Today’s cautionary headline is in direct opposition to some of the stories you may have read last week in many radio trade publications. Not surprisingly, the epicenter of the conversation is about radio and automotive. The broadcast radio industry's dependence on in-car listening has grown in recent years, due in large part to the disappearance of AM/FM radio at home and in workplaces. And then there's the sales piece because automotive continues to be radio's leading revenue category, whether your station is in Oklahoma City or New York City.
So it's critical that everyone in radio, from its industry leaders to mom and pop owner/operators in small towns have a strong grasp of the changing automotive space, and what it means to radio. That's why it struck me as strange last week when I read some misleading and misguided information from two well-respected research organizations – Nielsen and Mark Ramsey – who may be letting the data or their opinions color what’s truly happening out there in the dashboard landscape.
It started with the release of Nielsen’s 2016 AutoTECHCAST Report Lite – a series of highlights from their AutoTECHCAST study that delves into consumer interest in auto technologies here in the States. In reading coverage of the study, most headlines centered around the idea that safety is ahead of connectivity as a consumer priority in their cars. And the other trade takeaway is that consumers are still baffled by connected cars; the implication being this technology is still very early and hasn't really caught on.
To that point, Nielsen tested 44 different technologies, and the average base awareness level is just 25%. But part of the reason for that is that most people don’t spend time lurking around new car showrooms like they do in Costco, Target, and Best Buy. In fact, the average age of a vehicle on the road in the U.S. is 11 ½ years. That means there are a lot of 2002 Saturns and 1998 Celicas on American’s highways. But as these vehicles die and need to be replaced, consumers will make their way into dealerships.
And what will they confront there? Connected cars. That's because virtually every vehicle rolling off the assembly line in the U.S., Germany, Japan, and Korea is now connected in some way. So does awareness truly matter at this point if this technology becomes as common as power windows?
Nielsen’s conclusion? “Given the relatively low awareness, interest in connected cars isn’t significant – but it is up from a year ago.” Really?
The problem is that many broadcasters reading trade coverage of this study might conclude that because most consumers know doodly-squat about connected cars, it's OK to keep focused on translators and programmatic buying because connected cars are not a big deal to most Americans. That would be a huge mistake.
Nielsen also concludes that it’s a “Safety First,” situation, noting that while connectivity gets a lot of buzz, safety is a top priority. But when you look at their own chart, connectivity ties safety at 41% for each. (Yes, you round up 40.6% for connectivity and round down 41.3% for safety.) It’s interesting how they (incorrectly) point out that “safety ranks more than a full point above connectivity.” Even without rounding, that's not true.
Then there’s the finding – true, but misleading – that built-in tech trumps brought-in content, like through a phone. In fact, Nielsen notes that two-thirds (67%) are interested in integrated technology, while only a third (33%) prefer brought-in content.
But nowhere in the report is it apparent that Nielsen considered Apple CarPlay and Android Auto, the two biggest developments in dashboard technology since the creation of GM's OnStar and Ford SYNC. We know from our own Techsurveys that awareness of these integrated dashboard systems from Apple and Google aren’t on too many new car buyers’ wish lists. But they’re coming. And they’re coming fast. More than 100 models will feature these “brought-in” systems starting this fall, and that number is sure to rise. The carmakers are already beginning to market these dashboard platforms.
At the 2015 DASH Conference, J.D. Powers' Dave Sargent made the point that consumers – especially younger ones – are more loyal to their brand of smartphone than they are to the make and model of their cars. Given the opportunity to simply plug in their iPhone or Galaxy Note and access the content they carry around all day and sleep with at night, they will embrace it.
And that's a key factor that somehow escaped the Nielsen report, and yet promises to play a role in the automotive/media conversation for years to come.
And then Mark Ramsey chimed in with a blog post provocatively titled “Why Connected Cars Don’t Matter.” His point is that consumers are thinking inward – they care about themselves and their own online content. He notes that it IS about smartphones, which completely overshadow the content drivers may get from dashboards.
But while it is overwhelmingly true the content on a consumer's mobile phone is personal and the center of her universe, it's also true that listening to “embedded content” in cars – that is, AM/FM radio – remains by far the top source of music and entertainment, even in connected cars. The concern – and it is very real – is that dashboard technology is already altering the hierarchy because of the deluge of options being offered by automakers.
At least Mark mentions the Apple and Google systems – because they rely on a consumer’s smartphone – but he then dismisses all the technology with advice that it’s truly about creating content worth listening to. In his message to focus on content and mobile, Mark is on the money. Of course, content matters and is of paramount importance to any discussion about media, devices, and platforms.
But to ignore dashboard technology or to hope that consumers will simply love your content so much they’ll work harder to find it when they’re using Apple CarPlay or Android Auto is naïve. If you take the time to drive a vehicle with one of these systems (and I strongly recommend you do), you’ll quickly learn that radio simply becomes harder to access when you simply can’t see it on the touchscreen. Even the best content will remain in the background if it's buried behind a dashboard ecosystem that mirrors the apps on a consumer's smartphone.
That's why our mobile app development company, jācapps, has worked so hard over the last year to create radio apps that are visible on both these tech systems. Do you still have to produce great content to be relevant on both Apple and Android in-car platforms? Of course. But you also have to understand and adapt to this technology, as NPR, iHeartRadio, and now jācapps have done in order to stay front and center in both Apple CarPlay and Android Auto.
But don't take it from me…or Nielsen or Mark. Go right to the experts who both understand automotive technology and also have a sense for what it means to those of us in the media and entertainment business. That's why we've co-partnered on three DASH conferences in 2012-14 – to help educate radio broadcasters about the automotive challenges and opportunities ahead. Industry expert and consultant John Ellis offered a great explanation of what's really happening in our DASH Podcast, produced by our Seth Resler. You can listen to it here.
Here's John's bottom line response to Mark's assertion (beginning at the 21:40 mark):
“Should radio broadcasters be concerned? Absolutely.”
There's no question that Nielsen data and their well-designed reports about consumer habits have been additive to radio's marketing efforts. They often reveal new information that support the industry's efforts to maintain a position of relevance in the advertising world. And Mark Ramsey is a brilliant, incisive analyst whose role as an agent provocateur is well known and highly respected.
But the last thing the radio industry needs to do is go back to sleep when it comes to connected cars. If anything, now’s the time to be even more engaged in your content and mobile strategy, and to also commit yourselves to learning as much as you can about the technology and what it means to radio. And then it's about supporting industry initiatives that foster greater communications with automakers and their suppliers.
For decades, the radio industry has taken the car for granted. But no more. Anyone who analyzes both industries closely will conclude there's much to be concerned about.
In other words, keep worrying.
I'll be appearing on a panel at the NAB Radio Show in Nashville next month – “The Digital Dash – Improving The Consumer Experience” – with Ford's Scott Burnell, moderated by the NAB's Sam Matheny.
Understanding the Connected Car Webinar
Fred Jacobs recently hosted a webinar called “Understanding the Connected Car: An Introduction for Radio Broadcasters.”