October 15, 2008

Ads on your GPS - Driving the Future of GPS Capabilities?

Garmin recently announced that they are offering free traffic feeds to their Nuvi 755T, 765T, 775T and 785T units via small ads that come up every now and then. When using the Nuvi 755T for my Full Review, I found them unobtrusive, and a natural fit to what I was doing or where I was going; it got me thinking about where this will all lead. If you hadn't noticed, the stocks of Garmin and TomTom are down about 70% and 80% YTD, respectively indicating that the markets aren't convinced that these businesses have the growth ahead of them that we have seen in recent years, where 100% year over year profit growth was possible. With margins being where they are, GPS manufacturers may only be making $20 on each low end device, which is not a lot when you consider the work that they are doing to get such a device to the market. The idea of ad supported GPS units may offer the residual income that so many businesses seek with their offerings from Tivos to razors and satellite radios. What's the potential for GPS?

Ad Supported FM-based Traffic Feeds - Quick Ad, POI Listing

Nuvi755TAdclip.jpg

These are here now, with the Garmin introductions. Previously costing users about $60+ a year Traffic feeds give you the ability to route around traffic problems is big. I have long thought that this is a huge need that is partially met by the current mix of data feeds and low bandwidth capabilities of the FM-based TMC network (or MSN network). Broad swaths of generalized traffic trends allow good GPS units to help figure out the big problem spots. Big step up from the guy in the traffic copter. The ads are small (shown right - an ad from the Nuvi 755T) and when tapped connect you to a Points of Interest list of those stores or locations - pretty basic, but it's a start. Basic ads gives you $60 a year in value.

Intelligent Ads with Unique Offers - Daily Use

With the launch of the Dash Express this year, two way connected GPS units starbuckslogoRT.jpgushered in the wave of higher bandwidth more intelligent data feeds. With better bandwidth and better interactivity, a more intelligent ad network can be had too. Can you imagine the confluence of a few data feeds to drive targeted marketing: 1) "Home" location and zip code, 2) Frequent search topics on the GPS, 3) Current location, 4) Time of Day, and 5) Travel habit profiling - daily commuter vs. business traveler. With this information fed back to ad servers, highly targeted offers can be made, and thus be more lucrative for the GPS make

  • If you ever search for a coffee shop in the afternoons while on the road, why wouldn't Starbucks send you an ad when you are within a less than mile of their store with a coupon code for $1 off your Venti?
  • If you are a business traveler, why wouldn't restaurants start pushing ads for dinner when it's later in the day knowing that you always look for a place to eat when you are on the road?
  • When Target knows that you drive to their parking lot every other week, why wouldn't they send the latest announcement to entice you back and keep you as a loyal shopper?

The possibilities are either endless or scary depending on your sentiment, but this is all dependent on a two way exchange of data between a highly intelligent GPS, and a data crunching server somewhere. For this you'll need connected GPS. Better, more targeted ads could possibly cover the current $120+ per year annual fee for this cellular connected service. While you are at it, throw in free Map Updates once this model matures. Advanced Targeting, rich ads = Higher Value Freebies like a connected subscription and free map updates.

Interface, Interface, Interface

Like the rule of real estate where location is king, the interface rules the GPS world, and only a couple of makers are currently up to the task. I am pretty sure that Garmin worked hard to make sure that their initial offering with the Nuvi 755T and its siblings was very well thought out made to be not at all polarizing. The next step of bringing richer, more obtrusive and more informational ads will bring new challenges. With the maturation of the Web, and the serving of its ads (Think Google here), the idea of data crunching and serving up relevant ads seems like a small hurdle, it's striking that balance between obnoxious and unseen. We all hate pop-up ads on a web page, but we won't swerve off the road trying to "X" out of them while sitting at our computer desk; these can't be the norm on a GPS device. Advertisers won't pay to be unseen either. The true art will be knowing the consumer and knowing how to subtly bump them while not interfering with the navigation experience.

There are a lot of possibilities for rewards if ads are done right, and the potential to save the GPS companies from this recent slide, but ads need to be expertly integrated into the interface so that they are seamless and relevant. If they are, consumer, and businesses will benefit through better services and better offerings. Looks like a lot of fun ahead; I can't wait to see the possibilities.

Read More in: Dash News | Garmin GPS News | Mobile Phone GPS | TomTom GPS News | Traffic News

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Posted by Scott Martin at October 15, 2008 8:32 AM

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