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Here's How Advertising Companies Will Capitalize on Driverless Cars

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【Summary】Waymo will play an important role in Google’s quest to expand digital advertising to driverless cars. The business is sitting on a $1.2 trillion opportunity, according to UBS researchers, in the form of robo-taxi services.

Michael Cheng    May 24, 2018 11:26 AM PT
Here's How Advertising Companies Will Capitalize on Driverless Cars
author: Michael Cheng   

There are several ways companies plan to profit from self-driving cars, including in-car advertising. Like digital ads served on websites, banners and animated clips could be making their way to driverless vehicles in the future.

Google (via Waymo), the king of online advertising, is expected to serve ads to passengers riding in its autonomous cars. How will Google's monetization efforts affect people's experiences inside self-driving vehicles? Find out below.

Serving Ads in Autonomous Vehicles

Waymo will play an important role in Google's quest to expand digital advertising to driverless cars. The business is sitting on a $1.2 trillion opportunity, according to UBS researchers, in the form of robo-taxi services. Competition in the emerging sector is currently fierce, with Uber and Lyft also fighting for dominance.

Interestingly, UBS views traditional automakers to have the advantage in the robo-taxi sector. Car manufacturers mentioned by the investment banking and financial services firm include GM and Daimler. Such businesses already have access to large, automotive fleets, allowing them to scale faster than startups.

Next to robo-taxi services, in-car monetization ranks second in the list of largest opportunities in the autonomous driving industry.

With decades of success in serving digital ads, Google is forecasted to dominate the in-car advertising space. UBS researchers believe the tech giant could capture more than 60 percent of the market in the future.

"Revenue from Google's advertising business, which includes ads shown on Google search and commercials running before YouTube videos, increased 24 percent during the quarter," said Daisuke Wakabayashi from The New York Times.

"Over all, Alphabet said its net income rose 73 percent, to $9.4 billion, from the same period a year earlier, boosted in part by an increase in the value of its outside investments."

Such projections are fueled by Google's existing automotive products and projects. Android Auto, the company's flagship in-car platform, is readily available in a wide range of vehicles, including Nissan, Ford, Audi and Volkswagen. The establishment currently has access to millions of cars, that one day will be upgraded with driverless features.

Redefining the Passenger Experience

The impact of digital advertising on autonomous vehicles could be huge. According to UBS analysts, revenue from driverless cars located in the US is expected to reach roughly $2.3 trillion by 2030. Moreover, around 70 percent of the estimated figure will likely come from services or products designed to enhance the driverless experience.

With increased idle time of passengers inside self-driving vehicles, there is a gap that must be filled to tie the whole experience together. This is why concept cars that incorporate driverless tech are moving away from traditional seating configurations.

Some automakers have released concepts with bench seating, as well as cabins that resemble living rooms. Such changes suggest passengers will be interacting more with each other and with various connected devices.  

"Not only do we see passengers consuming content ranging from movies and television programming," explained Brian Krzanich, CEO of Intel.  

"We imagine riders enjoying immersive experiences never seen before, courtesy of in-cabin virtual reality and augmented reality innovations."

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