Under the Influence with Terry O'Reilly - S7E24 - Fasten Your Seatbelts: How Self-Driving Cars and Marketing Collide

Episode Date: June 14, 2018

This week, we look at how self-driving cars affect the world of marketing. While it may seem like a bit of a novelty these days, the era of the autonomous car is fast approaching. And the implications for business, marketing and everyday life are astounding. Fasten your seatbelts.  Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan. You just have to love storytelling. Subscribe now and don't miss a single beat. In case nobody's told you, weight loss goes beyond the old just eat less and move more narrative. And that's where Felix comes in. Felix is redefining weight loss for Canadians with a smarter, more personalized approach to help you crush your health goals this year.

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Peloton. Visit Peloton at onepeloton.ca. From the Under the Influence digital box set, this episode is from Season 7, 2018. You're so keen in it. Your teeth look whiter than no nose. You're not you influence with Terry O'Reilly. One of my favorite movies of all time was filmed in 1951. It starred Michael Rennie and Patricia Neal. It was called The Day the Earth Stood Still.

In the film, a UFO lands in Washington, D.C., and a human-looking alien emerges from the spaceship. The alien, played by Michael Rennie, says his name is Klaatu, and he has come to Earth in peace. When he goes to open a small device, a nervous soldier fires his gun, wounding the alien. At that moment, a giant robot appears from inside the ship. Klaatu tells the menacing robot, named Gort, to stand down.

Klaatu is taken to hospital under armed guard, where he heals himself and escapes. He meets a scientist and tells him he has come to Earth because a United Nations on a planetary scale has become concerned that Earthlings have developed a rudimentary form of atomic power that endangers the safety of the other planets. If Earth does not eliminate this potential weaponry, then Earth itself will have to be destroyed. We learn that Gort is a member of an intergalactic robot police force with irrevocable powers to preserve peace,

with directives to destroy any and all aggressors. The scientist asks for a demonstration of Klaatu's power, so the alien neutralizes all electric and motorized power. The Earth stands still for 30 minutes. The 1951 movie was far ahead of its time and foretold the dangerous implications of nuclear war. It has also become a part of pop culture. The American Film Institute ranked it as the fifth best film in the science fiction genre.

The New York Times called it one of the best movies ever made. A line from the movie is also on the best movie lines of all time list. And, ironically, it is in an alien language no one understands. At one point in the film, Klaatu tells Patricia Neal's character, Helen, that if anything should happen to him, she should go to Gort and say a specific sequence of words to him, presumably to stop Gort from destroying the world. Sure enough, when Klaatu is fatally wounded,

Helen rushes to Gort and utters the famous line, Klaatu, Beretta, Nicktu. The 1970s Canadian rock band Klaatu was named after Michael Rennie's character and had a hit with the song Calling Occupants of Interplanetary Craft.

The cover of Ringo Starr's 1974 solo album Goodnight Vienna shows Ringo Starr's 1974 solo album, Good Night Vienna, shows Ringo dressed as Klaatu standing beside Gort. It is also said the film inspired Ronald Reagan to discuss with Mikhail Gorbachev the possibility of uniting against a possible alien invasion. Later, during a United Nations speech, Reagan said, I occasionally think how quickly our differences worldwide would vanish if we were facing an alien threat

from outside this world. The day the Earth stood still is a classic motion picture because it gave the world a lot to think about when it came to the future. The future has given the world of marketing a lot to think about, particularly when that future includes self-driving cars.

While it may seem like a bit of science fiction, the era of the completely autonomous car is fast approaching, and the implications for business, marketing, and everyday life are astounding. Not only will cars perform many of our tasks for us, our businesses, our towns, and even our houses will undergo a massive redesign. Hardly any corner of our lives will be unaffected by the impact of self-driving cars. In the very near future, we will all be occupants of planetary, most extraordinary craft. You're under the influence. Oh, hey.

Just took my crystal ball out of storage. I don't like making predictions as a rule, but I figured it might be a good day to pull it out of m. I don't like making predictions as a rule, but I figured it might be a good day to pull it out of mothballs and do a little gazing into the future. There we go. Nice and shiny. Today we explore how self-driving cars could affect the world of business and marketing. It's a big topic, and there are a lot of huge benefits and a lot of downsides.

