book will supply retail and shopping coupons. Parkopedia will serve data for parking nationwide, and Audiobooks.com will supply e-book content to drivers on the road. When a driver requests directions to a point of interest that has an applicable deal or connection to one of its partners, the OnStar advisor can send the special offer from that merchant.

Also beginning in early 2015, active subscribers with the full-service plan will be able to book a hotel through an OnStar advisor. Partnering with Priceline.com, OnStar advisors can provide information on availability, cost, amenities, and ratings, then book a hotel reservation and send directions to the vehicle.

Subscribers can give advisors the general location where they would like to stay and advisors can select from Priceline’s participating hotels in that area. After booking a hotel, customers receive an email confirmation of their reservation. The service provides a simple way to find on-the-go accommodations while drivers keep their eyes on the road and hands on the wheel.

I can’t speak to the user experience yet but the success of OnStar and other similar services as a promotional channel for third party publishers and marketers will depend on how easy and effective they are. Regardless, people will still pay the fee for WiFi access.

Previously people might not renew OnStar after the first year because it wasn’t deemed “essential,” especially given smartphones. However the hotspot connectivity changes all that. You want the service to get the connection; the rest may or may not be compelling. We’ll see.

Competition will cause most OEMs to offer WiFi in most of their cars for model year 2016.

Most of the search or lookup activity through the in-car systems will be local — probably even more than on the smartphone. On smartphones there’s a planning and “killing time” behavior that occurs. In the car people will almost always be looking for something immediate or in the near term (e.g., along the commute, at the destination).

The obvious ad models are search and geo-fenced contextually relevant display. One could imagine that driving behavior might equally be captured and factored into overall location history and profiling, which is being done anonymously with smartphones today. Indeed, this will likely create a new category of privacy concerns: will my driving be trackable all the time?

As with smartphones and location, there will probably also be privacy controls that emerge. That will have to be worked out.

We can probably expect that a in-car search experience will become a phenomenon independent of smartphones. But more generally we can expect that there will be a lot more internet access and activity in the car over the next several years, with and without mobile devices.

So to answer my own question: yes I do think that connected cars will become a major new driver of local search activity — so to speak.

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