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The Connected Car: Advertising's Next Frontier · Leading Local Insights

• 0:34
  Rick Ducey: Hello and welcome to BIA Advisory Services Leading Local Insights Podcast.
• 0:39
  Rick Ducey: I'm Rick Deacy, Managing Director of BIA Advisory Services, your source for local media market intelligence, insights, data, and strategies to grow your business.
• 0:48
  Rick Ducey: Today we're going to talk about the automotive market and how connected cars are leading to innovations and changes in how advertising will work.
• 0:56
  Rick Ducey: Looking at today's cars truly is like thinking about everything all at once.
• 1:00
  Rick Ducey: A lot of things are happening.
• 1:02
  Rick Ducey: The car is far more than a solution for moving from point A to point B.
• 1:06
  Rick Ducey: It's a connectivity hub with capabilities we're still imagining uses for.
• 1:10
  Rick Ducey: For today, our focus on cars will center on how they have become media ecosystems and how this impacts advertising.
• 1:19
  Rick Ducey: We're working today with an expert in this space, Roger Longdog, chairman and founder of Strategia Now Consulting, a firm with the mission of helping ecosystem players sort through everything all at once in the automotive industry to develop strategies to make it all work better.
• 1:35
  Rick Ducey: Roger, welcome to BIA's Leading and Local Podcast.
• 1:38
  Rick Ducey: Before we dig into a few questions, tell us a bit about yourself, how you got into cars and connectivity, and how your company is helping the auto industry do things better.
• 1:49
  SPEAKER_00: Hey, Rick, thank you for the opportunity to chat and uh talk a little bit about uh my work in the connected car space.
• 1:57
  SPEAKER_00: So some people describe me as the most uh connected executive in the connected car industry.
• 2:04
  SPEAKER_00: Uh so I do make it a point to network far and wide.
• 2:07
  SPEAKER_00: Uh just came from two or three events happening simultaneously in Detroit uh this week, uh and off to another event uh outside Stuttgart, Germany uh next week.
• 2:19
  SPEAKER_00: Uh so uh I'm looking at uh car connectivity, and I like to say that car connectivity is kind of a guarantee of lifetime employment because car companies are never going to figure this out.
• 2:30
  SPEAKER_00: Uh it's a moving target, it's always changing.
• 2:34
  SPEAKER_00: And um sometimes it's a high priority, sometimes less so, uh, but increasingly so uh in a world where the value proposition is increasingly defined by that connectivity.
• 2:46
  Rick Ducey: You are not just the car guy, you are the connectivity car guy.
• 2:51
  Rick Ducey: That's well let's pick it up from where you just sort of set it up.
• 2:55
  Rick Ducey: There's a lot happening, and that comes in fits and bursts, I guess.
• 3:00
  Rick Ducey: Um there's sort of quiet cent periods and then hurry-up periods.
• 3:03
  Rick Ducey: Um so I guess from a big picture perspective, how would how would you characterize a connectivity car market now, where we are now, and say where we're headed in 26, 27?
• 3:15
  SPEAKER_00: So we're still transitioning uh from you know that that 20-year-old now value proposition of OnStar uh to a uh value proposition that isn't simply defined by uh uh a response to a crash.
• 3:30
  SPEAKER_00: Not to say that isn't important, and some automakers still haven't sorted that value proposition out, but being connected to cars has a whole variety of other uh value propositions.
• 3:42
  SPEAKER_00: Uh over the past uh say 10 years or 15 years, there's been a recognition that getting vehicle data uh can enable automakers to uh anticipate uh service opportunities, so customer relationship management, CRM opportunities, um, and also has opened the door to uh other uh value propositions like Sirius XM, you know, delivering content uh to vehicles, uh enabling the connected uh smartphone experience, so CarPlay and Android Auto, so you're getting your apps in your car.
• 4:18
  SPEAKER_00: Uh there was a time when car makers uh were trying to create their own app stores.
• 4:23
  SPEAKER_00: Actually, that's beginning to happen uh again.
• 4:26
  SPEAKER_00: Uh but the new phase that we're talking about now uh is of course, I I you knew I was going to bring this up, but or or maybe you didn't.
• 4:35
  SPEAKER_00: Uh artificial intelligence is part of the conversation.
• 4:38
  Rick Ducey: Whoa, first time I've heard of it.
• 4:41
  SPEAKER_00: Yeah, let me let me tell you a little story about artificial intelligence.
• 4:45
  SPEAKER_00: So my my wife got her notification in her 2026 uh Chevrolet Equinox that Gemini is now uh being activated in the car.
