Local Ads Hit Moving Target: The Connected Car

Coming to the newest small screen: ads delivered to the Internet-connected car. Advertising can already reach drivers via their mobile phones, of course, but combining them with GPS, whether on navigation devices or installed services such as GM’s OnStar, promises to add extra horsepower.

Full-featured installed screens are appearing on a wider variety of auto models, along with increased connectivity. ABI Research estimates that by the end of 2010, there will be 232 million navigation devices in use around the world, including in-dashboard or portable navigation devices, as well as smartphones connecting to in-car systems; the research firm expects that number to grow to more than 600 million by 2015.

On dashboard screens, which can be as large as 10 inches, drivers can get turn-by-turn directions combined with a 3D map of the route that includes points of interest along the way. In-car advertising could deliver for advertisers the same way Web search does, by putting ads in front of people who are actively looking.

To date, the only company dynamically serving ads to cars and GPS devices is Navteq, a wholly owned subsidiary of Nokia. Navteq’s LocationPoint ad-serving platform launched 18 months ago.

“We can pinpoint where consumers are and deliver ads and calls to action within a few feet of advertised points of purchase,” says Chris Rothey, VP of Navteq Media Solutions. Drivers can click-to-map and click-to-navigate to the location. A month-long trial in the United States for Chili’s Grill & Bar saw a peak click through rate of 2.49 percent; a recent European trial with McDonalds resulted in a 7 percent CTR and a 39 percent conversion to click-to-map.

Search front-runner Google seems to be putting together some pieces that could extend its dominance to the car. Google already provides local search for BMW’s ConnectedDrive. In June, it made a deal with OnStar to enhance the latter’s Turn-by-Turn Navigation Service; the two companies also are working on mapping and navigation services for the upcoming Chevy Volt electric car.

AOL-owned MapQuest is another player that’s connecting the dots to in-car ads. Geo-targeted ads and sponsorships already appear on the website and on MapQuest 4Mobile, with Best Western and Holiday Inn participating. Its recent website revamp will let MapQuest begin to surface content from other AOL properties, including Patch, the new hyper-local news effort, as well as Citysearch, City’s Best and AOL Seed. This same content could enrich on-the-go navigation.

Says Christian Dwyer, SVP and general manager, “If you search on MapQuest for a restaurant in Maplewood, N.J., we can link to more from Patch to show you all the specific, unique details about the location that have been captured by the Patch team. It’s unique content, very accurate and representative of the location. Over time, we can add ratings, reviews and other interesting information.

At this point, MapQuest ad sales are handled by the AOL sales team, which works only with large advertisers. “In the future, I see us focusing on a small or local business center to have a direct relationship with them,” Dwyer says. “We think the Patch program is probably a foundation by which we’ll build that capability.”

For any in-car advertising effort, moving beyond national chains remains a challenge.

“The goal with location-based services is not only to get so local that the recipient of the ad feels like offers are very relevant. You also need to get hyper-local on the merchant side,” Rothey says. “There are many local merchants that over time will find this to be a very useful outlet for them.”

To reach that goal, the first thing necessary is audience scale. After that is a way to line up local merchants, an issue that online search still struggles with. Given the breadth of this problem, self-service is the way to go, as Google has demonstrated.

The Google Places initiative could solve this problem. Formerly the Local Business Center, it lets companies go online to provide additional information to their standard listings, including defining the service area and paying for an enhanced locator on Google Maps.

Combine this with Google Places’ ability to let merchants deliver coupons, and you’d have a Holy Grail of location-based services: the ability to deliver a coupon to a consumer en route to your store — or to a competitor’s.

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