BMW says cars will not be an ad-fest, industry cogs suggests otherwise

BMW’s head of digital products and services, Dieter May, said that the company “is not in the business of selling data and so we need to be really careful,” speaking at Dmexco. The declaration was made in a conversation about customer data collection, and indicates that BMW won’t be looking to sell endless streams of customer data to advertisers, because this approach risks spoiling the automaker’s relationship with its customers – who are likely already fed up with intrusive advertising practices in the digital age.

May did recognize that there are real partner opportunities with companies that align with BMW’s premium brand, and given spending power of a typical BMW customer, it would be foolish to turn its back on all potential connected car partners that are looking to get a slice of that disposable income. But May highlighted the concept of a pop-up coffee shop voucher in a BMW 7 Series’ IVI as not fitting with the brand experience of the car, and therefore unlikely.

The connected car presents a massive opportunity for advertisers, even if the advertising then doesn’t take place inside the vehicle itself. The car is sold to the customer and then data is taken from what the driver listens to, where they live, where they work, how long they commute, which can then be sold either as an advertising profile or to ad-networks as aggregate data.

From the statements made by May, it is clear that BMW is not totally ruling out the concept of in car advertising – just that it doesn’t want its vehicles to be a spam-fest of products they think its drivers won’t want.

BMW’s major partner for integrating digital capabilities in the connected car is Microsoft. The Cortana personal assistant will be the interface through which the driver will interact with the vehicle’s connected services – and attempt to optimize the experience in accordance with their expectations.

May gave the example, that if you were buying certain products the car could suggest the easiest way to get them. However, these suggestions are going to have to fit in with BMW’s premium brand experience, and so drivers could face the issue of being directed to the most ad-friendly shops (and not necessarily the place with the best deals).

The ability to carry out over the air (OTA) updates will enable automakers to refine or change the car’s advertising practices at any point in its life cycle. Consequently, customers have no guarantee that the current position of BMW or any brand they purchase will be retained throughout the life of the car. However, the OTA updates will also increase the likely lifetime of a vehicle, as the OEM refines and tweaks the vehicle’s software to improve performance.

By 2022 there will be an estimated 380m connected vehicle on the roads. It’s likely that each automaker will take a different approach on the connected car strategy, in relation to advertising and other potential services. The collection of advertising data in the style of Google or Facebook will likely take place in some vehicles, and could be used as a differentiation opportunity.

Delphi, one of the largest automotive suppliers in the world, recognized the trend in 2015, and acquired Control-Tec (a data analytics company) and OTA update specialist Movimento in 2017. The two purchases were a clear indication that automakers are demanding these type of products from supply partners like Delphi.

US consumer advocacy groups (the American Automobile Association, in this case, but also organizations like the BBB and Consumer Watchdog) have already called on automakers to ensure private data will not be sold to advertising agencies. This was met with the response of Ford, GM, Mercedes, Toyota and several other signing an agreement to adopt auto industry privacy guidelines in 2014.

However, the guidelines only stipulate that the automaker has to give clear notice of data collection to vehicle owners and that the data can only be stored for a limited period of time – which caused some to call the proposal only a limited step in consumer data protection.

On the software side of things, Adobe has unveiled an extension of its Experience Cloud service that helps automakers and app developers analyze data streamed from vehicles to ensure advertising is correctly personalized. Adobe says the platform uses machine-learning techniques to interpret voice commands and other preference setting functions, to help with targeted advertising for any automakers. It suggests a concerning trend of the voice assistant listening to the conversations of those within the car continuously, and then using that information for targeted ads – instead of simply to provide a better assistance service.

Indication from the pro big business Trump administration suggest that there is unlikely to be any new legislation increasing data protection for consumers. However, extensive changes to data protection legislation in Europe come into force in 2018, and will mean automakers have to get consumers to agree to exactly how their data will be used – although most will still sign away these rights that are hidden in complex terms and conditions agreements.