ENGINE continued its award-winning streak for its work on the HBO “The Sopranos – Nicknames” campaign by taking home two Social Buzz Awards 2019, presented by The Drum. The international competition celebrates the most effective social media strategies over the past year.
PUTTING THE BRAKES ON CONNECTED CAR SALES
A connected car is a vehicle that is equipped with internet connectivity and, in most cases, a WLAN. This enables the car to access data, send data, download software, communicate with other Internet of Things (IoT) devices, and provide WiFi for onboard passengers.
In 2019, connected cars are already a $20 billion industry, with seven billion of that total originating in the United States. Three-quarters of all new passenger cars sold globally in 2019 included connected services. And connected car functionality is the central building block of the self-driving car—an auto industry future many have already placed heavy bets on being what will drive growth.
Yet, it may be time to briefly slow down on connected cars. A recent “Connected Car” survey of 2,007 intended car buyers, conducted by ENGINE’s specialist automotive sector team, suggests that while the connected car bubble is not about to burst, it certainly has a leak.
Being Connected Means Being Valuable
A typical connected car sends 25 gigabytes of data to the cloud during every hour of use. This information includes the way the car’s driven, the infotainment services accessed, the places the driver goes, the ways they get there, and more. The data represents each driver’s digital footprint and it’s something that consumers care a lot about. In fact, more than half of consumers are concerned about the potential misuse of that data, while only a minority are sanguine enough to see it as the simple consequence of being online, and a necessary bi-product of the connected experiences they want to have as they drive.
There are differences between the generations in this regard, but the pattern is the same. About 40% of Millennials see the data stream left behind in a connected car as an unavoidable consequence of the experience, while only 30% of Boomers have the same attitude. Whether Boomer or Millennial, however, the majority have concerns about the ways in which companies handle their connected car personal data.
Expectations are High
While every generation has high expectations of the companies that access their data, Millennials are more lenient than Boomers. Even so, the generations are united in believing that companies have a moral obligation to protect the digital footprints they leave behind when they use their connected cars. A great majority expect companies to ask permission before collecting each piece of data, as well as to never share their personal data without their express permission or, if they do, to first encrypt and anonymize it.
And the fact that consumers click “Accept” without thinking when a pop-up interrupts our browsing experience, and in doing so provides all the permissions legally required, doesn’t change their sentiment.
Two reasons for concern, despite the numbers
With year on year growth at 16.8%, and a growth of almost 49% forecasted over the next four years, many argue that consumer concerns about data security will not stop consumers from buying new cars with connected services. However, there are two strong reasons to take a different view:
1) The epidemic of data breaches
The number of cyber security breaches in 2019 continues to grow, with at least 5.3 billion records having been exposed so far this year, according to SelfKey. In July 2019, a breach at Capital One saw the leak of sensitive information belonging to 100 million Americans and six million Canadians. The credit card numbers, bank account details and health records of 11.9 million Quest Diagnostics customers were hacked in June this year, while on October 25th , 7-Eleven’s fuel app was taken offline when customers reported that they were able to see the accounts and personal details of other users.
Given this context, it’s no surprise that two-thirds of potential new car buyers are extremely concerned to understand how the companies whose services they use handle their data and personal information. And given the ever-present role of technology in their lives, it’s no surprise that the most concerned group is Millennials—the demographic that long-term auto sector growth depends on.
2) Trust is hard to come by
The antidote to escalating consumer data security concerns is brand trust. When consumers trust brands, security concerns fade into the background. The problem is that currently, not a single auto, IT, cell phone, or rideshare company enjoys a net positive level of trust from any segment of the US car-buying public.
Even the best-rated auto brands (Toyota and Honda) only have net positive security trust ratings of 20%. And, surprisingly, those low levels beat who many would regard as the natural partners to ensure top-quality cybersecurity—the IT industry. Microsoft has a net positive of 17%, Apple 15%, and IBM and Intel just eight percent. Of cell phone providers, Verizon is best placed at 11%, while Sprint is in the negative.
The challenge for auto brands is not uniform, so while Toyota and Honda lead the way with very modest net positive trust scores, they lead a long trail of auto brands with serious work to do. Perhaps the most surprising is Tesla. Tesla vehicles are among the most technologically sophisticated on the market. Connected services are at the heart of their value proposition, and yet they have a net positive trust score of just three percent for the ways in which they handle the data their vehicles generate.
The Time to Act is Now
The skeptic might argue that, even with low trust, sales continue to grow, giving little urgency in addressing the problem. But that argument will not stand as data security concerns grow and impact future car buying behavior. Overall, a fifth of would-be connected car buyers stated that their data management concerns would stop them from buying a car with connected services in the future. If that happened in the current US market, there would have been 3.5 million fewer units sold in 2019. Even spread across all the models on the market, that adds up to a lot of auto industry pain.
The time to act is now. Futureproof your Connected Car growth by partnering with ENGINE to identify the best ways to build consumer trust. Learn more at https://enginegroup.com/us
With all the trends impacting the investing industry, it is important to note that there are key factors at play – all intersecting and engaging with one another to move the industry ahead and define what tomorrow’s investment experience will look like.
It was a winning night as ENGINE took home three 2019 Clio Entertainment Awards, including a GOLD, for its work on HBO’s “The Sopranos – Nicknames” campaign! ENGINE’s Chief Creative Officer Will Gelner and Creative Director Ashley Tyra picked up the awards at a ceremony held on November 21st at the Dolby Theatre in Hollywood, CA. The awards celebrate and recognize creativity in the entertainment business.