Connected cars may give automakers the key to advertising dollars

connected-car

The automotive industry is undergoing its biggest transformation since the 1908 Model T, the car that opened up travel to the middle-classes of America. But unlike in 1908, it isn’t about the price or production of a car, but how connectivity and automation will change the business model for manufacturers and the experience for consumers.

Autonomous vehicles are still at least a decade away from public launch, says Ford’s head of research Ken Washington, but the connected car should be reaching nearly 380 million consumers in less than five years.

There has been a significant rise in the sales of connected cars from 2015 to 2017 from eight million to 30 million, according to a Business Insider report. It estimates nearly 100 million connected cars will be sold by 2021.

The proliferation of this technology presents new opportunities for automakers, which have been relegated to selling the car and not much else. The connected car provides manufacturers with a way to sell software updates, infotainment services, and use the data collected for advertisements, similar to Google or Facebook’s business model.

Delphi, one of the largest automotive suppliers in the world, has already caught onto this trend. In 2015, it acquired a data analytics startup called Control-Tec for an undisclosed amount and Movimento in early 2017, a startup that works on providing over-the-air updates to cars.

Both acquisitions are clear signs that Delphi wants a piece of the connected car future, even if it is just supplying automakers with the capabilities to utilize this technology.

New revenue models

The hope, for automakers, is the connected car provides two revenue models, similar to Apple’s iPhones. The car is sold to the customer and then data is taken from what the driver listens to, where they live, where they work, how long they commute, which is then sold either as an advertising profile or to ad-networks.

It may be hard for the automaker to sell both however, as is the case with Apple’s decision to bundle software and update products for free. Consumers may also push back against having more of their personal information sold to the highest bidder.

In the U.S., consumer advocacy groups have called on automakers to ensure that private data will not be sold to advertising agencies. The European Union is also looking at legislation that would prevent the car becoming another product for advertising, as the computer and smartphone have become.

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ReadWrite

How automakers are transforming their operations through predictive analytics

Imagine driving a new car down the highway. You’re enjoying the open road when a notification appears on the dashboard informing you that you should deviate from your usual route because there is a major backup. You select the alternate route suggested by the car and continue on your merry way, having saved at least an hour of travel time.

Several minutes later you receive another notification letting you know that if your brake pads are not changed within the next week, your brake rotors will begin assessing damage. You summon your car’s artificial intelligence assistant and request that they pencil a brake inspection into next week’s schedule. It informs you that the note has been made, saving you from hefty repair costs. As you approach the exit nearest your home, your car’s dashboard blinks a notification that the cars in front of you are slowing down rapidly. Rather than squinting and scanning for brake lights ahead of you, you begin slowing down and comfortably come to a stop several feet behind the car in front of you at the stoplight.

By imagining the scenario above, you are imagining a world in which cars are fuelled by predictive analytics, not just gasoline. As the role of predictive data analytics becomes more pronounced in the auto industry, so will features that draw upon the technology to create a better experience for both drivers and manufacturers. Consider how predictive analytics is already shaping the automotive industry what it could mean for the future of cars.

Connectivity

At the root of much of the pending technological progress of the auto industry is the fact that many new cars connect to the Internet. This allows for signals used for navigation, music streaming and even connectable Wi-Fi, to be transmitted through the car. Perhaps even more useful is the way some auto manufacturers have used data to capitalize on connected cars. Tesla, for example, uses car connectivity to not only track a car’s location and local driving conditions, but also to use a predictive data analysis program to help improve the car’s autopilot feature. This software combines the insights generated by thousands of individual Tesla cars to improve the precision and safety of the autopilot feature in Tesla cars collectively.

Data management and security

Research suggests that 75% of cars on the road will be connected by 2020. Think about it. Hundreds of millions of cars will be connected to the internet. They will be generating massive amounts of data daily – 25 gigabytes per hour according to some analysts. This means two things the data will need to be managed and protected. In order to manage such an incredible amount of data, automakers will not only need to utilize advanced storage mediums such as cloud and all flash storage, they will need to use rely on predictive data analytics to effectively manage the data. The same technology will also be useful in detecting and thwarting cyber-attacks on connected cars. Since predictive analysis technology excels at identifying patterns, this tool will be used to monitor the behavior of authorized users with the connected car interfaces. As a means of preventing hackers from entering a car’s network to steal data or even take control of the vehicle, predictive data software will identify and flag any unusual behavior so that it can be investigated and addressed.

Predictive maintenance

Think of all the money car owners would save if they could negate the need for costly repairs through calculated maintenance procedures. When I say calculated, I mean through predictive analysis. By correlating data gathered from integrated sensors with the data from warranty repairs, car makers will be able to use this technology to predict major repairs before they are needed. The same strength used to identify patterns will draw upon data from thousands of cars to explain an anomaly in performance. This could not only prevent costly repairs for customers, but also costly recalls for manufacturers.

Predictive collision avoidance

Integrated sensors will not only be good for predicting maintenance – they will be helpful for predicting (and preventing) accidents as well. By monitoring the activity of surrounding cars and processing the data through predictive analytics, it is expected that data-driven cars will eventually be able to predict traffic accidents, ideally making them a thing of the past. Car companies have already begun exploring the possibilities. One of the most prominent examples of this application of the technology is Nissan’s predictive forward collision warning feature, which assesses the speed and distance of the cars in front and behind the vehicle in question. Drivers are warned and seatbelts are momentarily locked when either car drives in such a way that requires the vehicle in question to brake sharply.

Read more: Connected car shipments will hit 70 million by 2022, says Frost & Sullivan

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