• 4:55
  SPEAKER_00: What was there previously was Google Assistant.
• 4:58
  SPEAKER_00: And uh presumably uh there's all kinds of enhanced uh opportunity to interact with the vehicle, uh, but based on one of my son's uh less than satisfactory experiences with Gemini on his phone connected in his car, uh, whereas this experience in the Equinox is uh over the embedded device in the car, not a connected smartphone experience.
• 5:20
  SPEAKER_00: But um since my son made it sound kind of intrusive and uh annoying, uh he sort of rejected uh the initial uh opportunity to engage with Gemini.
• 5:35
  SPEAKER_00: But certainly Gemini's presence in the vehicle uh uh when she will she will accept it at some point, I'm sure.
• 5:43
  SPEAKER_00: Resistance is futile after all.
• 5:46
  SPEAKER_00: But um uh it will enable uh uh unique experiences while driving and presumably uh you know distraction-mitigated opportunities uh where you can just ask for things uh as opposed to looking for buttons and knobs and and what have you uh in the vehicle.
• 6:04
  SPEAKER_00: So we are entering the world of uh AI-infused customer engagement, and uh that has a quite a broad uh range of implications, of course.
• 6:15
  Rick Ducey: Yeah, and staying with the broad range, a kind of big picture for a moment, um, and then I do want to get more specifically into advertising.
• 6:22
  Rick Ducey: So the connectivity, the engagement, um that's the way the car OEMs are differentiating brand offers to some extent, although it seems like AI, search um are gonna be kind of similar experiences, maybe Clot or ChatGPT instead of Gemini, uh, but similar kind of function.
• 6:39
  Rick Ducey: Um and interactivity, and and there's a thing that the the car OEMs are well, you pay for the car and drive it off a lot, goodbye.
• 6:47
  Rick Ducey: It's like, well, we don't want that.
• 6:48
  Rick Ducey: We want to hang on to you.
• 6:49
  Rick Ducey: So what kind of recurring revenue can we get?
• 6:52
  Rick Ducey: You know, things like service financing parts, maybe.
• 6:55
  Rick Ducey: Uh, but some of these services we're talking about, the interactive services, the um connectivity, and like they're saying the app store.
• 7:02
  Rick Ducey: And that's sort of a mixed bag for consumers.
• 7:04
  Rick Ducey: It's like, oh man, another subscription, really?
• 7:06
  Rick Ducey: I have to pay a subscription for my car.
• 7:09
  Rick Ducey: So I guess it seems that sometimes the OEMs are like, all right, well, spot you a couple of these things for free.
• 7:14
  Rick Ducey: Uh, but here are some even cooler things that you need to pay a subscription for.
• 7:17
  Rick Ducey: So there's the engagement, there's the value-added experience, there's a connectivity.
• 7:22
  Rick Ducey: Um, what how do the economics shake out?
• 7:25
  Rick Ducey: Is that going to be a viable long-term revenue stream for um OEMs?
• 7:30
  SPEAKER_00: Well, it's turning in, it's already a multi-billion dollar uh value proposition for for car companies.
• 7:35
  SPEAKER_00: Uh, but some car companies have been a little more clever and successful in engaging customers in this way than others have been.
• 7:42
  SPEAKER_00: Uh, we are in the process of uh uh moving along the spectrum towards wider electric vehicle adoption.
• 7:50
  SPEAKER_00: Certainly the uh uh hostilities currently underway in the Middle East, I think, are contributing to a reconsideration of uh electric vehicles uh throughout the world, um, and not least of which in the US.
• 8:04
  SPEAKER_00: And but the problem is an existential one for the automotive industry in a shift from uh internal combustion engines to electrified powertrains.
• 8:14
  SPEAKER_00: Uh yeah, the the uh the entire dealer channel uh is going to lose a major hook uh that it has into the consumer for you know oil changes and you know transmission servicing and brake brake work.
• 8:28
  SPEAKER_00: And I mean EVs have regenerative braking that uh actually uh reduces the need for uh you know brake repair and servicing, um, although it does the EVs do have continue to have demand for tire replacement.
• 8:46
  SPEAKER_00: Uh but there's a real it's a real existential crisis for the industry because the automotive industry is a B2B industry.
• 8:52
  SPEAKER_00: The the car makers sell the cars to and through the dealers, right?
• 8:57
  SPEAKER_00: Is the is the tip of the spear for interacting with the consumer.
• 9:00
  SPEAKER_00: And EVs, I mean, the average dealer does not want to sell you an EV because they see that customer driving away and they're like, that may be the last time I see that customer.
