Driving Sales Redefined By Growth of GPS Systems
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Written by Bradley S. Melara
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Monday, 09 March 2009 |
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Hot in-car devices provide marketers with in-your-face options.
CALL IT THE FOURTH SCREEN. There are the TV, computer and cell phone screens--and now there is the GPS screen. As the new must-have toy, GPS navigational system sales are among the fastest growing in the consumer electronics category. And now, marketers and manufacturers are creating new ways of using them to get consumers while they're on the go.
Dash Navigation's GPS devices, which will hit shelves this fall, will be the first to offer a wireless Internet connection. Yahoo! Local search has already signed on with Dash Express to help users search for nearby products, services or businesses.
"Forget the 'click-through model,' you can have the 'drive-to' model," said Robert Acker, svp-marketing at Dash Navigation, Mountain View, Calif. "[Ads] can deliver customers right into the parking lot. We can deliver timely, relevant information."
Acker is planning on offering sponsored searches, customized buttons as well as other advertising models. "It's just the beginnings of the future advertising models in this space."
Sales of GPS devices nearly quadrupled last year, per NPD Group, Port Washington, N.Y. The 900,000 units sold were a 255% increase over the year prior. Dollar volume surged 128% to $476 million.
This two-way communication opens the car door wide for marketers, said Ross Rubin, director of industry analysis at the NPD Group. "That model lends itself very well to advertising. You can literally drive business to a local establishment. It could be very effective."
While established players like Garmin, TomTom and Magellan have yet to offer such advertising opportunities, it's only a matter of time, said Angela Linsey-Jackson, a rep for Thales Navigation, San Dimas, Calif., which manufactures the Magellan GPS product.
"It's a natural next step," she said. "If you look at the long-term future, Wi-Fi is something that most of the leading GPS manufacturers are considering. At the current time, we do not do advertising on the product itself. I'm sure that will change as we continue to develop and introduce products."
This month, Magellan unveiled a partnership with the American Automobile Assn. Users will have access to AAA TourBook travel information and member roadside assistance details. The TourBook will feature "Show your card & save" locations where drivers can get discounts on products and services.
Garmin, which owns about half of the category, struck a similar deal with Entertainment Publications. The two companies are in year two of a multiyear partnership that allows Garmin users to search for savings offers. There are 50,000 discounts for everything from Domino's pizzas to stays at Wyndham Hotel properties. "Rather than just drive somewhere, why not save when you get there?" said Ted Speers, director-corporate marketing, Entertainment Publications, Troy, Mich. "Their technology and our database of offers is the perfect fit."
Speers said the two companies are considering "enhancing the product, bringing in other partners and adding more benefits."
No. 2 TomTom offers advertisers, like Dunkin' Donuts, the chance to place their logos on the GPS screen when a location is approaching (Brandweek, April 26, 2006).
"When you're in the car, you may need to find a gas station, a donut shop or some diversion, so it's perfect for marketers," said Richard Laermer, co-author of Punk Marketing. "It's a good time to try marketing on it because it's cheap, you're a pioneer and consumers are still in the honeymoon stage with their GPS systems."
NPD's Rubin warns that because GPS systems are subscription services, manufacturers "need to strike a balance. Part of the appeal of the category until now has been that its simple purpose is to help get you where you need to go. As they evolve it into other types of information services, it could dilute that appeal."
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Last Updated ( Monday, 09 March 2009 )
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Vehicle GPS Unit