Franck Cazenave looks at future business models for the connected car. Key conclusion: data is going to loom large…
With his long experience of working in tech-related posts in the automotive sector, Franck Cazenave is an expert on Big Data and cars. His book Stop Google, published (in French only) by Pearson in 2014, takes issue with the imminent hegemony of Google in the automobile industry and points out in a salutary manner that nothing that is provided ‘free’ on the Internet actually comes without a price. We interviewed him on the sidelines of a L’Atelier numérique (L’Atelier Digital) podcast on the BFM Business channel and asked him to shed some light on the issue of free data and its future use in the automobile context.
L’Atelier: In your book Stop Google you point out that nothing on the Internet is really free and that apparent freebees do come at a price...
Franck Cazenave: Yes, in a way there’s always a price to pay. When you make use of free services, such as email and messaging, you’re actually handing over your data to the service provider. If you read through the Gmail conditions of use, it’s quite clearly stated that Google will read your emails and use the information with a view to offering you various services. So in fact you’re paying for the ‘free’ service by handing over your personal data and also giving up the right to privacy in your communications. When Google uses this data, it’s almost the same as if your postman were to take the letters that he’s supposed to deliver to your home, open them, read them, photocopy them and file them away, and then use the information in order to offer you other services. So it’s just as if, based on that letter, he were to put other post – i.e. sales material – into your post box. Google gets paid by advertisers who pay for the right to target their publicity material at individual people based on the data collected on them.
Some people on the L’Atelier Digital broadcast thought that Google only scanned some keywords in our emails and that – by and large – our messages remain confidential.
No, no, I suggest you read Google’s privacy conditions. And of course there’s a new legislative bill on digital services due to be brought before the French Parliament next year, which has already been the subject of public debate. The Secretary of State in charge of digital affairs, Axelle Lemaire, is proposing to make email privacy mandatory – and it’s precisely for this reason that she wants to insert that clause. There are a number of email and messaging service providers that certainly do use email content to find out more about people’s tastes for the purposes of targeting advertising more closely.
So on Gmail there’s no privacy for your emails, then?
No, once they decide to scan your data to provide other services, there isn’t. But that doesn’t just mean that they only scan your email content. Your attachments will be scanned as well, if necessary.
So do you personally have an alternative email address to the one Gmail provides?
Yes I do. It may not be very trendy but the Post Office, for example, does guarantee the privacy of your emails on its system and has for quite some time now been doing a lot of publicity on this point. The idea is to return to the full privacy enjoyed by letters delivered by your postman.
But is that really going to happen? That’s far from sure at the moment because companies like Google have very powerful business models. Gmail boasts some 500 million users worldwide. That’s a colossal figure. However, with the imminent appearance of France’s new digital legislation, a public debate is now taking place – especially on the data privacy issue.
In ‘Stop Google’, you go further and allege that Google, not content to dominate the digital world, is now about to attack the real world, and that in this battle to conquer the world the automobile is the Holy Grail.
That’s right. And in fact even before the link to the real world – before cars – it’s all about smartphones. What I explain in my book is that the smartphone is a sort of hoover, sucking up personal data, because it means that you’re permanently geolocated so they can find out where you are, what it is you’re interested in and target you with value-added information. Cars are the second key item on the mobile agenda, precisely because of the drivers’ smartphones. And this is what Google is interested in: being in mobile and going beyond mobile, becoming the [Amsterdam-based online booking website] Booking.com of the real world, i.e. the intermediary between consumer and point of sale.
Today Google captures 10% of the global advertising market thanks to our data, which means that advertising can be more closely targeted. This market is worth over $50 billion annually to Google.
But there’s another market that’s potentially even more spectacular: guiding you to a specific retailer for a specific purchase. At Booking.com, they charge the hotelier a 20% commission on rooms you book via their platform. In the same way, Google could demand a percentage on the purchase you make, because it’s directed you to that consumer site. And that’s where the car comes in. There are 1.4 billion cars worldwide. It’s the prime means of transport for people to get to work, do their shopping and other errands and enjoy their leisure time. What Google wants is to be the middle-man. This will happen in several stages. First, Android will become the in-auto platform for connecting cars, with Android Auto. Then Google will offer mapping-related services – Google Maps plus [community based traffic and navigation app] Waze, which Google owns, etc.
Several years after Google’s acquisition of Waze, we can now begin to grasp the strategic value of mapping. Mapping enables us to find out what’s around us and decide where we’re going. These days we don’t use Michelin paper maps anymore, we use our smartphones. Either we use our phone in the car, or else the navigation service embedded in the car. Waze and Google Maps offer highly specific real-time traffic information in the same way as other paid-for services, such as [French community-based driving assistant system] Coyote. And lastly, with Android Auto, you’ll be able to get the information you can bring up on your smartphone directly on the central console screen of your car. This is the next step.
But won’t the auto manufacturers have the final say among all these navigation services? In Stop Google you talk about Navteq [a Chicago-based provider of geographic data and electronic navigable base maps] which has for many years been working with a number of auto makers. How are these automobile manufacturers going to react?
Well, Navteq developed ‘Here’ which became part of Nokia and was then acquired by a consortium comprising Audi, BMW and Daimler. It seems that these auto manufacturers finally grasped the value of mapping services and so they purchased the top car mapping company. ‘Here’ accounts for 80% of navigation in vehicles sold today. So they’ve already responded. The problem is however that ‘Here’ requires the auto manufacturers to buy a licence and meanwhile 35 auto brands have signed up to Google’s Open Automotive Alliance. So these 35 brands will be installing Android Auto in their vehicles and the smartphone apps will be displayed on the screen in the car.
So the conundrum is: as a manufacturer, either you buy a licence, which adds to your manufacturing cost per car, or tomorrow, with Android Auto, the customer will be able to decide which navigation service to use. So leaving it up to the customer to make the choice could actually save auto manufacturers money.