• 9:11
  Rick Ducey: No, exactly.
• 9:14
  SPEAKER_00: See you, see you, Charlie.
• 9:15
  SPEAKER_00: Uh, you're not gonna see me again.
• 9:18
  SPEAKER_00: And uh so the automakers have a, as I said, an existential need to engage with the consumer, which which brings that connectivity into greater focus.
• 9:29
  SPEAKER_00: So um that is the sort of saving grace potentially.
• 9:34
  SPEAKER_00: But as you say, many consumers, you know, ever since COVID, we've got you know major subscription fatigue.
• 9:42
  SPEAKER_00: And so the average customer is not interested in adding another subscription, especially when they just don't use their vehicle that much to really justify it.
• 9:51
  SPEAKER_00: Even Sirius XM is down to, you know, I think it's two or three dollars a month, pretty much.
• 9:57
  SPEAKER_00: Um I hope that's not a I hope I'm not revealing some deep dark secret to anybody, but typically you can get Sirius XM for about three bucks a month.
• 10:06
  SPEAKER_00: Um, so and they are losing subscribers themselves, uh, of course.
• 10:11
  SPEAKER_00: Um so the the car makers that are getting a little clever about this, uh, and I would have to put GM at at the head of that field, are including the cost of connectivity in the price of the car.
• 10:24
  SPEAKER_00: So GMs, new cars, you get eight years free connectivity.
• 10:30
  SPEAKER_00: Yeah, don't worry, you're paying for it.
• 10:32
  SPEAKER_00: It it's included.
• 10:33
  SPEAKER_00: Um, but they're they're trying to take take that pain out because if they if they're not connected, they're not gonna know what you're doing with the car.
• 10:41
  SPEAKER_00: They're not there they're not going to know what's happening with the car.
• 10:44
  SPEAKER_00: Uh they're not going to know what's happening with you.
• 10:47
  SPEAKER_00: And uh that is critically important.
• 10:51
  SPEAKER_00: Um and uh you know now now more than ever.
• 10:54
  SPEAKER_00: Strangely, not too many automakers have followed in their path.
• 10:58
  SPEAKER_00: So uh Toyota has 10 years of free connectivity, but it's mostly low bandwidth stuff.
• 11:03
  SPEAKER_00: So with EM, you're getting uh Google Maps and Google Assistant, as I said, now now Gemini, and you're also getting a Google Play Store uh in the car.
• 11:13
  SPEAKER_00: And so Toyota's not giving you anything like that um as a value proposition.
• 11:18
  SPEAKER_00: Um so Google is helping to define that value proposition and uh they're delivering that over the embedded device in the car.
• 11:26
  SPEAKER_00: So it's not from your projected uh smartphone, uh, which means so they're seeing everything you're doing.
• 11:34
  SPEAKER_00: Whereas if you if you project from your smartphone, whether it's uh you know an Apple CarPlay experience or Android Auto, the automaker can't see what you're doing in the car, no idea, not a clue.
• 11:45
  SPEAKER_00: And so this GM approach sets the stage for uh a media engagement opportunity, a targeted advertising uh proposition.
• 11:58
  SPEAKER_00: Now, GM tried it once before with Zeebo with the uh their marketplace application, and that that failed miserably.
• 12:05
  SPEAKER_00: They had I I there's so many reasons why it failed.
• 12:08
  SPEAKER_00: Um, you know, it was awkward, it was insufficiently personalized, they didn't have enough advertising inventory um, you know, to even offer that was relevant to the drivers they were trying to reach out to.
• 12:20
  SPEAKER_00: Um but I think we're entering a new phase.
• 12:23
  SPEAKER_00: So GM hasn't really brought the personalization to bear quite yet, but in terms of value, they are highly motivated.
• 12:31
  SPEAKER_00: So it it when OnStar first got started about 20 years ago, uh it was arguably kind of the redheaded stepchild within the GM organization.
• 12:40
  SPEAKER_00: You know, uh, it was a source of cost, it was a problem, and it was associated with automatic crash notification.
• 12:47
  SPEAKER_00: But now what uh GM is doing is uh on the balance sheet, they're recognizing um seven and a half billion dollars in deferred uh revenue this year, uh most of which will be uh reflected from building in the cost of connectivity in their cars.
• 13:07
  SPEAKER_00: So they're treating it as deferred revenue.
• 13:10
  SPEAKER_00: And uh$7.5 billion, now you're talking about some serious Dosh, and uh it's a much more strategic value proposition.
