The role of telematics in next-gen mobile advertising

The role of telematics in next-gen mobile advertising

In April, commerce giant eBay said it would acquire Where, an up-and-coming provider of location-based services, including mobile advertising, search and recommendations. EBay said it would first integrate Where into PayPal, its electronic payments platform, “to make it even easier for PayPal customers to take advantage of the local deals.” The entry of eBay into location-based services shows just how complex the ecosystem of partners and services is becoming—and, perhaps, how there is potential for almost any kind of company to play.

Before the deal was announced, David Chang, vice president of product and strategy for Where, told TU that the ultimate goal of in-car advertising would be for advertisers to connect their ads to actual transactions. “In order to move the industry forward, perhaps it will take a small player working with one with a widespread distribution base to get these ads, deals, or commerce opportunities out there,” he said. Hint, hint.

Although eBay’s base is online merchants, the firm might someday enable mobile users to find nearby gas stations, compare prices—or availability of charging stations—and then pay via PayPal, all from the phone. (For more on EVs and consumer transactions, see ‘Telematics and EVs: Things to do while charging’; for more on in-car ads, see ‘Can telematics make ads profitable in cars?’.)

How will consumers behave in cars?

Another question for next-generation mobile advertisers, and the companies that deliver them to cars or phones, is whether user behavior in the car will differ from that of other cell phone users. NAVTEQ is the most established company delivering ads to mobile devices, including GPS systems, and it just announced the results of a new series of campaigns with Poynt. Poynt is a location-aware smartphone app that lets people find nearby local businesses, people, restaurants, movie theaters, and gas prices. (For more on location-based services, see ‘Telematics and local search: The next big thing’.)

In a series of campaigns, NAVTEQ LocationPoint delivered location- and contextually-aware ads for national gas station and restaurant brands to Poynt users who were conducting related searches. The maiden campaign featured hyper-local ads for national gas station and restaurant brands throughout the United States. All four campaigns performed three to five times better than the industry average click-through rate for mobile ads. Together, the campaigns averaged a 2.68 percent click-through rate, with various measures of engagement, such as a phone call to the business, ranging from 4.49 percent to 11.25 percent.

“We have a complete log of what users do, and we have information on how each user interacts with the search results and advertisements,” says Andrew Osis, CEO of Poynt. The company’s technology can measure how many users click through from an ad to a website, click on the advertiser’s phone number, or click for more information.

Poynt uses GPS, cell site location, and user-stated location or destination to target location-based ads. The app also lets users determine how far they want to search from their current location. Its data partners include yellow pages providers, CitySearch, OpenTable and many others. “We tend to work with multiple providers,” Osis says, “using the data in combination to get the very best results you can get.”

Neither Poynt nor Where is working directly with manufacturers of GPS devices or embedded automotive hardware. Chang said that the long product development cycles in the auto industry were a barrier to startups like his, although Where delivers ads to partners including Pandora and AccuWeather.

Reaching the right audience

One of the biggest barriers to advertising within telematics apps is gaining enough scale. When media agencies plan advertising campaigns for their clients, they expect reach—the number of people in the audience, and frequency, or the number of times each person will see the ad—of at least several million. And most advertisers expect to be able to segment the audience, making it even more challenging for mobile networks to meet their RFPs. (For more on reaching consumers through telematics, see ‘Telematics and the socially networked car’, ‘Telematics and the socially networked car, Part II’, ‘Getting inside the mind of the telematics consumer’, and ‘Turning telematics data into business critical information’.)

Tendril, for example, directly plugs advertising in its brochure for the Tendril Energize platform but a company spokesperson told TU, “The levels of consumer engagement we discussed is a bit ahead of where the company stands currently with its technology.” Ditto with the Blink Network of public electric vehicle chargers, operated by ECOtality. (For more from ECOtality, see ‘M2M telematics: Turning the OEM development model on its head’.) A company spokesperson said ECOtality is working on advertising models and strategic partnerships with agencies and ad networks to display content on the Blink Network of EVSEs.

Advertising networks that can’t promise this scale have to do intense business development work in order to get agencies to agree to partner in tests. The recent announcement that Peugeot will include NAVTEQ LocationPoint in its dealer campaign highlights the fact that the latter is just beginning to achieve this. In a press release, Bruno Bourguet, senior vice president of EMEA sales for NAVTEQ, said, “Our aggressive expansion program has paved the way for the NAVTEQ LocationPoint Advertising network to provide brand advertisers with large-scale audience reach.”

It took cell phone advertising seven or eight years after the introduction of data-enabled phones to really take off. In 2010, spending was between $550 and $650 million in the US, according to an industry survey conducted by PwC and sponsored by the Interactive Advertising Bureau. That’s not even a drop in the bucket compared to automakers’ revenues.

But telematics’ secret sauce when it comes to advertising is not limited to location. More advanced systems will be able to offer all sorts of other information that will be actionable to advertisers, such as fuel or charge level, traffic conditions or the driver’s level of alertness. Local businesses will be able to profit from leveraging this information, and companies that can connect drivers will sellers should profit as well.

Susan Kuchinskas is a regular TU contributor.

For all the latest telematics trends, join the sector’s thought leaders at Telematics Detroit 2011 in Novi, MI on June 8 and 9.

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