GM plans to display ads on the vehicles’ infotainment system through its 4G initiative.
“I have grandchildren that have only grown up in a world with smartphones,” Akerson, a former telecommunications executive, said this week while discussing GM’s quarterly results.
The automakers have begun to prepare for the upcoming tech-savvy generation of consumers, as they are aware that if the in-car entertainment and navigation systems are done well they can attract new buyers. Customers have been complaining that their vehicle infotainment systems are harder to use than their phones, so automakers have tried to update the in-car software so that it won’t become outdated during the car’s life.
Besides offering passengers the possibility to watch streaming video in the backseats, the company also plans to sell advertising within the car. As the average American citizen spends around four hours a week commuting to work, advertisers have a chance to promote their brands during this time.
“For example, what happens if when the logo shows on your screen, it says ‘brought to you by Allstate’?” said Akerson, using Allstate Corp.’s name to illustrate GM’s options. “How many times is that going to pop? And how much can you get from Allstate?”
For each customer who chooses the Internet service GM gets $20. But several analysts believe that the automaker will alienate its customers with the in-car ads, concerns which might be outweighed by the other features offered by the new service, such as traffic information and real-time navigation.
“This is part of the revolution in product and innovation that Buick and Cadillac need to do to become more relevant to younger buyers,” said Alexander Edwards, president of research firm Strategic Vision.