Telematics Munich 2014: Day Two

The afternoon session of the second day of the Telematics Munich 2014 conference was devoted to three important aspects of car telematics: traffic and navigation; insurance and fleet; and data, analytics and services. Of the three, the most contentious—and therefore most fascinating—was no doubt the debate about data.

Arguably, Big Data is the segment of the automotive ecosystem that frightens players in the space the most, as much for the potential abuses it can lead to as for the disruptions it will provoke. Yet, as the debate rages on—about whether to leverage it, how to leverage it and whose property it is—more and more connected cars and devices are generating more and more data that are being increasingly exploited to benefit vehicle and driver, increase brand loyalty and reduce costs.

But the potential for abuse remains, and perhaps it always will. Nevertheless, Big Data will not go away. On the contrary, it will continue to get Bigger. The wide range of the discussions that took place on the afternoon of Day Two of Telematics Munich 2014 and the diversity of opinions expressed in them testified to the fact that until OEMs, Tier 1s and other players in the automotive space can understand what they are dealing with, Big Data will remain a  source of debate.

Alibaba's Data Lesson

Before the discussions on data began, a large part of the more than 1,100 participants received a lesson in how to leverage data from the Chinese e-commerce giant Alibaba.

Peter Zhou, vice president of AutoNavi, which was recently purchased by Alibaba, explained that this day, Tuesday, November11, was special for the company and for Chinese e-commerce shoppers.

“On November 11, 2009, Alibaba decided to create a festival for Chinese online shoppers to buy things, Singles' Day [because of the date, 11.11],” he said. “It is an important day for Chinese shoppers and online shoppers. They buy many things.”

Zhou presented figures to illustrate how successful this marketing strategy has been for the company, showing its astonishing growth, in gross merchandise value (GMV), over just five years. On the inaugural Singles' Day, in 2009, Alibaba took in RMB 500 million, currently $81.6 million; in 2013 that figure had grown seven-fold, to RMB 36 billion ($5.87 billion), in GMV. According to Alibaba's @Alizila Twitter account, Tuesday's Singles' Day produced yet another record, with the company earning more than RMB 57.1 billion, or $9.3 billion.

But Alibaba did not become one of the world's biggest online retailers simply by using marketing stunts. Trying to convince marketing and salespeople in the hall to use Alibaba's online shopping services, such as Taobao Marketplace and T-Mall, to sell their cars, Zhou explained how Alibaba leverages its research data to increase sales. The example he gave concerned the car-purchasing behavior of a family that has just had a child.

“In the first six months after the birth of the child, there is no buying behavior; there is no time to do that,” he explained. “But nine months after the birth, they may buy a vehicle.”

How does Alibaba know when this family had the blessed event? Simple. They know it from the sudden purchases of such necessary child-care products as diapers and baby formula.

“So they begin to target customers with offers nine months after the birth of their child,” he said. “You know what kind of buyer he is [from the data] and you can target him appropriately.”

This example neatly illustrated a maxim articulated in an afternoon panel discussion on Big Data by Robert Valton, manager, Business Insight Big Data, at WirelessCar: “Push data into insight. Push data into knowledge. Then take action.”

Is More Data Better Data?

The panel Valton participated in began by discussing the question of whether the large and increasing amount of data being generated was an opportunity or a challenge.

“It's not a question of how much data, but how good the data is,” Valton said. “What it comes down to is to get more insights and give the customers value.”

Another panelist, George Ayres, vice president of Global Automotive Solutions at Verizon, said that there was probably too much data being extracted—and he pointed a finger at his own company.

“We probably gather more data than they can use,” he said. “Insurance companies use about 8 data points, but we send them 60.”

He called for the use of “contextualized data, not just weather and traffic, but how to bring it all together and give the drivers something better.”

The vast amounts of unused data is currently not a problem, but it may become one in the future when far more data will be generated and used for the vast Internet of Things.

At another afternoon panel, moderator Niranjan Thiyagarajan, senior consultant, Automotive and Transport, at Frost & Sullivan, raised a question regarding the use of Big Data for customized mobility solutions. 

David Green, marketing development director at Volvo, said, “Big Data is already improving mobility. We spend a lot of money on a car and don't use it very much. The key to mobility is that the car has to be there when you need it.”

Jörg Lützner, head of Services and Commercial Vehicles, Interior Electronic Solutions at Continental Automotive, used the question to come up with a definition of what Big Data is. “Are personal mobility services Big Data? No. They are a niche of Big Data. Big Data is getting out sensor data about what are a vehicle's and the user's requirements and needs.”

In an informal conversation, Thiyagarajan said that personal mobility will almost certainly become synonymous with Big Data some 15 or 20 years down the road when some three-quarters of the world's population will be living in huge urban agglomerations, or mega-cities, and data will have to be used efficiently to facilitate the movement of people in, through and out of them.

“There will eventually be a need to filter the available data, to extract only what is useful,” he said. “Hopefully, the technology will be developed to a point where it knows what data should be extracted for the service and what data should be ignored. It will be 'smart' because the people creating and managing it have become smart about data. Currently, because there is no business model, so people see all data as having a potential business case and so much more data is being produced than is used.”