• 13:18
  SPEAKER_00: Now, in addition to that, they're also selling, believe it or not, Wi-Fi subscriptions in their cars.
• 13:23
  SPEAKER_00: That's another half billion dollars, believe it or not, and probably uh over a billion dollars in um Supercruise subscriptions, so people are willing to pay for that.
• 13:34
  SPEAKER_00: With new cars that are equipped with Supercruise, there are three years of free uh Supercruise uh access.
• 13:41
  SPEAKER_00: And so, and then there's traditional uh OnStar subscriptions.
• 13:45
  SPEAKER_00: So at the end of the day, you're talking about you know nearly$10 billion in revenue.
• 13:50
  SPEAKER_00: So suddenly OnStar is material to GM's bottom line, and as I said, a brand and value defining uh proposition.
• 13:58
  SPEAKER_00: So now the stage is set to engage with the customer.
• 14:02
  SPEAKER_00: And as I was saying, they've really just begun the personalization journey.
• 14:09
  SPEAKER_00: Um they really haven't caught up to the leader in this world, which is Tesla.
• 14:14
  SPEAKER_00: You know, Tesla will you know uh acknowledge you, it's going to identify you as you get in the car, either via the key fob or by your uh mobile device or both, and um you know uh enable all the appropriate settings.
• 14:29
  SPEAKER_00: The next stage uh in that process, and I'm I'm I don't believe Tesla is quite here yet, but uh it's certainly going to be coming from GM very soon and other automakers, a personalized media profile uh enabled in the vehicle.
• 14:44
  SPEAKER_00: So your your media preferences.
• 14:47
  SPEAKER_00: So here in the in the DC local market, which uh you and I share, um, you'd appreciate this.
• 14:53
  SPEAKER_00: My my wife is a WTOP listener, I'm a WAMU listener.
• 14:57
  SPEAKER_00: Um so you know that that would happen automatically.
• 15:01
  SPEAKER_00: But of course, the implications just radiate out from that.
• 15:04
  SPEAKER_00: You know, we did we have different podcast preferences, uh, there are other you know fallback stations we might want to be listening to, uh maybe uh different uh streaming app preferences.
• 15:15
  SPEAKER_00: Uh if I uh if I would deign to get myself a Sirius XM subscription, I would have some Sirius XM channel preferences.
• 15:24
  SPEAKER_00: Uh the platform in in the GM vehicles is enabled for you know cross-sourcing of media from from a variety of sources.
• 15:33
  SPEAKER_00: Um the core issue, though, uh for me as a recent uh car rental uh user is uh where is the radio?
• 15:43
  SPEAKER_00: Um because all of these experiences have a location element to them.
• 15:48
  SPEAKER_00: Again, the cars are connected, uh, so the cars should know where you are, where you're going, what you're doing.
• 15:53
  SPEAKER_00: Um but radio by definition is local.
• 15:57
  SPEAKER_00: Um and um so uh it should be the easiest thing to find.
• 16:03
  SPEAKER_00: And I just had a rental car, and I'm hesitant to name names because it's always you know embarrassing.
• 16:09
  SPEAKER_00: And I know millions of dollars have been spent and uh engineers have sweated out the details, but I had a rental car, uh, it will remain nameless.
• 16:18
  SPEAKER_00: Um uh they were going with a an older design that that uh uh but you know old is new again, right?
• 16:26
  SPEAKER_00: So it was a new car, but with an old design.
• 16:28
  SPEAKER_00: So the display was without beyond my reach, so it was not a touch screen, and it had a hardware controller, you know, a rotary hardware controller.
• 16:37
  SPEAKER_00: Which I worked a little bit.
• 16:39
  SPEAKER_00: That's fine.
• 16:40
  SPEAKER_00: That's that's where you know, BMW with the iDrive, that's great.
• 16:43
  SPEAKER_00: But the iDrive works because they've put the time in to get the menuing right.
• 16:48
  SPEAKER_00: Uh and um this particular automaker who will remain nameless did not get the menuing right, and it was uh it was kind of a disaster.
• 16:57
  SPEAKER_00: Um trying to find the local radio stations and to switch between them because I I wanted to I wanted to find the local NPR station uh and I was really struggling.
• 17:09
  SPEAKER_00: Um wasn't even sort of a genre genre sorting, um, which which is going to be the future.
• 17:15
  SPEAKER_00: Even Sirius XM on the th the 360 uh platform, they've they've got genres now because there are just so many Sirius XM stations.
• 17:25
  Rick Ducey: Can you just um do a verbal command?
• 17:28
  Rick Ducey: Like on TV these days, you you just call out a TV show title and it'll find it for you, depending on a device and so on that you're using.
