Automakers on the Road to Monetizing Data

Charlotte

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19th March 2015

Data, data everywhere and not a bit or byte of use: could this be the modern day equivalent of the Ancient Mariner’s plight? If only, as he stared out at the vast oceans of water before him, he’d had the tools to build a desalination plant.

In today’s increasingly hyper-connected world, it is this challenge (to transform something abundant and useless into something pure and life sustaining) that major companies operating within the automotive sector are rising up to meet. 

For big data to be of any real use–for it to have B2B or B2C value–it needs to be clean, totally relevant and securely stored. With a major evolutionary shift in the automotive industry underway–that of car-connectivity, the Internet of Things and predictive analytics–utilizing mammoth streams of digitized information to positively impact our engagement with the physical world is what some have termed level 2 of Big Data. 

And it’s this area upon which Simon Hania, vice president of TomTom’s Privacy and Security, has set his sights. Because, as he points out, vast amounts of good, clean data for complex algorithms to make sense of are what will one day make the autonomous driving experience, and the Internet of Things, as commonplace as sending texts on cell phones. 

“Data quality is a key element in here,” says Hania, “and so one of the things we’re doing right now is improving the mapmaking process. Until now, a new map based on government data, verified information from our mobile mapping vans, satellite images and user traces was released about once every three months. But now we’ve completely revamped our technology, which has major implications for the car industry because it will enable us to churn out an entirely fresh map every day. 

“It’s an important step because around half of our roads change every year, so if you want highly automated or even autonomous driving to become a reality, you need very recent data. Currently, people think that the maps they get on their smartphones are real-time but the data can be up to six-months old. Within the next two years, we’re going to have fresh maps daily, and real-time delivery.”

Using a computer engine that fires off around 3,500 rules on every proposed map change, a highly automated process with feedback loops implemented to increase data input, Hania believes TomTom has mastered the challenge of dramatically reducing cycle times while still maintaining the highest level of data quality and integrity.

“We're talking near real-time Big Data churning,” he says. “Petabytes of information. We already collect data from cars signaling road changes, and use verified crowdsourced data, but once the system starts being fed with much shorter time cycles, we’ll have more relevant data that will be very clean and up-to-date.”

The fact that autonomous capabilities already exist and are being road tested in global pilot projects, such as Volvo’s in Sweden, makes the map facilitation process Hania speaks of more relevant. And the European Commission’s cooperative intelligent transport systems enabling cars transmitting data on radio waves to communicate with one another will soon allow vehicles on the road to build up highly individualized maps providing views of other connected cars nearby. 

“Being able to see where other cars are headed, where they are in relation to your own car, and what speed they’re doing has huge implications for driver safety and convenience,” says Hania. “This is in the area of highly autonomous, and potentially fully autonomous, driving.” 

He adds: “It requires a high density of data and a higher accuracy of maps and mapmaking to allow cars to communicate among themselves on the Internet of Things. For instance a car will be able to determine whether there's another car around the corner, or in a blind spot, so although the driver can't see the danger, the car can.” 

TomTom appears to have a bead on how to collect, validate, and analyze real-time information from growing data points and then generate revenue through anonymized data that meets current EU privacy rules. But what’s the potential for marketing firms, who are far more reliant on personalized data, keen to cash in on this shifting in-car paradigm?

David Holecek, director of connected products and services for Volvo Cars says: “We see contextual data as a fantastic way to enhance both the in-and-out-of-car experience for the customer. While the market for personalized marketing isn’t really mature yet, we do see the long-term potential of delivering relevant commercial information, which in itself could be less annoying than normal generic marketing”. 

Fast-forward a few years and its conceivable, then, that every advertisement heard in-car will be targeted according to some sort of perfectly tailored ‘algorithmic fingerprint’ of taste. GM's new AtYourService program is already beginning to make moves into the space through partnerships, with tailored advertising based on detailed individual data. 

This feature of OnStar will deliver information and ads based on geographic location and input destinations that in the contextualized environment would be far less aggravating than the scattergun approach of traditional radio commercials.

Imagine hearing a Dunkin’ Donuts discount deal just a few moments before you take a right and see the nearest the outlet. With advertising agencies eager to reduce waste and give clients a better ROI, it’s inevitable that, provided there is no element of in car distraction impeding driver safety, location-based promotions will be a major growth area in the next few years. 

In addition to the Dunkin’ Doughnuts deal, GM has announced further partnerships with Parkopedia for parking information, Audiobooks for tales on the go as well as an initiative to help with hotel bookings, again through OnStar. GM says the service will “grow over time with new capabilities and more partnerships.”

Naturally, this sort of contextualized experience will rely on companies holding large amounts of personalized driver data, as the anonymization of data model simply won’t work in the way it has for mapping services. So, what obstacles might advertising firms come across, and are there likely to be litigation cases in the future in the event that personal privacy gets breached?

New York litigation partner and data ownership and privacy expert, Gail Gottehrer, says: “So far there hasn’t been a significant case against a data provider in the automotive industry in relation to this, but there’s so much focus now on just about any data breach that leads to litigation–such as the Home Depot, Michaels, Sony and, more recently, the Anthem cases–that there’s always a risk, when so much data is being held, that litigation could happen.” 

She adds: “I have clients with large marketing databases who, since these recent high profile data hacking cases have happened, have become much more concerned about the data they hold and they’re starting to look more closely at that data to decide whether or not it has any inherent business value. If it doesn’t, it’s an unnecessary liability.”

Gottehrer also says companies with extensive data in the automotive business should consider what she calls the ‘prevention is better than cure’ approach. That is, to disclose to consumers what data is collected, the purposes it’s collected for, and tell them how the information will be stored. 

Additionally, the data privacy attorney says companies should be ready to answer questions about whom the data is shared with and what other firms will do with the information once they have it.

Other questions will pop us as well, Gottehrer says, such as, “Is the data anonymized? If so, how easy or difficult would it be for hackers to deanonymize it? I think the more that’s made clear at the beginning of the data collection process, the less likely it is that there will be problems further down the line.”

But the fact remains that people are becoming irreversibly dependent on technology and more interconnected through smarter devices; the autonomous, connected car, will soon be one of the major players. In order for this developing societal paradigm to smoothly function there is expected be a trade off, which is, simply put: data in exchange for safety and convenience. 

Over time, computers, including advanced telematics, will be able to recognize cycles of behavior, detect biorhythms, recognize increasingly complex patterns and make useful inferences to better individualize and contextualize human experience. Being able to take uncertainty and spin it into usable probabilities in the car and beyond it is, perhaps, a welcome thought. But computers don’t operate within a void; they need data, the right kind and lots of it in order to become truly effective.

Klas Bendrik, group CIO & vice president at Volvo Car Corp., tells TU Automotive: “It’s an ongoing journey and we are only at the starting point. These developments are about embracing change and a having a strategic direction for the future.”

For more on connected car data take a look at TU-Automotive Detroit 2015 (June 3-4). Sessions include Connected Car Data: The hottest commodity in the world's hottest tech. industry – are you feeling its full power?