The past few years have seen a lot of
excitement about monetizing data collected from connected cars, as the
potential value of this data was given astronomical forecasts and predictions.
BMW and GM jumped to the forefront by
creating programs to collect, analyze and monetize the data both with internal
use cases (warranty management, prognostics, etc.) and selling data insights to
external partners who are interested in how customers drive their cars, where
they’re going and what they’re doing while driving.
This rush to the “new oil” also saw several
organizations put themselves in a position to help make this an easier process,
especially when dealing with a third party. Put simply, these companies
leverage an ever-expanding set of data-hungry partners, working with OEMs to
normalize data, aggregate it into useful insights and, well, turn it into
money; essentially acting as the refinery for this metaphorical oil.
… and then Facebook and Cambridge Analytica
happened. Without revisiting this matter in detail, the main result impacting
the automotive industry came in the form of a sudden realization by consumers
that their data is being used, and in some cases abused.
This increased awareness and sensitivity
towards data sharing led many in the space to become more cautious. Behind the
scenes, the entire industry is now trying to strike a balance between
monetizing data without scaring consumers off. Generally speaking, we can see
two distinct approaches towards this moving into 2020:
If the data is
sufficiently anonymized, then – at least in theory – no harm can come to
consumers, and their privacy is not invaded. The main negative is a relatively
low ability to identify deeper consumer trends based on ethnographic analyses.
The main case study for this
is the smartphone and its apps; consumers have been willing to let go of a
slice of privacy and whole lot of data in exchange for the value that a
smartphone add. So the question becomes, what value can connected services add
to the vehicle ownership experience, and is this enough counterbalance for
vehicle owners and drivers to be swayed into sharing their data?
"Having worked with several OEMs on their
connected car and data utilization strategies, the key advice that is consistent in our data strategy workshops,
no matter the approach, is to put the customer first" says Mo Al-Bodour, Senior Connected Car Specialist at SBD Automotive. "Being transparent about
what data is being collected, how it is being used, what the customer is
getting in return, and allowing them to opt out of data collection (and making sure
they understand what they would be losing out on in return), is the backbone of
a strong data monetization strategy."
We are happy to see that the industry has
been listening, and that this view is shared by other
leading forces in the industry. The likes of GM and BMW now
have dedicated pages to transparently show where that data is going and why,
and Otonomo just published a whitepaper explaining its approach to data privacy that heavily supports our ideas of
transparency, honesty and simplicity.