• 17:37
  SPEAKER_00: Is that wouldn't that be nice?
• 17:40
  SPEAKER_00: Um I I I think you know we'll get there.
• 17:43
  SPEAKER_00: Uh as I said, you know, Gemini is there, but even in uh the Equinox, you have to specifically say um the frequency of the radio station.
• 17:56
  SPEAKER_00: Um and um it's not enough to say, you know, tune to WAMU.
• 18:03
  SPEAKER_00: You gotta say tune to WAMU 88.5 FM.
• 18:07
  SPEAKER_00: Uh interesting.
• 18:10
  Rick Ducey: I watched a WAMU person, and like at home, she'll say that to the smart speakers.
• 18:15
  Rick Ducey: Um and it gets right there.
• 18:17
  Rick Ducey: Then you go to the car and it's actually a dumber experience.
• 18:20
  SPEAKER_00: Yeah, yeah.
• 18:22
  SPEAKER_00: So we're we're going to get there.
• 18:23
  SPEAKER_00: We're going to get there.
• 18:24
  SPEAKER_00: But but again, the car is a uniquely location-relevant uh advertising area.
• 18:32
  SPEAKER_00: And I so I just came from you know one of the two events I went to uh was uh an in-cabin sensing event.
• 18:39
  SPEAKER_00: Uh and there are so many sensors in the car that they're going to contribute to this to a new experience in several different ways.
• 18:49
  SPEAKER_00: One is um making sure you're paying attention to the driving task and you're gonna ask about that, yeah.
• 18:55
  SPEAKER_00: Driver monitoring, uh, but also uh maybe uh paying at enabling different interactions uh with the infotainment system could be, you know, there may be in the future gesture recognition.
• 19:08
  SPEAKER_00: I don't want to suggest mind reading, but there but there is some EEG technology being proposed that could uh be measuring your reaction to uh some content or or a listening experience.
• 19:20
  SPEAKER_00: Um but also uh, well, I said gesture recognition, even seeing where you're looking, where you're glancing, um it has it has potential to create advertising uh opportunities.
• 19:35
  SPEAKER_00: Now again, uh presumably in the context of an opt-in environment, uh, so that um you know uh you're not subjected to something that you know crosses the line into a surveillance experience.
• 19:51
  Rick Ducey: Yeah, I'm just sort of visualizing um society run among where you're in your car, um, you put your seatbelt on, and you go to get out, and you're not gonna get out until you finish watching this ad and buy something.
• 20:03
  Rick Ducey: Then we'll let you go.
• 20:04
  SPEAKER_00: Yeah, we want we want to avoid surveillance marketing, but there are some pleasing experiences.
• 20:09
  SPEAKER_00: So I just I just found out recently that at the Detroit Metropolitan Airport, evidently I've been going to the wrong terminal.
• 20:15
  SPEAKER_00: Uh it's it's a Delta hub, and I'm a United Flyer.
• 20:19
  SPEAKER_00: Apparently, in uh on the Delta side of uh DTW, um they have uh displays where you can scan your uh boarding pass, and then as you move through the airport, uh you will get personalized information delivered to you um based on wherever you're going, uh whatever your gate you're trying to get to, whatever your flight flight you're on, uh, and you and other people passing will only see your personal information on the display, kind of like minority report.
• 20:50
  Rick Ducey: Right, exactly.
• 20:51
  Rick Ducey: Yep.
• 20:51
  Rick Ducey: That's what I was thinking.
• 20:52
  SPEAKER_00: So but I I expect something similar in the car that you will be identified getting into the car and um and and it will be more location relevant.
• 21:03
  SPEAKER_00: You know, technologies like geobroadcast solutions, where you have a you know the zone casting technology to segment uh what you're broadcasting.
• 21:11
  SPEAKER_00: You know, I was complaining to you recently about getting hearing all the David Trone advertising on my side of uh the Potomac.
• 21:20
  SPEAKER_00: And um, you know, uh David Trone, lovely guy.
• 21:23
  SPEAKER_00: I love Total Wine and Beverage, but um he's not running in my district, so it's not super relevant to me.
• 21:31
  SPEAKER_00: Uh although it's a fascinating story, this battle he's uh engaged in.
• 21:37
  SPEAKER_00: But you know, I I think people do want, you know, uh under appropriate circumstances, hyper-relevant or very relevant uh content and advertising uh information, and maybe even have the ability to you know to block certain uh uh advertising uh propositions.
• 21:56
  SPEAKER_00: Um but the car with the enhanced in-cabin sensing and awareness and engagement.
