High tech drives market

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Technology has crept into every corner of consumers' lives. And as such, it has grown as a selling point for carmakers.

Auto marketers, eager to boost the bottom line, are looking to high-tech communications, safety and information services as a new source of revenue that's also adding excitement to the category.

General Motors Corp.'s OnStar system is one of the most widely recognized in the telematics segment-an area that combines satellite-based Global Positioning System and wireless cellular technologies to deliver vehicle communications and assistance services.


GM began advertising OnStar in 1996 via Ammirati Puris Lintas, New York. At first, GM used Cadillac models to promote the high-tech system. The OnStar unit began dedicated advertising efforts in late 1997. "We didn't call it telematics at that time," says Andy Young, OnStar advertising manager. "We crafted messages with a fear-based approach ... the messages struck a nice chord with consumers, but it wasn't expandable."

The safety- and security-laden "what if" ad messages for OnStar eventually segued into promoting adviser services and Internet-based services offered today via the Virtual Advisor enhancement, a hands-free, voice-activated system that lets drivers make phone calls and access e-mail, stock quotes, news and other information at the touch of a button or voice.


The key difference is a "live adviser who could talk to you, knew who you were, where you were," Mr. Young says. "OnStar is like a guardian angel."

The executive adds that Interpublic Group of Cos.' Campbell-Ewald, Warren, Mich., which currently handles OnStar, carried this theme into its "Storytellers" campaign by basing the ads on stories that OnStar subscribers told about their experiences with the system.

Today, OnStar's ad hero is DC Comics' Batman, who, through his invincible image and high-tech Batmobile, has widespread appeal and credibility with consumers.

The Batman TV spots have talked about safety and security features, air bag deployment notification, GPS, live OnStar advisers and the unlock-door function. New print ads, set for May, will promote Virtual Advisor, personal calling features and Web-based information services.

With nearly 1 million subscribers, OnStar and related premium add-ons like route guidance, navigation and concierge services could help keep the auto category interesting, safe and most importantly, profitable, say analysts. And GM isn't the only carmaker going down that road.

Toyota Motor Sales USA's Lexus began offering Lexus Link in Oct-ober with its LS 430 flagship sedan.

The system is capable of tracking stolen vehicles, notifies a Lexus center of a sudden loss of battery power and airbag failures, and offers premiums like concierge services and routing guidance. A built-in system allows drivers to record memos, then play them back later.

"Right now we're focused on safety and security because it's most meaningful to consumers," says Mark Simmons, Lexus' national manager of brand management and strategy.

In the future, the brand will offer more real-time information services, news and stock quotes, says Eddie Ide, technical projects manager at Lexus. But, he notes, to offer these and other services, wireless technology must connect activities inside the car to networks outside the car.


The fact that digital wireless networks have only about 30% coverage in the U.S. and that there are five different wireless tech- nology standards has hampered the speed with which services can be deployed, Mr. Ide says.

Mr. Simmons says that "even the most early-adopter people aren't looking at this as a reason to select a car."

Yet safety and security features of telematics' systems are increasing car buyers' interest.

The TeleAid system offered by DaimlerChrysler's Mercedes-Benz USA makes it easy for consumers to get help.

The system has three buttons-the red SOS button links drivers to a dispatch center that knows exactly where the car is; a wrench button alerts the system if the driver is out of gas, has a flat tire or requires roadside assistance; and an information button answers questions about vehicle operation and offers basic directions to specific locations.

Mercedes introduced the system in its S-Class cars in 1999, and it's now offered in all models. The first year of TeleAid is free and includes 30 minutes of cellular airtime; after that, it's $200 a year.


A dedicated navigation system is standard in Mercedes' S-Class cars, the CL500 and CL600, and is an option in E- and C-Class cars. Ken Enders, VP-marketing at Mercedes-Benz USA, sees future similar systems using communications services between cars and desktops, like having a private portal.

Mercedes advertises TeleAid using print and TV advertising created by Omnicom Group's Merkley Newman Harty, New York, as well as on its Web site (mercedes.com) and through dealers. Despite its advanced technology, Mercedes tries to link the service to useful scenarios such as using it to extract keys locked in the car.

"Technology for the sake of technology is easy," Mr. Enders says, "To take technology and build it into a car in a way that you can actually build value and usefulness into it is the harder part."

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