42% of car owners (those with a 2009 model or later, who are also in the market for a new vehicle), have heard of Connected Cars but don't really know what they do. Additionally, with cyber crimes and data breaches dominating the news, two-thirds (65%) of car owners say they fear owning a Connected Car could compromise their privacy. These are findings from the recently released 2014 Harris Poll AutoTECHCASTSM study, an annual study of consumer awareness and adoption of advanced and emerging automotive technologies.
What's a Vehicle Manufacturer to Do? A Case for Marketing
With Connected Car familiarity and understanding low and privacy concerns high, it makes sense that for 2014, only 15% of car owners say they are very/extremely interested in owning a Connected Car, while another 31% say they are not at all interested. Owners of three makes in the Luxury car segment show the most interest in owning a Connected Car: BMW (40%), Acura (37%) and Audi (34%).
"Given America's reverence for technology, and the fact 10 million Connected Vehicles were sold in 2013, representing more than half of all cars sold in the US, it is surprising so little is known about Connected Car technology," said Ian Beavis, Executive Vice President, Global Automotive, Nielsen. "These findings are a sobering report card on how much more groundwork must be laid before automakers can successfully monetize Connected Car services and ensure that Connected Car adoption keeps pace with development efforts. All of this uncertainty points to a need for original equipment manufacturers (OEMs) to shift their energies from solely engineering to marketing, where they can build awareness and educate consumers."
While overall awareness and familiarity with Connected Car technologies is low, familiarity and purchase interest with specific features is higher. For example, features already available on some cars such as Voice Activated Controls — voice commands that control vehicle systems — have a familiarity of 41%, although desire to install one in the next vehicle is only at 28%. Other, newer technologies such as Vehicle Mobile Applications — car apps, e.g. personal networking, Internet radio, movie/restaurant reservations, etc. — have an overall familiarity of 23% and next-vehicle interest at 17%.
If Connected Car technologies follow the path of other new technology introductions tracked in AutoTECHCAST over the last ten years, building awareness and familiarity can help drive adoption. Historically in the AutoTECHCAST study, as car owners better understand benefits, feature adoption follows. "The back-up camera is one example of this phenomenon; familiarity and interest have tripled in the last 10 years," added Beavis. "The question for automakers is, how to design, market and engage auto buyers in order to drive interest, while at the same time calming concerns over privacy issues."
The Data Plan Dilemma
Connected Car design is moving in multiple directions: built-in, where capabilities reside with the vehicle; brought-in, where car owners plug their Smartphones into the car to access phone apps and data plans, or some combination of both. According to the AutoTECHCAST findings, nearly two-thirds of car owners (65%) say they want built-in connectivity, compared to slightly more than one third (35%) who prefer brought-in connectivity using their smart phone. However, this poses a logistical issue, as more than half of car owners say they are less likely to buy a vehicle that uses a data plan/carrier different from their own, and 31% say they are "much less likely" to purchase the vehicle. Solving this vehicle/data plan puzzle is essential for OEMs to move forward with Connected Car design.
Moreover, less than 20% of car owners are willing to share aggregated data about their activities or agree to advertising in exchange for more or lower-cost data. One bright spot in the findings: younger vehicle owners are more open to both strategies.
Brand Awareness — The Opportunity
While only 14% of car owners say they know what a Connected Car is, 78% are aware of the Onstar brand and 33% are aware of Sync, awareness of other vehicle make systems remains relatively low. This suggests the job of educating the marketplace and branding the benefits of Connected Car features is far from complete.
For OEMs, Connected Cars represent a unique opportunity to develop a better understanding of their customers by gaining improved insight into consumer behavior in the vehicle. "Overall, the data shows a strong disconnect with current Connected Car strategies and consumer demand," said Beavis. "These systems add significant cost to a vehicle and many involve an ongoing monthly fee. Until there is a more compelling value proposition for the consumer, these strategies spell risk."
About 19% of U.S. adults will be shopping for a new car or truck this year. According to AudienceSCAN, this audience skews male (57.2%). At least 21% of these consumers say they also enjoy working with technology and gadgets in their leisure time, a number that is significantly higher than average and bodes well for connected-car marketers. In addition, 60% of new vehicle shoppers say they travel to work in their own car and truck. As a result, they might appreciate using more technology during their commute. Blogs have driven 26.5% of these consumers to start an online search in the past year. All of that time spent online may make these consumers good targets for digital ad campaigns.
AudienceSCAN data is available as part of a subscription to AdMall for Agencies. Media companies can access AudienceSCAN data through the Audience Intelligence Reports in AdMall.