• 22:01
  SPEAKER_00: And yes, the obvious thing uh that hasn't really been widely embraced yet in the US, although it has in China, is facial recognition for credentialing.
• 22:12
  SPEAKER_00: Uh so bringing in your you know personal preferences for payment, for cloud content, uh for media, et cetera.
• 22:19
  SPEAKER_00: Um we're we're going to get there too.
• 22:23
  SPEAKER_00: We're just on the cusp of that.
• 22:25
  SPEAKER_00: So AI has opened that door, the sensors are there.
• 22:28
  SPEAKER_00: Uh it's just a question of uh implementing that that value proposition.
• 22:32
  Rick Ducey: You know, I was thinking as you're talking.
• 22:34
  Rick Ducey: In the automobile, facial recognition, personalized fobs, uh different signals you can give, potentially to the car, and whoever's aggregating all that data.
• 22:45
  Rick Ducey: Um, you can get pretty targeted, pretty personal with people versus in the home.
• 22:51
  Rick Ducey: So we love connected TV uh as an industry because there's a lot of data-driven targeting you can do, uh, but that resolves down to households or boxes.
• 23:00
  Rick Ducey: We don't actually know necessarily who's in front of the class unless you have some supplementary measurement systems, and that's a challenge and an issue on the video side of things.
• 23:10
  Rick Ducey: But in a car, you you pretty much um know who's there.
• 23:14
  Rick Ducey: Um, I suppose you can, you know, using the car technology, know their weight, know their height, you know, know their emotions by their facial expression, um and getting some um, I don't know, ECG measurements from the from seat sensors, whatever.
• 23:30
  Rick Ducey: So you can paint a pretty detailed picture, and some of that's interesting to pharma companies, some of it's interesting to you know, CPG companies, whatever.
• 23:40
  Rick Ducey: And so that pushes the limits of uh technology, I guess, but we're getting there faster than we probably are with uh public policy or permissioning um with all that data you can extract from a car.
• 23:51
  SPEAKER_00: Well, yeah, so the key is to do so without without being distracting.
• 23:55
  SPEAKER_00: Uh and um I you know I I've just I've seen that the airline industry, strangely enough, is further along uh in doing this.
• 24:04
  SPEAKER_00: So I I didn't realize this was going on until I knew to look for it.
• 24:09
  SPEAKER_00: So on my United flights, if I if I sit down, um after it takes it takes a minute to to happen, but it asks for your month and date of birth just to confirm.
• 24:20
  SPEAKER_00: And once you put your month and date of birth, it says, you know, like hello, Rick, Roger, and it has all of your travel information uh available, etc.
• 24:31
  SPEAKER_00: Now Delta got this got the ball rolling doing this, and I believe they're a little more uh fully evolved uh in that respect.
• 24:41
  SPEAKER_00: But um so in the car, yes, uh it's always been a more privileged uh advertising environment, advertising opportunity, um, because it's such a personal space.
• 24:54
  SPEAKER_00: Uh because you know, you know, 80% of the time you're driving by yourself.
• 24:59
  SPEAKER_00: Um so you could just you know get a very uh personalized uh engagement and your history is well understood by the vehicle.
• 25:07
  SPEAKER_00: Um you know you know your car knows where you go every day, basically, uh these days and what you're doing.
• 25:15
  SPEAKER_00: Um and uh you know my car is always trying to to uh uh guess to guesstimate my uh destination because typically it's home, gym, gym, home.
• 25:28
  SPEAKER_00: You know, I mean sort of yeah, Roger.
• 25:31
  SPEAKER_00: I know it's very exciting.
• 25:32
  SPEAKER_00: But um so uh uh so the opportunities are there to to deliver a uh an extraordinarily personalized experience and value proposition and the connectivity.
• 25:44
  SPEAKER_00: Um, you know, we already have cellular, um Wi-Fi is becoming more widespread, satellite is entering the equation, uh and I mean more uh uh satellite, not just Sirius XM, but um low Earth orbit satellites to fill in the gaps where there's no cellular coverage.
• 26:02
  SPEAKER_00: And uh who knows, maybe ATSC 3.0 in the not too distant future for digital television, which opens the door to another piece of the engagement proposition, which is visual.
• 26:14
  SPEAKER_00: So and that has implications for advertising as well, as you know.
• 26:18
  SPEAKER_00: Um so digital radio is is uh enabling a visual experience in the car.
• 26:25
  SPEAKER_00: Many of the rides I've had from Uber and Lyft around the world uh have drivers who are already watching video as they're driving.
