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Consumer Insights
March 31, 2017

How Auto Brands Can Use Data for Smarter Technology Partnerships

Last year, Hyundai’s CEO called the car the “ultimate mobile device,” a statement that was echoed into the tech world canon by Apple SVP Jeff Williams. The technology industry has truly embraced cars as mobile devices, albeit the most expensive mobile device anyone owns, so it’s not surprising that CES 2017 was the scene of plenty of auto-tech announcements.

With advances in voice recognition and consumer acceptance of digital assistants, car makers are scrambling to build them into their cars. BMW and Nissan plan to integrate Microsoft’s virtual assistant Cortana into their vehicles, while Ford said it will include Amazon’s Alexa. Hyundai plans to integrate Google’s Assistant into its connected-car offering known as Blue Link. This is just one example of the increasing move of consumer apps, content and services into the connected car. How can automakers decide on the best technology and software partnerships for their brand—and their customers?

Auto Partnerships, At a Glance

There are undoubtedly major technical and business considerations to evaluate in auto partnerships, but the business development and marketing executives who negotiate technology deals should prioritize one thing: What their target customers want.

Certainly, automakers conduct market research and host focus groups; but with sophisticated consumer insights and data available today, brands can get a much quicker (and accurate) snapshot of their customers’ preferences — and how they overlap with the offerings of a potential technology partner.

At the same time, technology and software companies looking to partner with automakers can use consumer data to identify the best auto brand to co-brand with.

Evaluating Shared Audience

Let’s take the example of Spotify. Suppose that four major auto brands, Toyota, Hyundai, Nissan and Honda, are vying for an exclusive partnership with Spotify. They want to offer car buyers a free two-year subscription to the service, along with a special interactive Spotify experience integrated with the in-car app.

How can Spotify select the best car company to partner with? If you measure auto-buyer segments against Spotify app users, there appears to be a clear winner in terms of overlap:

Toyota and Spotify Infog

Weighing Consumer Attributes

Perhaps Spotify wants to partner with an automotive brand that could build on its current user base. There are several data points we can use to compare existing Spotify users against the customer attributes for the various auto brand, such as age. For example, the largest Spotify user group is aged 25 – 34.

Spotify Age Segments graph

The most over-indexed age group for Nissan is also 25 – 34, so they’re an ideal match for Spotify when it comes to shared audience. However, if Spotify wants to tap into a younger market, a partnership with Hyundai expands their exposure to 18-24 year olds:

Hyundai Graph

Consumer Attitudes

Perhaps just as important as consumer demographics, consumer attitudes can help automakers understand—and predict—the features, technologies and entertainment services their customers want and need.

Let’s start with Honda owners, who are more likely to value comfort and longevity in a car. Their attitudes seem to negate any interest in car add-ons or fancy features—perhaps not the best fit for a special interactive Spotify experience.

Honda Graph

Toyota owners enjoy going on long car trips and usually drive without passengers. These are all situations in which having good music could be important. They are also slightly more likely to want additional options with a new car, which is promising for an “add on” like Spotify.

Toyota Graph

Meanwhile, Nissan owners have the strongest automobile opinions in general, and are much more likely to select a car based on appearance, bells and whistles and technology options. They are more likely than any other car buyers to pay a lot for technology they want, and buy many of the options available in a new car—this may be an ideal attitudinal fit for a Spotify partnership.

Nissan Infog

Depending on the goal, there are many different data points that an auto brand (or technology brand) could use to evaluate the best potential partnership. The key is to identify an objective, whether it’s to support your main customer base, or expand to a new market segment through an edgy technology integration—and then leverage the right audience data to identify which partnerships will get you there. There will always be room for “going with the gut,” but in the competitive automotive sector, the company with the best data wins.

Source: Data pulled using Hitwise’s AudienceView tool. Overlap of Toyota, Honda, Hyundai and Nissan buyers against Spotify app users was pulled over a 4-week period ending 1/21/2017. Spotify age demographics pulled over a 4-week period ending 2/25/2017 based on Spotify app users, website visitors and searchers. Auto brand demographic and attitudinal attributes pulled over a 4-week period ending 2/18/2017.