First, self-driving cars have been categorized by the Society of Automotive Engineers into six different levels. Level 0 has zero automation. Level 5 is full automation, with no human intervention required. We are at least a few decades away from level 5, but let's imagine that world for the next half hour. Roughly 1.3 million people die in car accidents around the world each year, which means around 3,200 people die every single day. An additional 20 to 50 million are injured or disabled due to car accidents annually. 90% of car accidents are caused by human error. The prediction for self-driving cars,

once the technology has worked out all the current bugs, is that very few accidents will occur for one simple reason. Self-driving cars will remove the key source of error from the driving equation, namely, humans. Theoretically speaking, self-driving cars will not drink and drive, they will not fall asleep at the wheel, they will not be distracted by cell phones, they will not experience road rage, and they will not make errors of judgment. Here's what that means for the insurance industry. A dramatic reduction

in accidents means the number of automotive collision claims will plunge too. Collision coverage is one of the industry's biggest sources of revenue. This might mean insurance industries will have to radically alter their business model. In other words, insurance companies would have to shift liability away from the driver to the vehicle manufacturer. Put another way, if human error is removed, then the responsibility shifts to the manufacturer for technical error. If accidents occur in the future, chances are it will be the result of a

software malfunction. Car technology is changing rapidly. So much automotive automation already exists, like collision avoidance, anti-lock braking, adaptive cruise control, blind spot monitoring, lane departure warning, rear obstacle detection, and hands-free steering. The next 15 years will be dedicated to creating an artificial neural network for onboard car computers that can react to real-life situations. That means developing software that not just detects objects, but has an understanding of objects. So, if a ball bounces across the street, a car will understand not just the ball, but that a child may be near. If it's true that self-driving cars will reduce 90% of accidents, the impact will be enormous.

It means 1,700 people in Canada would be saved every single year. In the U.S., it could mean close to 30,000 deaths prevented annually. Want an even more stunning prediction? Self-driving cars could save 50 million lives around the world in half a century. Let's talk health care. If driverless cars mean 90% fewer car accidents, it could mean a saving of more than $200 billion a year in North American health care costs associated with collisions. That's good news for governments and insurance companies. If you follow that through to its logical conclusion, ambulances, police, and fire trucks

will no longer be responding to car accident calls. And the drastic drop in auto fatalities and injuries will have a dramatic corresponding drop in lawsuits. So the legal profession will see a big disruption in personal injury revenue. Conversely, if liability shifts to car manufacturers, then car companies will have to have massive in-house legal departments. Let's talk body shops. The Canadian Transportation Safety Board estimates

there are just under a million car accidents in Canada every year. The U.S. Department of Transportation estimates there are around 6 million police-reported crashes per year. That's a lot of business for repair shops. But if 90% of collisions are reduced due to driverless cars, most body shops will go out of business. If you're a body shop owner, you may want to start planning how to evolve with the coming disruption. 15 years is not that far away.

Let's talk driving schools. For many years, the road will be shared by human drivers and self-driving cars. But as the numbers tip over to driverless vehicles, there will be little need for driving schools. We may see that entire industry disappear this century. Self-driving cars will have a huge impact on how cities will look and sound. There will be no need for traffic signs, traffic lights or speed limit postings. Cars of the future will know the rules of the road and sense these limits automatically. Therefore, traffic fines will decrease, which is not good news for local government coffers.

And if there is an infraction, it raises the question, who gets the ticket, the car owner or the car manufacturer? There will be no need for curbside parking or sprawling parking garages. It is said that parking spaces eat up 30% of city geography. In the U.S., there is 61 billion square feet of parking space. In the self-driving future, Wired magazine predicts cities will create and scatter small

nests or parking hives for autonomous vehicles to gather. They will drop you off at your destination, then drive to a hive to await your next scheduled pickup. That means traffic will flow smoother through cities as more lanes will free up. Bicycles will have lots of room to roam, and current parking lots can be transformed to green spaces. With driverless cars dropping you off and scurrying off to their hives, nobody will be entering buildings from garages anymore. Wired says architects will be reimagining buildings with much more elaborate lobbies,

and underground parking garages will be a thing of the past. You might not need your home garage anymore in the future, so they will be repurposed into new rooms and living spaces, providing new sources of work for the construction and renovation industries. Public transportation will be driverless. Buses, subways, and trolleys that drive the same route every day are perfect for autonomous vehicles and can run 24 hours a day. Car services like Uber and Lyft are already experimenting with self-driving.

