Besides older, established, and affluent, the other key demographic automakers are going after these days–with a vengeance–is young people. Like cigarettes, once you’re hooked, automakers believe they have an “in” to move you up the line.
So what’s General Motors doing to change with the times, be down with the young folk, and make more money in the long-run? Focus on technology, namely its infotainment software.
Starting for the 2015 model year, GM says it will have mobile internet in many of its vehicles, allowing passengers in the back seat to stream videos and generally keep themselves more entertained, connected, and aware of what their friends are doing next weekend. That should make all of the cool kids want a new Chevy Sonic.
What’s more is GM’s ability to use its mobile internet service, bundled with OnStar, to run advertising.
“For example, what happens if when the logo shows on your screen, it says ‘brought to you by Allstate’?” GM CEO Dan Akerson said. “How many times is that going to pop? And how much can you get from Allstate?”
As a guy in Generation Y, our own Jason Davis weighed in on the subject: “My line of thinking may be different than our audience, but I would in no way put up with ads on infotainment. It’s one reason why I don’t listen to FM. If the vehicle I was considering could not be optioned without the ads, then I would go to another brand. Without hesitation, without a test drive.”
Akerson apparently hasn’t listened to the Facebook Generation with much attention. We know GM hasn’t. Young people don’t want ads for insurance, credit cards, or medicines. The latest generation has thrived on a feeling of independence. Meanwhile, advertisers with any sense have created targeted marketing that milks those users for every last penny they have to buy something you know they already like. That’s why Facebook wants you to fill out as many statuses, cities you’ve visited, likes, and dislikes as possible. It sells that information to advertisers in what is the most targeted marketing of any company in the world.
We don’t want to be told what to like.
GM says it will earn about $20 for each customer who has signed up for internet service. OnStar already generates $1.5 billion in annual revenue. Some analysts agree with us in saying that GM may alienate potential customers with advertising, but the risk may be outweighed by the reward. Everyone wants to be connected, and some estimates say that most cars will have mobile internet in them by the end of the decade, allowing for faster infotainment software updates.
“We do want to change [OnStar] from primarily a safety and security business to one that is much more feature-rich,” Akerson said.
But is it worth losing a generation of shoppers again who GM is just starting to get back?