By Parvez Mulla, Senior, Director Product & Technology, CDK Global
As many of you have heard this term frequently that data is the new oil, however getting an understanding of how to monetize the data has become a critical area.
Data monetization is the process of using data to increase revenue. Many organizations have started to transform their business model to adopt data monetization strategies and make it an important part of their strategy. Data is a central resource in the 21st century. Only those who manage to extract value from their data will remain competitive. For this reason, many organizations are looking at innovative ways of using their data to create.
Direct data monetization involves selling direct access to your data to third parties or downstream vendors who can further develop, enrich the data, however many organizations see higher value and revenue in providing analytical data, embedded analytics, data insights that provide a higher revenue and return, while you benefit from offering this as a value add-on or as a new tier of service, encouraging customer loyalty. In turn, you get a better insight into how your customers are using your products.
Data monetization strategies crafting requires a greater insight into the personas who could be possible consumers of the data, and have a better understanding of the high-impact areas that will yield the right revenue. Identifying the right strategies that are specific, competitive, and solve a real business use case problem is critical. The value of data can grow in many more ways than can be visualized today, hence what is critical is driving the initial well-drafted strategy, execution plan, and being early adopters to capture the market share
Industry experts and automobile OEMs predict the overall revenue pool from car data monetization at a global scale might add up to USD 450 – 750 billion by 2030. The opportunity for industry players hinges on their ability to 1) quickly build and test car data-driven products and services focused on appealing customer propositions and 2) develop new business models built on technological innovation, advanced capabilities, and partnerships that push the current boundaries of the automotive industry.
Emerging nations are also exploring and predicting a high usage of the autonomous and electrical car in the next 10+ years that will further enable the car data-driven products for further adoption, thereby driving the software product organizations to consider developing applications that help improve customer experience, transform the car into a platform from which drivers and passengers can use their transit time for personal activities, which could include the use of novel forms of media and services.
Use cases that help with automobile data monetization:
• Customer experience while using the car
• Making mobility safer or more convenient.
• Seamless integration of the Auto Alerts and Notification from the car platform
• Environment, safety and road condition real-time maps, advanced car adaptation, live reports on road conditions, making mobility safer or convenient
• Driving-related or systems data: vehicle diagnostics, emergency calls, predictive and remote maintenance, service appointments
• Driver behaviour: personalized insurance plans, automatic road payments, reduced engineering costs, personalized product offerings
• Personal preferences: customized vehicle settings, e-commerce, personalized ads
• Communication form within the car: voice control, voice-enabled functions, virtual assistants
The personas who would benefit from these use cases could range from car customers, car service and collision service centers, OEM’s, car dealers, used car sales dealers, the list is endless.
With an increasing interest in shared mobility and advanced vehicle autonomy, the amount of data connected cars produce will have a high ability of consumption. The question is, who can use this car-generated data and how? Also, should automotive market players even bother looking into vehicle data monetization now or plan this in the next 10 years once shared mobility is more common?
The answer to when do you start working on automobile data monetization is NOW, to capture the market share and be early leaders in the automobile data mobility space.
Connected vehicles produce massive amounts of information via in-car microphones, cameras, and sensors. Not only do these IoT devices provide valuable insight into the driver’s behaviour and preferences, but they also observe passengers and bystanders. This allows for collecting a lot of non-critical data along the way.
While there are multiple use cases, however, the critical factors to launching a solid data monetization strategy include:
• Identifying the right personas for the use case, focus on the customer, and ensure you have all the legal rights for using the data.
• Defining the strategy for data acquisition and having the right infrastructure and Data Ops process to ingest huge volumes of data, maintain over years and ability to provide this data for consumption, focus on data quality.
• The data scenario and use case might seem valid and interesting, but validating if the insights from the data are relevant and validated
• Data monetizing strategy is validated for Monetization with a user group before launching the idea, ensure interoperability and scalability of the data,
• Pricing the data that drives adoption and ensuring the use case works across brands of OEMs as supporting limited brands could not provide the adequate revenues projected. Focus on quantity by enhancing your integration channels.
The new regulations like GDPR, CCPA, Biometric Laws, Child Privacy Rights, Data Privacy, and increased cybersecurity could prompt OEMs to validate their approaches to vehicle data and make this information more widely available within their ecosystems. OEM’s will start planning on partnering with software product organizations capitalizing on data monetization opportunities so they can remain focused in the automotive engineering space and leverage the industry partner ecosystem in assisting with monetizing the data securely and add value. Blockchain’s decentralization and powerful cryptography offer one of the most effective solutions to the challenges of vehicle data cybersecurity.
Automobile data monetization will be a huge industry in the future and will drive some regulations and standardization in the next few years that will require OEMs to define their make-versus-buy strategies and identify the truly differentiating key control points, as well as determine where they can compete and how they can partner with software product organizations and build on the use cases further since many of the auto customers are familiar with tech players and their offerings, the use cases emerging from the automobile domain are immense and requires a whole ecosystem to support the car data use cases.