Why Ford Could Be the Next Media Company
The biggest news from the Consumer Electronics Show seems to be the rise of the automobile from a stereo on wheels to a ubiquitous entertainment productivity machine.
There are as many as 380 in-vehicle electronics exhibitors showing off their products, and the opening morning keynote was not delivered with Bill Gates, Steve Jobs or some other distinguished Silicon Valley technophile, but by Ford CEO Alan Mulally in his red sweater vest, who introduced an updated version of the in-dash, in-car technology game changer, Ford Sync.
The 2010 edition of Sync comes with a number of useful extensions, including the ability to keep up with Twitter, stream internet radio and download turn-by-turn web maps at no cost. It takes a page from companies such as Facebook and Apple by supporting third-party applications. That means you could soon be controlling many of the handy applications you use on your iPhone via the voice recognition on your car's console.
Sync has been so successful that Ford attributes it to the company's turnaround. The Los Angeles Times reported that Sync-enabled vehicles sell twice as fast as non-Sync-enabled ones.
Other car manufacturers have observed the success Ford has had in pushing consumer electronics and have begun a rollout of their own. General Motors Corp.'s extended-battery vehicle, the Chevy Volt, will give customers the option of controlling various car settings via their smartphones.
Consider the signs this traditionally hardware-driven industry is starting to think in terms of software and interactive experiences: Chrysler has announced WiFi-enabled vehicles; GM has hired former Microsoft Chief Financial Officer Chris Liddell and was rumored to be speaking with Apple's Chief Operating Officer Tim Cook for the CEO position. Cars aren't cars anymore, they're productivity hubs with entertainment extensions on four wheels.
And why shouldn't they be? We spend an inordinate amount of time in our vehicles. By today's standards, some experts believe that number exceeds three hours per day. So as provoking as a thought this may be, is it difficult to imagine a time when the auto manufacturers subsidize in-vehicle technology through advertising? What brand wouldn't want to be pervasively integrated into a vehicle's GPS unit?
Even today, is it really not feasible to think that GM's OnStar service couldn't provide pay-per-click (or even pay-per-visit) smart results based on customer inquiries? Think about the following scenario:
Driver: Hi, I'm looking for the closest gas station.
OnStar: You are 0.5 miles away from a Shell but 0.6 miles from a BP, where you can use a discount code to save 15%.
A day will come when the Big Three will need to decide how far they want to take this and whether they want to turn into media and advertising companies. I assure you, as someone who worked on their business, those debates have been actively taking place among their agencies for years. The allure of monetizing their online sites through sponsorship/advertising opportunities has been tempting, yet no backlash could potentially be greater than the nightmare scenario of opening the floodgates to invasive advertising in vehicles themselves. How far the car companies take it will directly correlate to the success of such a venture.
Regardless, as a marketer, knowing that cars today are rolling off assembly lines with wireless access, location-based services, and iPhone-application plug-ins, it seems like the opportunities that reside for marketers are becoming closer every day.
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