As it makes over motor travel, mobile’s redefining of one of the oldest and most personal aspects of driving – the car radio experience – may be raising more questions than it answers about the prospects for automobile marketers.
From satellite radio services such as Sirius XM to Internet Protocol-based Tunein Radio, connected, mostly smartphone-based car-radio experiences give automakers fresh opportunities to brand and customize the radio experience in the car. But as car radio continues to evolve, services are seen shifting away from the current app-oriented approach which shows buttons on the screen and more toward a new, fused experience.
“The implications of an auto company branded radio are clear – the car company will be in the advertising business,” said Roger Lanctot, associate director of global automotive practice for research and consulting firm Strategy Analytics Inc. in Newton, MA.
“The question before the auto industry is whether the car companies want to be in this business or whether they will leave it to partners – Apple, Google, Amazon, Facebook, broadcasters like Clear Channel or CBS or wireless carriers,” he said.
As mobile’s redefining of car travel is still in its nascent stages, it is difficult to speculate on the implications of these trends for marketers.
Geoff Snyder, vice president of automotive business development for Pandora Internet Radio, the music-streaming and automated music recommendation service that can be used in the car with a smartphone or via an integration in some cars, said he expects mobile to continue to play a large long-term role in the in-car listening experience in tandem with traditional channels such as FM radio.
Although the auto partnerships Pandora has forged with reflect manufacturers’ intention to provide consumers with access to services like Pandora in their vehicles, Mr. Snyder said he doubts traditional FM listening will see dramatc near-term declines. “It will take time for availability of the technology to reach true ubiquity across all vehicles on the road,” the executive said.
The key issue in shaping the future of car radio will be making content access as straightforward as possible, Mr. Snyder said. “Our objective is to make access to Pandora in the car as simple as it is for FM radio,” he said. “That is, one-button access to the service and the resumption of playback on your last Pandora station across ignition cycles.”
Consumers in charge
Even as the new connected car radio allows drivers to own the content consumption experience, applications have a limited future, according to Mr. Snyder.
“It’s important and maybe somewhat obvious to note that not all apps are relevant for the in-car experience,” he said. “Consumer research has shown that people recognize the relative priority of different apps and services.”
The ability to deliver a seamless music listening experience is critical, he said.
Mr. Lanctot said American Honda Motor’s announcement last week that it would invest millions of dollars in a YouTube video and live concert channel to attract younger buyers (see story) is an example of how car makers should take over the content management proposition in the car and create their own integrated, branded radio experiences.
With the YouTube music project as the linchpin, Honda could combine available services into a single Honda-branded solution that could offer a complete package of news, radio, sports, weather, traffic and music along with a channel for communicating important Honda-related news such as new vehicles, new financing, new service options, new apps or even urgent vehicle recall messages, he said.
The problem, he said, is that automakers’ marketing departments and engineers generally operate independently and with differing objectives and do not coordinate activities very effectively. And marketers also often fail to grasp the privacy concerns of drivers relative to the priorities of Web site visitors, he said.
Automakers also fear losing any competitive edge. For example, while Honda seeks to create and control an in-car Honda-branded radio experience using Google’s YouTube, Honda would not want Google tapping into its customers’ in-vehicle content and advertising consumption and exposure, Mr. Lanctot said.
Honda representatives declined to comment on Mr. Lanctot’s claims.
General Motors Co recently added Pandora Internet radio to most of its vehicles with touchscreen interfaces, as well as Stitcher and TuneIn integration on some vehicles.
More changes in store
Signaling that a fused experience is under way, Amazon late last year said it formed a partnership with the BMW group to bring the Amazon Cloud Player for iOS access to BMW and Mini cars.
The move allows customers with iPhones or iPod touch devices to link their Amazon Cloud Player for iOS applications to BMW Apps and Mini Connected-equipped vehicles from model year 2011 forward. The cloud player shows the phone’s functions and music playlists on a dashboard screen within eye view.
Amazon previously announced a similar deal that adds integration with its Cloud Player in Ford Motor Co.’s SYNC Applink-enabled vehicles.
It is not clear how government regulation over concerns about distracted driving could affect the evolution of car radio.
The US Department of Transportation’s National Highway Safety Administration has issued a list of suggestions designed to curb driver distractions.
For now, a mobile makeover that has given motorists confidence to know where they’re going and the fastest way to get there, is bringing embedded connectivity in vehicles that will open the doors for a number of new players to enter the automotive scene.
“This won't just be limited to platform players, systems integrators and the like,” said Ryan Martin, associate analyst with Boston-based Yankee Group. “Content providers and marketers have just as much to gain.”
“This is especially true when we also consider the ability to layer additional services and deliver contextually-relevant messages in real-time,” he said. “A highly personalized experience will be at the core.”
Michael Barris is staff reporter with Mobile Marketer, New York.
Michael Barris is staff reporter on Mobile Marketer and Mobile Commerce Daily, New York.