He went on to say, “Now we talk about dumb people using smart phones. I hope that won't be the case with data.”

Getting Creative with Data

As Thiyagarajan suggested, one reason so much extraneous data is being gathered is that no one has figured out a business model for that data. What is needed, perhaps, is a bit of creativity to develop new ideas that could be turned into profitable and forward-looking business cases.

WirelessCar's Valton suggested the use of data scientists to discover new and unforeseen uses for the data. “In the future, with data scientists you can address questions about data, the known questions, but also the unknown questions, the questions you don't know you have.”

He said when these scientists started working with his company they were somewhat timid, but eventually they became confident and came up with excellent ideas.

Jörg Lützner of Continental Automotive said his company was taking a different, and somewhat more offbeat, approach to the problem of generating new ideas for the use of data.

“We got a group of students together to come up with crazy ideas about new apps and Big Data,” he recounted. He said that, among other ideas, which he refused to divulge, the students came up with suggestions for geolocation tagging and gamification, where people were led to parties, for example, through on-the-street challenges.

However, often creativity comes about when an individual looks at an existing service or function and is able to see out of the box. Jonas Wilhelmsson, global sales director of Sales Enablement at Ericsson described a fascinating example from the Swedish capital Stockholm, where data used to track the location of taxis was eventually transformed into a guide to the city's most popular entertainment events.

“Now, if you go to Stockholm, you can actually track what the people of Stockholm are doing just by following the heat map,” he explained. “You can see from that what's currently hot.”

He added that this was just one example of creative ideas that will eventually come to the market, where data is used “either for fun, for the public good or for companies to make money.”

To Share or not to Share

One issue has plagued the use of data from virtually the moment it became clear that connected cars would be generating a lot of personal information is who owns this data and whether to share it with other parties.

Pradeep Suchdeo, solutions director at Oracle, had a clear-cut answer to the data ownership issue. “It's the customers' information and it belongs to them, unless they're explicitly giving it up,” he said. “Jaguar Land Rover have an explicit opt-in saying 'I want to give up my data'.

In an earlier Day Two presentation, Ralf Lamberti, director of Telematics, Infotainment and Cabin E/E, at Daimler, presented an alternative strategy in introducing his company's new Mercedes Me service.

“The customer can always opt out online and give up a specific service if he doesn't want to share the data.”

Providing a service that gives value to the customer and allowing him or her to decide if this service is relevant enough to them, appears to be the key to getting car owners to share their data.

“The car OEMs and the car owners both think they own the data,” said Emil Dautovic, business development manager, European Automotive Market, at QNX. “Maybe if the car owner gets something back, he will give up the data.”

Andrea Sroczynski, head of Global Automotive at Telenor, agreed. “Seventy percent of consumers are open to giving up their data if they're getting something for it. It's the customer who decides. But as there is more and more data, it's getting more and more scary. It's sort of a devil we've already invited into the room.”

Ericsson's Wilhelmsson maintained that the debate about data-sharing was almost moot. “If you're using existing services, such as Facebook or Google, maybe you don't think much of giving up the data,” he said. “My wife got upset that her Gmail account was for Google to have access to data. So much of this is already going on, but it's still a potentially explosive issue.”

Sroczynski sugested that if the issue was not yet moot, it would certainly be when the “Facebook generation” rules the marketplace. “The new generation is happy to share the data,” she said. “And if they get something out of it, they'll be even happier.”

Taking the Plunge

Most OEMs continue to hesitate in regards to using data, despite the fact that they see a wealth of business cases. “We are definitely seeing business cases for Big Data, and there are huge ones out there,” said Volvo's David Green. “For example, we can see how people use their cars. That is valuable data.”

He said Volvo was currently equipping cars with bespoke telematics units and were allowing employees to drive them around Stockholm. The data is then extracted from these cars and fed it back into the company's system for analysis.

Green also said that the amount of data generated by sensors on Volvo cars led him and his colleagues to come up with many ideas for leveraging it—“some of them not quite legal,” he admitted.

Green said his favorite idea was using the driver distraction camera to detect where the driver is looking at billboards on the roadside, and to provide the information to advertisers who use this medium. “But that one is definitely not going to happen,” he said.

Green said that Volvo, no doubt like many other OEMs, was reluctant to take the plunge with data because it was potentially too disruptive. “There are a lot of ideas out there, but we have a great deal of trouble implementing them. It's a big mindset shift to go from producing cars to producing services. The big question is, how much money can you get out of it?”

Sroczynski was adamant that car-makers must stop being timid about data. “You just have to start,” she said. “If you wait, nothing will happen. You have to have guts. No guts, no glory.”

Lützner echoed her words.” You have to have the guts to start something and build it up step by step. We all have to take the plunge. We all have to take certain risks.”

Siegfried Mortkowitz is a regular contributor to Telematics Update.

For the latest telematics trends, check out Connected Fleets USA on November 20-21 in Atlanta, USA, Consumer Telematics Show 2015 on January 5 in Las Vegas, Connected Fleets Europe 2015 on March 10-11 in Amsterdam, and Telematics Berlin 2015 on May 11-12 in Berlin.