There's increasing adoption of automobiles where connected vehicles are gaining rapid traction worldwide. The most prominent reasons behind this include the improving economic conditions of people, the growing necessity of vehicles, & constant developments in technology. It, in turn, is encouraging the utilization of sensors to generate massive data associated with vehicles & drivers.
The process of identifying, analyzing, and marketing this voluminous data to obtain monetary benefits by offering services, products, policies, & other revenue streams is known as data monetization. This medium of revenue generation is emerging swiftly across the automotive industry and is likely to witness an upswing in the coming years.
The Potential of Automotive Data Monetization
Digital transformation across different verticals has widened the opportunities & potential of data monetization in the automotive sector. In a world of connected vehicles, the data generated through sensors can benefit the procurer to attain substantial economic benefits when used in the best ways. Data monetization is the entire process of data gathering, analyzing, & marketing for money and has two types: internal & external.
Internal monetization is about optimizing operations and bringing efficiency & productivity for the data exhibiter. On the other hand, external monetization involves data sharing with end-users, using which they can produce new revenue streams & improve the collaboration between external & internal stakeholders.
Data Monetization includes products & services in the form of consumable data sets, operational applications, & analysis results, among others. Additionally, these data can also be monetized as reports, provision of new services, establishments & expansion of digital platforms, the introduction of new business models, and various others.
The benefits of attaining deeper insights into the vehicle to enhance customer experience with better services & products are delivering greater customer loyalty for the end-users and expanding their customer base. As a result, the demand for data monetization in the automotive sector is likely to grow significantly, which, in turn, would lead the Global Automotive Data Monetization Market to register around 94% CAGR during 2022-27.
Moreover, data monetization in the automotive sector optimizes data usage & helps end-users attain maximum value potential. It can be achieved by obtaining information about market demand, data life, potential customers, competition, & other essential parameters.
How Stakeholders & OEMs can Benefit Value from Vehicle Data?
While data monetization is still an emerging trend in the automotive industry, there are both opportunities & hurdles to get the best out of the data generated from the vehicles, depending on stakeholders, end-users, applications, & more. Amongst all end-user industries that look for vehicle data, OEMs are likely to witness several growth opportunities & perks using data monetization.
Automotive OEMs are actively working on building innovative business models to provide services like confirming the availability of parts, reminding about timely repairs, remotely addressing issues in connected vehicles, predictive vehicle maintenance, UBI (Usage-Based Insurance), real-time mapping, etc. It, in turn, is expected to benefit not only the OEMs but also customers & related partners.
Let us not forget that data monetization in the automotive industry is still at a nascent stage. With the active participation of prominent players in the industry and their ability to develop products, services, policies, etc., stakeholders are likely to enhance customer experience by delivering safety & security. As a result, it would soar the demand for vehicle data from both automotive & non-automotive sectors to attain improved financial benefits.
Moreover, several automotive OEMs are increasingly investing in data monetization. However, some are still hesitant in sharing data with third parties & are more inclined toward producing new streams for revenue generation. Besides, several OEMs have focused immensely on data privacy to eliminate the risks of data breaches, threats, attacks, etc., since such cases can affect the trust, reliability, & reputation of the brands. Hence, they are highly reluctant while sharing & utilizing data with third-party providers.
Additionally, to get the most revenue of the data generated from connected vehicles, OEMs must obtain an efficient machine learning model to obtain the business value. This approach is necessary to extract benefits from the complex data to generate predictive insights. Additionally, they must have a robust & reliable system that can ensure the safety & security of data from breaches, threats, & attacks and address all the privacy concerns. As a result, it is another crucial aspect that augments the demand for machine learning models among OEMs while they adopt automotive data monetization.
For vehicle owners across the world, the most valuable aspect of connected cars is their software & electronics that enhance the overall user experience & makes driving safe, comfortable, fun, and productive. On the other hand, for automakers, the data generated and all the information it can give about the customers & their experience with the car remains the most prominent aspect.
Connected cars are well-equipped with high-tech software & systems that gather a massive amount of insights into the vehicle & drivers, such as driving & braking patterns, geolocations, driving hours, real-time vehicle diagnostics, etc.
This information about the driver, vehicle, and performance & conditions enable end-users to make smarter decisions, bring services & products, and tap into new business models to generate new revenue streams. Additionally, with these aspects, end-user companies are also greatly inclining toward the safety of vehicles, drivers, & passengers altogether, and in turn, attaining value from the vehicle data.
Data monetization in the automotive industry can be beneficial for both customers & end-users like OEMs, insurance companies, etc., to ensure safety through the data gathered from sensors. It, in turn, would promote the overall growth of the Global Automotive Data Monetization Market & generate growth opportunities for the leading stakeholders in the coming years.