As a matter of fact, Uber is working with NASA now to develop flying taxis within the next five years. Cities will be cleaner, greener, and quieter, as most driverless vehicles will probably be electric. Because commutes will be faster and easier, higher real estate values may shift from urban centers to the suburbs, which will have big implications for the real estate industry. The downside?

Increased urban sprawl and probably more roadside billboards. Autonomous vehicles will also multitask. So, a vehicle could serve as a school bus in the morning, then deliver packages during the day, transform back into a school bus at 3.30, then ferry people home from nightclubs and bars in the evening. Then, they would gather in their hives overnight. That's why self-driving cars are very intriguing to the alcohol industry. And we'll be right back. If you're enjoying this episode,

why not dip into our archives, available wherever you download your pods. Go to terryoreilly. A must attend for marketers. marketing officers from the world's most successful brands gather to give talks and workshops, a must-attend for marketers. At the gathering, I listened to a talk by the director of marketing for Jack Daniels. He mentioned that his company was very interested in self-driving cars, as most of the alcohol industry must be, I would imagine.

Drinking and driving is a huge problem. Over 13,000 people die in alcohol-related accidents each year in North America. But if a human doesn't get behind the wheel, then intoxicated driving should theoretically disappear, saving many, many lives. From a business point of view, it will have a big impact on alcohol marketing. First of all, there will be no need for a designated driver.

So if four people are going to a bar and one of those people no longer has to refrain from drinking, the alcohol industry just added 25% more revenue to their bottom line. If no human is in control of the driving, I wonder if alcohol will be allowed in cars in the future. I'm not advocating it, so no cards and letters, please. I'm just pontificating with my crystal ball. A driverless vehicle will look very different inside. First, there will be no need for a driver's seat. That means the interior of cars will become modular.

Seats will be able to turn into beds for long journeys. Or front seats will be able to swing around and a table could pop up for business meetings. Or a car could convert into your mobile office complete with a desk. Commutes will become productive. If you no longer have to drive, why not use the time to get rid of a spare tire? There is a possibility that self-driving cars could transform into fitness pods with fitness equipment. You can do your 20-minute workout on the way to work in the morning. A boon for fitness equipment manufacturers.

There will be giant screens in cars of the future, and vehicles will be completely internet-connected. So, you can tap Netflix on the way to work, or catch up on your favorite TV show. That means cars will be able to convert into theater-mode seating with a surround-sound immersive experience. Cars of the future may even be built out of different materials, especially if the danger of collisions

drops drastically. There might be much more window area to enhance viewing since you no longer have to keep your eyes on the road. You will also be able to program personalized sightseeing tours. Just punch in the itinerary on the screen, sit back and enjoy the sights. That means tour operators will have to evolve and market very different services in the future.

Those giant in-dash touchscreens will present huge opportunities for marketers. As a matter of fact, there will be a big corporate fight to control the dashboard of the future. Your screen will be full of branded apps. So, you'll be able to place your order at Starbucks with the tap of an app. Then your car will find the closest drive-thru to pick it up.

Online shopping will increase as people will have more time to peruse their favorite retail websites as they travel. Online shipping will get more efficient as we mentioned earlier with self-driving delivery vehicles. Vehicles will deliver packages to vehicles. The advertising industry loves a captive audience and in-car screens offer a myriad of advertising opportunities. If you need to buy an item, you'll be able to touch the screen during a commercial, your car will quickly source the nearest store and employ GPS to get there, or send the item to your home. The elderly and the disabled, who often lose the freedom to drive, will be much more mobile and therefore can do more shopping and traveling if they choose to.