• 26:35
  SPEAKER_00: That's what you want.
• 26:36
  SPEAKER_00: Maybe a suboptimal value proposition.
• 26:39
  SPEAKER_00: But uh when I'm talking about visual engagement, maybe I'm not talking entirely about video uh uh live video.
• 26:47
  SPEAKER_00: Most of them are watching, you know, uh music videos.
• 26:50
  Rick Ducey: Um but I'm gonna have um full self-driving on, we're okay, maybe.
• 26:56
  SPEAKER_00: Yes, in a Waymo, I I would have no argument that there's a problem, but in a human-driven vehicle, maybe not the best idea, but but it is becoming much more widespread.
• 27:06
  SPEAKER_00: But visual advertising elements that aren't necessarily distracting but are enhancing the uh advertising communication in the car, you know, but with basic metadata, you know, low bandwidth kind of stuff.
• 27:18
  Rick Ducey: Exactly.
• 27:18
  Rick Ducey: With so for the advertising, uh just out of curiosity, we can target, you know, given various limits with great specificity, personalized ad content um put to a person, um, to a location, and to a point in their purchase journey, you know, however we want to um think about where they are now, um, whether it's an impulse by stop by this, you know, Duncan or Starbucks and get a free pastry if you buy a pound of coffee or whatever.
• 27:47
  Rick Ducey: Um so it's a targetable environment and um you know, radio, TV, um, satellite, um will sell ad inventory inside their um media entertainment experience, their proposition.
• 28:02
  Rick Ducey: Will, I mean, will car manufacturers, car dealerships become essentially publishers and have their own ad inventory?
• 28:11
  Rick Ducey: They're putting on speakers and screens in the cars.
• 28:15
  SPEAKER_00: So the importance of this, I think, is made clear by uh Sirius XM's interest in acquiring iHeartMedia, uh, because that opens the door to the local advertising uh piece that's always been missing from Sirius XM.
• 28:28
  SPEAKER_00: Uh as to the interested parties and potential sources of that advertising, well, yes, of course, you know, the the the sky is the limit.
• 28:36
  SPEAKER_00: Um uh you know, virtually uh anything is possible.
• 28:40
  SPEAKER_00: Uh I would argue that um uh advertising on my phone is super unwelcome because that screen is so tiny.
• 28:48
  SPEAKER_00: Um whereas whereas in the car, you have opportunities to uh communicate either either with video or audio that are less uh intrusive uh and distracting and uh and bothersome.
• 29:01
  SPEAKER_00: Uh and you can have you know uh full control uh you know of those experiences.
• 29:07
  SPEAKER_00: Um who does the advertising?
• 29:09
  SPEAKER_00: Um tough to say, but the the the nature of that value proposition where you could uh know, as Xperia has demonstrated with DTS Auto Stage, uh in real time or near real time, uh who is where at any given time.
• 29:26
  SPEAKER_00: Uh in other words, are they in proximity to or on their way to a destination where there's uh an opportunity for engagement?
• 29:34
  SPEAKER_00: Um, Nielsen never had that value proposition.
• 29:39
  SPEAKER_00: Nothing close to that near real time kind of understanding.
• 29:42
  SPEAKER_00: And I I think I well, this is where your area of expertise is, not mine, but the idea of programmatic advertising being driven by uh that kind of a data set um uh does uh open the door to some intriguing opportunities.
• 29:56
  Rick Ducey: Literally and figuratively.
• 29:58
  Rick Ducey: Yes.
• 29:59
  Rick Ducey: Sorry, I had to.
• 30:00
  Rick Ducey: Um so Roger, uh boy, we covered a lot of ground, uh, and it's really interesting.
• 30:06
  Rick Ducey: Um anything else that um you wanted to bring to our attention today?
• 30:11
  SPEAKER_00: Uh the only other thing I would say is cars, believe it or not, are getting safer.
• 30:16
  SPEAKER_00: So all these sensors are making them safer.
• 30:19
  SPEAKER_00: So I I think that the uh the opportunity to engage uh you know with a marketing message is happening in a safer driving uh scenario, safer driving environment.
• 30:32
  SPEAKER_00: And um, you know, I don't know about you, but I've noticed a lot of severe weather lately.
• 30:38
  SPEAKER_00: Uh uh and um now more than ever, I think people are going to want to have the radio on um to you know know what's happening in terms of weather, in terms of traffic, and um, you know, that radio is the best source for that information, and uh it's a it's a great medium for engaging with the customer with those advertising messages in that kind of uh locally relevant context.
