Riding Shotgun in Consumers’ Cars, Apple Could Close the Loop

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Earlier this week, General Motors announced plans to integrate iOS devices into its on-dash infotainment system, bringing Apple’s virtual assistant Siri to a handful of its smaller vehicles early next year. We talk a lot about the pedestrian experience when we consider hyperlocal’s impact in cities — but the car is the de facto local hub for much of America. Siri integration mixed with maps and a rumored radio product could provide Apple with the necessary footing to make a dent in local advertising and finally turn around its inert iAd network.

This thought came from a conversation I had recently with Richard Greenfield, a media analyst at the investment firm BTIG, who has been playing around with the idea of Apple’s potential car-dominance since rumors of an ad-supported streaming music service started to flow out of Cupertino in late summer. The rumors quickly solidified late last month, when news surfaced that Apple had been talking with major music labels to create an ad-supported streaming music service.

“Keep an eye on Siri getting into the car — all of a sudden utilizing promotions and interacting with advertising is voice based,” Greenfield told me in an interview. “To know that people listen to two hours of radio in the car a day, what better opportunity than to build out a radio product so you can make use of mapping, Passbook, Siri? It takes everything that the iPhone is capable of and builds it around something people do everyday — listen to music.”

Greenfield lays out a pretty compelling use case in his original blog post, envisioning a system in which Apple leverages maps data to serve up a coupon in iRadio, based on where you’re driving — and then allows you to store and redeem it via Passbook. And you can do all this without looking at your phone (thanks to Siri). It’s the type of closed-loop experience that is widely consider the holy grail of hyperlocal marketing and advertising in general. But here’s the thing about making it work: if you have to ask (for data), you’ll never have it.

Taking Mobile Beyond the Screen
From a mobile advertising perspective, part of what is so intriguing about radio, and particularly radio in-car, is the absence of the screen. It’s a reality of mobile that people can’t seem to get over: The screen is small, making engagement is weak. And yet, the mobile advertising community continues to build products around the device’s largest pitfall. With a well-designed in-car syncing service, the car becomes a module for the mobile device, allowing an advertiser to leverage the hyper-intelligence of the device without succumbing to the necessary evil of a four-inch display.

As Greenfield points out, Siri, and particularly the integration in the car, is the lynchpin in the whole operation. It allows the user to interact with the device entirely without the screen, opening the car — one of the last “single-media” environments” — to Apple and the massive advertising opportunities that come with digital interactivity laid over analogue-era engagement.

Closing the Loop and the iPhone as a Real-World Cookie
We talk a lot about the scale of data — and the opportunities surrounding “Big Data” analytics — but the problem facing mobile, (and the one Apple is well positioned to solve) is the exchange of information. It’s the links — systems like shipping lanes, the interstate system, and broadband internet connectivity — that tend to facilitate growth within a network. Like an inefficient engine that produces a lot of energy but little power, mobile advertising today creates tons of data that yields little value for the guy at the end of the line.

One of the big boons in online advertising was the introduction of cookie-based retargeting, which allowed advertisers to target based on the websites the user visited before arriving at the site. Its a data-sharing protocol for advertising. Nothing more. The mobile advertising ecosystem, and in particular local, is in desperate need of a corollary system. The pieces are in place to close the local purchase loop — we’ve digitized customer acquisition, payment/transaction, and retention — but there’s no rope between the rungs.

But in the end, the only company that can solve an ecosystem problem is the one who owns it. The iRadio use case is just one small implementation of Apple’s growing power as gatekeeper of the iOS ecosystem. That power grows exponentially as iOS expands beyond the iPhone screen and begins to play gatekeeper to the so-called Internet of things. The car just happens to be a very expensive thing.

Steven Jacobs is deputy editor of Street Fight.