The Future of Car Travel: Advertising & Retail?
It’s no secret that the future of auto transportation is widely believed to be subscription-based, fleet-owned ridesharing. Traditional car manufacturers have relented in their hope for continued individual ownership in recent years, investing billions of dollars in ridesharing, alternative ownership, and AV technology companies.
As individual vehicle ownership declines, the context of traveling in a car changes dramatically, enabling new experiences and behaviors. When owned or leased, we fully control the atmosphere and experience of our cars — often have some level of pride over the make/ model/cleanliness. We choose what media we consume during travel — whether AM/FM radio, podcasts, Spotify, or satellite radio. Today, companies like Wrapify and Carvertise allow car owners to earn $100-$450 per month by turning their vehicles into moving billboards. Despite this significant financial opportunity (most Americans don’t have $1,000 in emergency savings), adoption of these services is extremely low — frankly because it’s embarrassing to publicly drive a vehicle shilling for pharmaceutical companies, and detracts from our pride of ownership.
Once we no longer own the vehicles we travel in, however, the companies that do will look to additional monetization channels to extract value from their captive audience. Captivity (in addition to reaching) is the reason the radio advertising market is still an $18 billion industry, compared to podcasts’ paltry $314 million in annual advertising revenue. So, how does the passenger experience differ in the future of operated fleets?
We can look at other modes of transportation for some clues. Public transportation — buses and subways — feature gratuitous print advertisements targeted broadly at the masses. Airlines provide video screens and entertainment options for their captive audiences. Both of these will be featured in the future of car travel, likely with their own twists. Unlike public transportation, ridesharing and fleet travel is individualized with data on each passenger. This allows the personalization of experiences and advertisements for a captive audience — something not available to radio and public transportation advertisers to date. Ridebill, Grabb-It, and Adway are already equipping rideshare vehicles with different forms of advertising. With additional customer and location data, advertisers can deliver hyper-local and relevant ads. Are you an 18– 35-year-old gym-going male with a grocery store as your final destination? Here’s a coupon for a new protein bar! With this context, one can imagine why Google (the world’s largest ad platform) is investing so heavily in Waymo — especially as it loses ad-market share to Amazon.
While the vast majority of car travel is shorter in duration than air travel, video screens with entertainment options will become just as pervasive, offering shorter form content sponsored by brands targeting you specifically. Portl Media and Vugo are already rolling out video screens to rideshare drivers who share in the ad revenue from these platforms. At scale, this video network (~2 million+ screens) becomes an entirely new and valuable distribution channel for over-the-top networks like Philo and Cheddar. These entertainment consoles will eventually incorporate interaction and feedback, as companies such as Perksy look to provide valuable consumer feedback for brands from millennial and Gen-Z audiences. Riders could earn “points” or “ride credits” for answering short surveys during their rides. “How likely are you to purchase a vegan subscription meal service?” Joyride Trivia, a trivia game iPhone app, already integrates with Uber to entertain passengers during their ride. This is an easy use-case for in-car video screens.
It’s also easy to imagine a future in which our subscription car services have two tiers: ad-supported and ad-free. Riders looking to save money could choose to be exposed to video/audio ads during their travel, reminiscent of the dystopian “Ad-Buddy” from Netflix’s Maniac. Perhaps brands will “takeover” select vehicles to create “experiences” for a lucky few passengers, who in turn share on their social channels, promoting the brand organically. Picture “the museum of ice cream” in a car, sponsored by Halo Top.
Another interesting opportunity in the future of car travel is retail: riders already have payment-connected accounts, and cars have plenty of space to store small, frequently purchased snacks & goods. Cargo is already luring riders to purchase snacks, beverages, and small retail items during their rides. I expect in-car sales to increase, especially with items typically found in convenience stores — small in size but frequently purchased. Data from these purchases will allow companies to increasingly target retail items and advertisements to specific individuals, locations, and ride times. If consumer gas (and charging) stations are non-existent in the corporate fleet future, the car itself may become the smart convenience store for riders to purchase what they previously stopped at 7/11 for.
Taking this one step further — imagine a future in which you can pre-order everyday items to be available in your next ride. If you’re running out of toothpaste, add it to your Uber shopping list and pick it up during your regularly scheduled ride to work tomorrow morning. For its part, Amazon will undoubtedly utilize AV fleets for last-mile delivery, and could conceivably operate its own fleet of “Amazon Go-esque” vehicles stocked with the most commonly purchased items that riders can grab-and-go.
At a high level, an interesting part of the future of car travel is the ability to merge the digital and analog. As commerce and advertising has shifted to digital channels, out-of-home advertising (OOH) has suffered from a lack of ROI measurement, while brick-and-mortar retail is disconnected from digital advertising. At the same time, consumers increasingly expect online orders to be delivered ASAP. With hyper-personalized OOH advertising displayed directly to captive passengers with relevant inventory stocked, it’s not difficult to imagine a significant portion of advertising and retail sales eventually occurring during your evening commute.
So, what would you like to purchase during your next ride?
If you enjoyed this, please check out some of my other articles: The Cameras are Coming, Who are you?, and I deleted every app from my phone for 30 days. Here’s what happened.
I’m currently an investor at Sinai Ventures in San Francisco. Previously digital TV strategy at 21st Century Fox in Los Angeles. Northwestern Alum. Chicago Native. Feel free to reach out here, on LinkedIn, or Twitter.