Fear the Reaper or Hope for a Phoenix?
By Joshua Lawton, 6/26/18
From taxes that support our roads to a restructuring of a major sector of the economy, autonomous vehicles are going to reshape American life. This should come as no surprise for people who have been watching the move of millenials into urban cores and the resulting unimportance for them of obtaining even a drivers license. All of this will impact how advertisers reach audiences in the physical world.
However, the question that is raging is whether or not autonomous vehicles should be viewed as physical advertising’s reapers or phoenixes. From billboards to beacons, advertisers, OOH property owners, and technologists are trying to figure out how they can maintain their value within the advertising campaign mix. The good news is, the future looks bright.
Understanding how autonomous vehicles are going to affect advertising in the physical world requires us to envision when and how people are going to interact with autonomous vehicles. According to McKinsey and Company, by 2030 15% of all new cars sold will be fully autonomous. Furthermore, it is estimated that by 2030 only 20% of Americans will own a personal vehicle. While the 15% is a sizable percentage of all new cars sold, it’s important to understand when autonomous vehicles will be the majority of vehicles on the road (head here to see all forecast assumptions).
Given that the US has 31 years before the number of autonomous cars on the road overtakes the number of non-autonomous vehicles on the road, advertisers and property owners have time to plan and prepare for the new world of mobility. But what will the new world of mobility look like?
- The mobility sector is going to add more purpose built vehicles that focus on ride sharing and city transportation initiatives rather than the current automotive manufacturing mix.
- Ride hailing and ride share services are going to significantly expand their market share by 2030.
- Autonomous managed fleets will earn automotive manufacturers 9X more by 2030 than selling the same number of cars.
There are multiple reasons why the world of mobility by 2030 and beyond is a phoenix to advertisers and OOH property owners. Here are just a few reasons:
- Data will increase city and state tourism budgets: As smart cities evolve, more visitor data will be used for tourism campaigns. As seen in places like West Virginia, an increase in consumer data leads to an increase in the tourism campaign budget.
- Billboards are not just for advertising: One thing that we at Abraxas have seen to be successful with our clients is that as cities work to become smart, they will need to expand their IoT footprint. Billboard owners can add an additional revenue stream to their business by adding IoT capable devices to their billboards that fulfill smart city initiatives now and in the future.
- Autonomous vehicle riders are still going to notice physical advertisements: There is concern that riders of autonomous vehicles are not going to look outside the cabin at advertisements, however OOH owners should not fret. Beyond the mobile and in-vehicle advertising, there is little reason to believe that riders are not going to view traditional OOH advertising. While not exactly the same forum as ride sharing vehicles, major brands have found advertising in subway trains to be a powerful place for them to reach consumers.
- Reaching consumers in autonomous vehicles will become even more important: A review of the literature could not bring up non-anecdotal studies on whether or not individuals riding in taxis or ride sharing vehicles remembered billboards on average less than those driving a vehicle. However, it is unlikely that the following actions that consumers take in a car today (that they are driving!) is going to diminish with autonomous vehicles rather than increase:
Have questions about the future of autonomous driving on advertising? Feel free to reach out to Josh at JLawton@abraxastechnology.com.
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