A Marketer’s Guide To Autonomous Vehicles

A primer on the current landscape and a quick analysis of the brand opportunities that self-driving cars are set to bring

Image credit: iStock

On Tuesday, Cruise Automation, the autonomous driving unit of GM, announced it will start testing its self-driving cars with a fleet of Chevrolet Bolts on the streets of lower Manhattan early next year. This makes GM the first company to comply with New York State’s rather restrictive regulations (requiring at least two human passengers inside plus a police escort for each self-driving car) for sustained on-road testing of self-driving vehicles. In contrast, the State of California just amended its regulation last week to allow testing of autonomous vehicles without human drivers on roads. Nevertheless, Kyle Vogt, CEO of Cruise, said in a statement:

“New York City is one of the most densely populated places in the world and provides new opportunities to expose our software to unusual situations, which means we can improve our software at a much faster rate.”

Mad Dash for Data

The need for data collection from real-world scenarios gets to a crucial point in the development of the autonomous vehicles today — every major player in the mobility space is scrambling to get more data in order to train their self-driving software. And, for most automakers, the fastest and most efficient way to do so is through collaborations.

Whether it’s partnering with self-driving software vendors, like what BMW, Nissan, and Fiat Chrysler are doing with Intel-owned Mobileyes, or teaming up with ride-sharing services, like Ford is planning to do with Lyft, who also has a standing partnership with GM, all these auto brands share the same goal — to accumulate as much road and driving data as quickly as possible. Daimler, the German automotive conglomerate that owns Mercedes and many other auto brands, announced in February that it will tap into Uber’s immense network to develop its autonomous vehicles.

In addition to these partnerships with software providers, automakers are also selectively pooling their data together to gain a better understanding of traffic patterns — a crucial data point for developing autonomous vehicles. Already Audi, BMW, and Mercedes-Benz, all co-owners of mapping data and navigation service HERE, are pooling together live data on traffic jam from their connected cars to better access the road conditions and deliver a better driving experience. In a race against tech giants like Google and Apple, it is not hard to imagine data-sharing initiatives pop up between traditional automakers.

In a race against tech giants like Google and Apple, it is not hard to imagine data-sharing initiatives pop up between traditional automakers.

Beyond data-oriented partnerships, automakers are also working closely with chipmakers to make sure they get the computing power they need for their driverless cars. Toyota, Audi, and Volvo are among companies that are working with Nvidia, who just last week unveiled its latest supercomputer that is capable of powering fully automated driving. Tesla is reportedly working with AMD to make chips for its self-driving cars while Volkswagen is working with Qualcomm, whose new Cellular Vehicle-to-Everything reference design are backed by Ford and Audi to help autonomous vehicles better communicate sensor data for safety.

(partially based on this interactive graphic by Quartz)

Alliances like these are crucial to the development of autonomous vehicles, as they spread the burden of research costs and allow companies to share expertise. However, they also raise questions about who will benefit most from the resulting technological advances. As the driving experience itself becomes increasingly irrelevant to the car-buyers thanks to autonomous driving, the ride itself becomes the core experience that auto brands will want to focus on.

Ride Experience As Differentiator

Typically in such partnerships, auto brands have less leverage than the ride-sharing companies that own massive amount of traffic data, which the auto brands need to train the AIs powering their autonomous vehicles. Lyft, as with Uber and other ride-hailing companies, is a “level 2 aggregator”, which means it does not care which autonomous vehicles it ends up using, as long as they can provide a good-enough ride experience to keep the customers happy and, of course, reduce or even eliminate the cost associated with human drivers.

With that in mind, it is important that auto brands create differentiated ride experiences through either user-friendly design or in-car entertainment options, so as to avoid being demoted to undifferentiated hardware vendors, just as Windows PC manufacturers were in the last decade.

Auto brands need to create differentiated ride experiences so as to avoid being demoted to undifferentiated hardware vendors.

The development of self-driving cars is that will transform the transportation industry, therefore impacting every consumer’s daily life and presenting brands with a vast amount of marketing and media opportunities. Qualcomm, for example, recently launched Automotive Development Platform (ADP) based on its Snapdragon processor that promises to bring advanced entertainment and connectivity capabilities to cars. Building a next-gen in-car infotainment system is definitely something that all automakers need to be exploring via partnerships.

Beyond that, another way to do so is through partnerships with brands outside the auto industry.

Ride Differently Via Brand Partnerships

Lately, the marketing world is abuzz with partnerships between seemingly unrelated brands: Taco Bell teamed up with Forever21 to launch a fashion collection for fans while also partnered with Microsoft to set up Xbox game arcade in a cross-promotional effort. Johnnie Walker released a limited edition of ‘Blade Runner 2049’-inspired whiskey while Taiwanese airline EVA Air unveiled its Hello Kitty-themed plane and flight. All these partnerships may seem odd and mismatched at first, but looking deeper, it reveals a strategic solution for brands to either join forces to go after the same audience, or leverage a hot intellectual property to attract fans and raise awareness.

Previously, ride-hailing companies have tried their hands at similar partnerships with themed rides. Uber has had themed rides for Mad Max in Seattle and Star Wars-themed rides in NYC, while Lyft did one for Ghostbuster last summer. This year, however, such brand integrations are branching out into much broader categories. Lyft announced a partnership with Amtrak to provide train commuters with first- and last-mile tie-ins. It is also partnering with Budweiser to offer Prohibition-themed tour to promote Budweiser’s limited-edition beer. Uber struck a partnership with the Philadelphia 76ers to offer VIP rides to fans to the game.

Perhaps more telling is the “Taco Mode” that Lyft created with Taco Bell to allow late-night riders to make pre-orders and make a detour to the nearest Taco Bell location for pickup. Different from all previously branded ride campaigns, this one is interesting for it manages to integrate mobile ordering directly into the ride experiences, offering tacos as added value to the trip and allowing Taco Bells to convert passengers into customers with impulse-driving convenience and the incentives of free food giveaways. The campaign yielded modestly positive results, as the QSR chain saw an 8% increase in visitors on average during the 11 pm hour, according to data from PlaceIQ. While a limited-time affair, this partnership sets an example for future QSR/ride-hailing partnerships and could be tweaked for retailers as well.

Brands would be smart to seize the shift toward autonomous driving to reach audiences through either in-car infotainment system or branded ride experiences.

As aggregators, ride-hailing companies like Uber and Lyft have an inherent advantage over auto brands in the self-driving future because these services own the customer relationship and therefore have full control of the ride experience. Thinking ahead, auto brands would be wise to take a page out of this experience-oriented playbook and start making alliances outside the auto industry to deliver the best ride experience to car-owners and their passengers. For other brands, it would be smart to seize the shift toward autonomous driving to reach audiences through either in-car infotainment system or branded ride experiences.