It will be interesting to see how self-driving cars will be marketed. First, many car slogans will have to be revised. For instance, BMW's The Ultimate Driving Machine may have to become The Ultimate Self-Driving Machine. Car advertising is built on the foundation of gripping the steering wheel, wandering along an oceanside road or winding your way through traffic with high-octane performance. But as Advertising Age magazine recently stated, self-driving cars may just upend the entire marketing playbook for the $9 trillion global auto industry. The challenge for carmakers will be to redefine automotive freedom. They will have to shift that thinking from the freedom of an arm out the window and a hand on the wheel,

to the freedom of being able to work during your commute, the freedom to watch a movie while you travel, and above all, they'll have to convince the public that relinquishing control is freedom. People are apprehensive about stepping out of the driver's seat, but they are excited about the leap in personal safety. As more autonomous features are added to cars a step at a time, so too will the marketing messages transform a step at a time. It will be an evolution in persuasion. If you're looking for flexible workouts, Peloton's got you covered. Summer runs or playoff

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Find your power. Peloton. Visit Peloton at onepeloton.ca. Another category ripe for disruption is the airline industry. As driverless cars free up time to work, exercise, or sleep, many people will choose to drive to their travel destinations instead of flying. As Audi Vice President Sven Schubert says, your car will wake you up at 4 a.m., pick you up, and drive you autonomously the entire way from Munich to Berlin.

You can sleep, you can prepare for your meeting, you can call your friends and family, do whatever you want and enter Berlin in a very relaxed mood. Suddenly, short-distance air travel won't seem worth the hassle or price. Which is also a big problem for the hotel industry. People on longer drives, say from Toronto to Florida, might not stop overnight at a hotel. They'll choose to sleep in their car bed. It's cheaper, easier, and gets you to point B faster. Roadside hotels and motels will suffer because the convenience factor they rely on won't be so convenient anymore. And that's a major theme you'll notice throughout many industries mentioned today.

Flying to Halifax won't be convenient. Stopping at a hotel won't be necessary. So these industries will have to recalibrate their marketing and focus their energy on enticing customers with an experience. Giving them something they can't get in their car, something that makes them choose to stop and pay extra. That kind of thinking also poses a huge problem for the fast food industry. With driverless cars taking you seamlessly to your destination on the fastest route possible,

fewer people will detour and impulse buy at, say, McDonald's. Restaurants off the highway near gas stations will suffer because driverless cars will mostly be electric. So, like a Roomba vacuum cleaner, they'll head to designated charging stations on their own when they need to. The Tim Hortons near the gas station without charging stations will no longer be a convenient stop. But autonomous cars will also benefit the fast food industry.

Get a load of this. Driverless delivery vehicles will be able to cook food in the car as it travels to your house. This means a hot pizza will be pulled fresh out of the oven just as it pulls up to your front door. It also means

fewer trips back and forth to the restaurant for the delivery car, something Pizza Hut and Domino's are already experimenting with. In the future, autonomous cars will even be able to run our errands. Whether our dry cleaning has to be dropped off or our groceries have to be picked up, we'll be able to send our cars out to complete the tasks for us. Say goodbye to the honey-do list and say hello to the Honda-do list.

It's going to be a brand new world. I remember being in a meeting with the Rogers Cellular Division way back in the early 90s. They were telling us we were only using about 10% of a cell phone's capability, that, in the near future, we would be able to take pictures with our phone, store and play music, shoot video, pay our bills, compose emails and buy products with it. I remember we all laughed at the thought of it.

Nobody in that room could even imagine how a phone could take a photo. How quickly that future arrived. The thought of completely autonomous cars may seem that far-fetched now. Of course, a lot of development has yet to

happen. There are literally thousands of variables when driving a car, and autonomous vehicles will somehow have to learn them all. There are a lot of unanswered questions, too. Will self-driving cars lead to less car ownership and more on-demand car sharing? Or will it lead to more car sales because we'll want to customize the interior of self-driving cars so we can pass the time with personal preferences. Will many jobs be lost in this brave new world when it comes to self-driving public transit, school buses, cabs and delivery vehicles? Or will the millions of brilliant minds saved due to the drastic drop in auto fatalities lead to amazing innovations.

If history has taught us anything, disruptive technology always leads to new opportunities. Who knows what new industries will pop up to create new in-car traveling experiences? Or what new jobs will be required to serve and respond to all those mobile people who no longer have to keep their eyes on the road. Fasten your seatbelts. It's all coming fast. Because the world of

technology never stands still when you're under the influence. I'm Terry O'Reilly. Under the Influence was recorded in the Terror Stream. Producer, Debbie O'Reilly. Sound engineer, Keith Ullman. Theme music by Ari Posner and Ian Lefevre. Co-writer, Sydney O'Reilly. Follow us on Twitter at Terry O'Influence. See you next week for the last episode of the 2018 season.

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