• 31:05
  Rick Ducey: Makes sense.
• 31:06
  Rick Ducey: Roger, thank you so much for being with us here today and sharing your expertise in connected cars, engaged cars, what advertising is looking like now, how it's driven by metadata and signals and personalization and different layers in the technology.
• 31:20
  Rick Ducey: I mean, it's it's a unique environment that's um coming up faster than I think we might expect.
• 31:26
  Rick Ducey: It's been sort of simmering for a while, but a lot of things are coming together uh very quickly.
• 31:31
  Rick Ducey: And um the auto space uh for entertainment, information, advertising, it seems like a lot of people are focused there to start to bring some innovation to that space.
• 31:42
  Rick Ducey: And it's gonna drive the economics, you know, sooner rather than later, it seems like.
• 31:45
  Rick Ducey: 100%.
• 31:47
  Rick Ducey: Just quickly, actually, before we before we break, you'd mentioned EVs and kind of where that is in the market.
• 31:52
  Rick Ducey: And um, just given the revenue constraints or revenue generating constraints with EVs versus internal combustion engines, it's like a dealer would rather sell a um an internal combustion car than an EV car.
• 32:05
  Rick Ducey: Um, so does that have advertising implications?
• 32:08
  Rick Ducey: I mean, so will be will there be less investment in advertising?
• 32:11
  Rick Ducey: And I know this sort of is um uh a tangent to your main area, but uh so for EV, does that imply there'll be less advertising for EV and more for internal combustion?
• 32:22
  Rick Ducey: Or how does that shake out in spending?
• 32:24
  SPEAKER_00: Oh, you mean advertising of those vehicles?
• 32:27
  SPEAKER_00: Exactly.
• 32:28
  SPEAKER_00: Uh yeah, funny.
• 32:29
  SPEAKER_00: So I traded in um an Ionic 5 last fall for that that uh Hyundai Ionic 5 EV that uh my wife and I had owned for three years uh for Chevy Equinox.
• 32:41
  SPEAKER_00: And um at the time there was virtually zero advertising for the Ionic 5.
• 32:47
  SPEAKER_00: Uh it was in huge demand, uh actually, at the time that I had acquired it three years earlier.
• 32:54
  SPEAKER_00: And so Hyundai probably felt there was no need to advertise at all.
• 32:58
  SPEAKER_00: And um uh traded it in for a Chevy Equinox EV.
• 33:03
  SPEAKER_00: And um what I've noticed is both cars are now getting significant amounts of advertising uh on the visual media that I'm taking in, um whether it's uh broadcast uh television or streaming uh content and uh streaming sources.
• 33:21
  SPEAKER_00: So um I I understand exactly what you're saying, uh but my personal experience is the they are automakers are stepping up the advertising for each.
• 33:31
  Rick Ducey: Yeah, I mean I guess even the world's first trillionaire at one point said we're never gonna advertise Tesla.
• 33:38
  Rick Ducey: Um but I I think they did pick up some advertising.
• 33:40
  SPEAKER_00: So I think I've seen some Tesla advertising here and there, yes.
• 33:43
  Rick Ducey: That's great.
• 33:44
  Rick Ducey: All right.
• 33:45
  Rick Ducey: Well, Roger, thank you so much.
• 33:46
  Rick Ducey: We'll let you go.
• 33:46
  Rick Ducey: Um thank you for staying with us a bit longer than usual.
• 33:49
  Rick Ducey: Super interesting content.
• 33:51
  Rick Ducey: And for everyone listening um and watching us today, thank you for joining us.
• 33:55
  Rick Ducey: We appreciate your time and hopefully we provided some interesting content for you.
• 33:59
  Rick Ducey: Engaging.
• 34:00
  Rick Ducey: We'll try to personalize it and follow up with you individually.
• 34:02
  Rick Ducey: Um uh we shall see about that.
• 34:04
  Rick Ducey: Uh, but don't hesitate to reach out to um BIA uh uh and we'll follow up.
• 34:10
  Rick Ducey: If you want to get a hold of Roger, you can um go to Roger directly or you know reach out through us and we'll we'll um get back to you.
• 34:17
  Rick Ducey: Uh any questions or suggestions for us, you could uh please send an email to podcast at BIA.com and we'll respond back today back to you and see how we can take care of you best.
• 34:28
  Rick Ducey: We look forward to bringing you more thoughtful conversations on local media throughout the year ahead.
• 34:33
  Rick Ducey: Roger, again, thank you.
• 34:34
  Rick Ducey: Thank you, everybody.
• 34:35
  Rick Ducey: Have a great day.