Is the Future Here Already?

Marc PrioleauPrioleau Advisors

www.prioleauadv.com

“The future has already arrived. It's just not evenly distributed yet.”

William Gibson

Agenda• Some History• My Hypothesis• The Big Trends• Implications• M&A in the Location Space

“The K-Mart of Navigation”

• Navigation, Circa 1995• Delco Telepath 100• “The system is

rudimentary”Gary Dickson

President, DelcoMaster of Understatement

Evolution of Capabilities

Location (GPS)

Digital Maps

Data Networks

SmartPhones/App Stores

Tablets

20121995 2000 2005 2010

Evolution of Mobile Location

Navigation

Local Search

Location Advertising

Social-Location

Location Context

20121995 2000 2005 2010

Hypothesis• The Mobile experience is driving the User Expectations• User expectations will drive user behavior, regardless of

attempts to “manage” that behavior• Therefore, the in-car experience will be impacted by the core

aspects of mobile…• Or else people will drive with smartphones on their knee…

So how will Search, Social and Location Context impact the in-vehicle experience?

Why Does it Matter?• New business models disrupt established

models

Navigation

Local Search

Location Advertising

Social-Location

Location Context

20121995 2000 2005 2010

Upfront sellSubscription

Online Local Search Marketing

LoyaltyFoot traffic

Online engagement

Not Covering• Passenger Infotainment• Car-to-infrastructure• Vehicle CRM• Car-to-car Communications• Specific Implementations

Local Search• Most highly monetized

online revenue• Online local search has

disrupted off-line

• Well adopted, evolving merchant models

• Penetrating into most Connected Car concepts

Ads in cars?• Appropriate?• Strong sentiment that ads

may not be relevant while driving

• Feasible?• Can it drive new business

models?• My Guess: Inevitable

Blurring of Desktop and Mobile• Online behavior is no longer segmented into “mobile”

behaviors and “desktop” behaviors• Can search, find, research, compare, respond, purchase,

discuss…equally well on Mobile and Desktop.

• Implication: What I saw on my desktop, I may buy off my mobile

• Where does the vehicle fit into this?

Cost

(CPM

)

Reach

Location-Based Advertising• Spending on on-line

(hyper-)local advertising remains defiantly small

• Locations Services and Brands talking past each other

The Location Ad Divide

Reach vs Radius (& Relevance)• Conversation with

Mobile Ad company:• Importance of location:

8 out of 10• Understanding of

Location: 4 out of 10

Reac

h

Radius (Relevance-1)

Auto Dealer

Coffee Shop

New Category: Driving Search• Search while driving = high relevance

• Intent• Immediacy• Proximity

• Local search• Radius not as relevant• Why not Headlight: Along route• Why not Predictive: Tied into

Diary/PIM

Integration of Real Time Content• Traffic Information• Parking Availability• Speed Cameras• Real-Time Offers• Slack Time Marketing

• Loyalty Programs

New Idea: The Mobile Geofence

Static Geofence:

• Geofence around static object

• Action triggered when mobile detected in static geofence

Mobile Geofence:

• Geofence around Mobile (auto)

• Triggers controled by mobile

• Better control of privacy, preferences, timing

Search becoming Social

Search

Travel

Reviews

Social Influence

• Social is no longer a discreet segment of online

• Every aspect of Online will have a social component• Communication• Search• Reviews• Marketing• Buying/eCommerce

Social Structure

• Social is evolving around major “Engagement Platforms” plus many specialized apps

• Building on the engagement platform means:• Faster, cheaper distribution• Less control over the business

model

Which Social Network?

• All have slightly different aspects

• Not all will succeed• Some may be just

proving a market

• Google + is TBD

Facebook OpenGraph: More than LikesPLACE

• OpenGraph allows application developers tie directly into the 800+M Users in the Facebook Social Graph

• Push is on for new Verbs: More specific descriptors of what friends are doing

Last Week from Facebook

We are also launching APIs to allow applications to read this data. With permission, it will allow any application that a person is interacting with to access the places that that person and their friends have visited. This will allow travel apps to create trip suggestions based on vacations taken by your friends or suggest customized experiences to people based on their current location. A person arriving in a new city can get restaurant suggestions, hotel recommendations, and advice on the best gyms to use based on the places their friends in the area frequent to make the experience easier.

Implications of Social for Auto• Not about checking Facebook

while driving• Social recommendations in

“Driving Search”• What verbs will be important

in the driving experience?• Visiting, touring, looking for…

• Crowd-sourced data for Traffic, usage, lines, etc.

Twitter?• Not what you had for breakfast• Is real-time Micro-Publishing

about:• Events• Traffic/Accidents• Offers• Sights

• Twitter needs better location filtering

The Maligned Check-In• Foursquare pioneered the

check-in• Semi-Interesting social gesture• Very interesting engagement

mechanism• Problem: Check-In fatigue• Evolution: Auto Check-In

Context: Personalization• Mobile phones are ground zero

for online personalization• Apps• Contacts• Calendar• Communications

• Integration of phone with vehicle now underway in several ways

Phones track location…a lot

Habits• Habits involve:

• Mobile Phone use is driving the habits

Source: MIT Brain & Cognitive Sciences Dept.

Brain Activity

• Trigger

• Habit

• Reward

Don’t Believe Me?

Five Behavior Cues• Time of day• Emotional State• Other People• Preceding event and…..(drum roll please)• LOCATION

Local Context• Location is one of Five Key Behavioral Cues• Location helps define:• Behavior/habits• Lifestyle• Demographics• “Personal Map”• Unusual Events

Let’s Be Social Scientists….

Marc’s Last 30 DaysMarc is:• From California• In Telecom• Cheap• A Swiss Air Traveler

High Concentration

Barcelona26Feb-1Mar

Zurich26Feb & 1 Mar

24 Comercio Restaurant

Marc’s Last 30 DaysMarc is:• From California• In Telecom• Cheap• A Swiss Air traveler• From SF Bay Area• A skier 1000’s of points

Squaw Valley11-12 Feb

Marc’s Last 30 DaysMarc is:• From California• In Telecom• Cheap• A Swiss Air traveler• From SF Bay Area• A skier• From Palo Alto• Likes to get coffee on

University Ave• A train rider

1000’s of pointsUniversity Ave

Train Station

Marc’s Last 30 DaysMarc is:• From California• In Telecom• Cheap• A Swiss Air traveler• From SF Bay Area• A skier• From Palo Alto• Likes to get coffee on

University Ave• A train rider• In downtown SF two

days/week for work

Downtown San Francisco,

Mon, Weds, 8-6

Which would you try to sell Marc?

Mani-Pedi Ski Vacation

Business Models

Do you want to:• Sell Vehicles• Build Brand Loyalty• Sell Auto Electronics• Sell Services/Subscriptions• Sell Local advertising

?

Key for Future: Partnerships

• Competition is driving integrated solutions

• Many parts are needed• They will not self-assemble• Partnerships need to be

meaningful, focused on Big Picture

M&A in the Location Business

• 40-50 M&A Transactions/Year since 2007

• Many “Acqui-Hires”• A Few Mercy Killings• Relatively Few Big Deals

Market does not yet have Pattern Recognition

Source: Location Technology M&A Project

$1.7B$3.0B

$.5B$3.5B

$15B

Look at the Big Picture

• Think of the bounds of the problem you solve

• What Parts:• Do you have now?• Can you develop?• Should you partner for?• Should you acquire

• Have a plan!

Thank You

marc@prioleauadv.comwww.prioleauadv.com