Connected Car Business Models:

Advertising?NAVX - Bucharest

May 22, 2014 !

Ludovic Privat

1

Business models• Services paid by the driver

• Services paid by the car maker (bundled)

• Services paid by creating additional value

• Usage-based insurance

• Probes & Big data analytics (auto parts, map, traffic, etc…)

• CCRM - Car & Customer relationship management

• Advertising?

2

Advertising & the connected car

3

3 Ad formats

• Display

• Search

• Audio

4

Display

• Early experimentations: 2008 Garmin - NAVTEQ

• via RDS TMC channel

5

NavfreeBanner

Push Notification

Idle time (route calc.)

Splash screen

6

TeleNav

• Expandable banner

7

Waze

• Branded POI+ click

• pop up banner ad during stop time

8

Navfree Rev Estimates• End of 2012: 11.2 million users, 21% monthly users

= 52.3 Mio impressions/month (CTR de 1.7%)

• Today: 18 Mio users

• 84 Mio Imp/month estimated

• iAd eCPM estimated at $1.5.

• Annual rev = $1.5 Mio = $0.08 per user/year

9

Waze Ad Rev Estimates• 2012 - 36 Mio users - 9.6 Bio km/year

• May 2014 - assuming 100 Mio users (=27 Bio/y)

• average commute US : 16 Miles (25km). assuming 1 ad/10km.

• Waze ad price $1.00 - $2 CPM

• 2.7 Bio impressions/year = $2.7 to $5.4 Mio revenue/year.

10

Local Search

11

TeleNav

• sponsored results integrated in local search

• 2010: 40 Mio Mobile searches/month

12

Yellow Pages: Mappy

• Yellow Pages business model: premium visibility of local merchants through local search in the app for a fixed annual fee.

• Revenue estimated to a few Mio €/year

• Business model currently replicated with Eniro (Nordics) and Seat Pagine Gialle (Italia)

13

Learnings from Display & Search

• Banner ads not very adapted to the car environment (distraction) !

• Mobile CPM price is low = low revenue !

• Search works best with a Yellow Pages business model based on local merchant subscription.

14

Radio advertising

• Radio ads start in the 1920’.

• In 1923 in France Citroën launch a radio for credit auto purchase.

• Mass production of auto-radio starts in the 1920’ in the US.

• Blaupunkt launch “Auto Super AS5“ in Germany in 1932.

15

Audio ads in Car• Non disruptive

• Full Driver attention

• Possible call to immediate action = drive

• Context: Location, speed, etc…

• Metrics, ROI

16

Pandora in-car• Jan 2014: 4 million

users had activated Pandora in-car version

• In-car radio ad deals with BP, Ford, State Farm and Taco Bell

17

Aha Radio• Nov 2013.

• Audio ad associated with on screen brand logo and nearest address.

• 1 clic to send coupon to email address. 1 click to drive.

• Partners: Placecast & AdsWhiz

18

biz model: streaming Audio

• Publicités audio In-stream advertising (15/30 sec)

• Price: $12 to $16 CPM 30 sec geotargeted

19

How does it scale?

20

Programmatic & Real-Time Bidding (RTB)

New age of digital advertising

21

Definitions• Programmatic: “The practice of automating the selling

and the buying of online ads by using algorithms to drive the best price possible for each impression.“

• RTB (Real Time Bidding): “The dynamic process of buying and selling impressions instantaneously and in a live auction. The auction determines a winning bidder who then has the right to place an ad message into the available ad position using audience attributes as signals to determine the best ad message in that moment.“

22

How RTB works?

23

Programmatic & Radio

24

Native Ads

• “Advertising that appears as a part of the content or is highly contextual. It was often used to refer to sponsored content, but increasingly is being used to describe advertising that appears on platforms like Facebook and Twitter that is placed based on user data and must be specifically created for those platforms.“

25

voice recognition

• Nuance technology

• Dialogue with the ad

26

Thank You ! !

Ludovic Privat @gpsbusinessnews

27