The Marketer’s
Guide to the
Third Space
How and Why Brands
Must Reach On
The-Go Consumers
Through the Untapped
In-Car Market
Part 1:
Welcome to
the third space
Picture this: You’re lounging on a perfect night with your family and friends. There’s a sudden burst of laughter over your shoulder from a group that’s streaming a movie. The person next to you asks if you want in on their food order. You ask for the No. 2, smile, fire off a quick work email, and recline your seat to look up at the stars.
So where does this scenario unfold? A five-star resort? A scenic cliffside hotel?
It’s neither. You’re at a roadside pull-off next to a remote beach in South Carolina. And all of this is happening inside your car.
Sound far-fetched? Or a little cramped? Very soon, this scenario will feel more like the rule than the exception. And brands need to prepare to engage with these new on-the-go consumer behaviors now.
While we’ve gone from dial-up internet to wireless 5G connections in just one generation, the car has remained
one of the last digital dark zones for advertisers. But that’s
changing dramatically. Over the past decade, the first
wave of convenient technology inside cars – like hands-free
phone calls – has become the norm. And while these were
breakthroughs, they were essentially just new ways to do
the same core operations drivers were already doing. Now,
advancements like in-dash virtual assistants, heads-up
displays that can share directions and road alerts and the
equipping of truly connected cars – which can provide lowlatency Wi-Fi to everyone in the roadside vehicle scenario
we just described – are giving drivers more options while
simultaneously keeping them as safe as possible when on the
road. This, in turn, creates opportunities for marketers to do
exactly what these drivers want them to do: invigorate their
imaginations, satisfy their cravings and offer them ways to
improve their lives, all while they sit in their vehicle.
These advancements have transformed the car from a
necessary utility for most drivers into a desired dwell space
where they have the best of all worlds: creature comforts,
connectivity and instant mobility. That also means they can
decide everything – from where they stop for dinner, to what
movie they go see and where they vacation – from the driver’s
seat without needing to first move to a more comfortable or
digitally accessible place.
.
In today’s omnichannel customer journey, the car is one of the largest underutilized opportunities. Simply put, the future of reaching on-the-go consumers puts a greater focus on in-car marketing. It’s a concept we’re calling the third space. While the third space can technically take multiple forms, it represents both the new state and boundless future of on-the-go in-car connectivity.
After all, the average driver spends 13.3 hours per week in the car.1 And this number is only rising. According to
global Waze navigation data, Waze saw a 27% increase in
both the number of drives and kilometers driven in the first
quarter of 2022 compared to the same period a year prior.2
So, if these cars are only going to become more
integrated with every aspect of our digital lives, what
does that mean for brands?
Don’t worry: we’ve got you covered. This report will show you why you need to build a third space strategy into your marketing mix now, and where the medium is heading next.
Part 2:
The third
space is an
underutilized
marketing
opportunity
There’s a misconception that people are driving less.
But the stats tell a different story. Despite recent
macroeconomic headwinds and altered post-pandemic
schedules, the desire to be on the road – or, at times,
just inside the car – has created an undisputed-yetunderutilized marketing opportunity to reach on-the-go
consumers through the third space.
U.S. drivers are far more active than they were last year, with
Waze data showing a 21% increase in drives and 15% increase
in miles driven in the first quarter of 2022 when compared to
the first quarter of 2021.3
Those active drivers create opportunities for split-second
buying decisions. Take dining for example: 87 percent of
U.S. drivers are on the road again:
21%
increase in drives in the first quarter of 2022
when compared to the first quarter of 2021.
15%
increase in miles driven in the first quarter of
2022 when compared to the first quarter of 2021.
Source: Waze internal data, U.S.
restaurant brand and agency leaders who responded to
a recent survey conducted by Restaurant Dive’s studioID
on behalf of Waze either agreed or strongly agreed that
consumers now make more impulse decisions about where
they will eat.4
Waze data also shows these drivers are navigating to more
businesses for both fun and functional purposes, which
creates ideal short-term opportunities for advertisers to
reach them in their cars – as well as impact awareness for
future outings:
● Waze navigation data shows trips to culture and
entertainment destinations were up 55.7% in the first
quarter of 2022 compared to the same period in 2021.
Navigations to travel category destinations were up 28.8%
and navigations to sports venues were up 76.8% over that
same period.5
● There was a 13% increase in Waze navigations to the
overall QSR/CDR restaurant category in the first quarter
of 2022 compared to the first quarter of 2021. Meanwhile,
Waze navigations to retail locations rose by 4.3% in that
same time period.6
And connected cars are just hitting their inflection point:
just over 60 percent of the U.S. population was driving
a connected car in 2021, and that number will grow to
roughly 70% by 2025.7
“Getting from point A to B (and the places in between)
by way of the car is still such an integral part of the
human experience,” says Andrew Kandel, Head of
North American Sales, Waze. “The uptick in navigations
reinforces that our needs, and means of fulfilling them,
haven’t changed. That makes it easy to see the through
line of how crucial connected cars will be in courting onthe-go consumers moving forward.”
It’s also important to remember we’re still in the early days
of the car’s shift from a functional space to a multi-use
space. Connected cars – whether it be a wifi-enabled
vehicle from our beachside scenario or the concept cars
of tomorrow that project to be miniature living rooms
on wheels – are part virtual assistant, part place where
people hang out to create memories, surf the web, and,
yes, make purchases.
“The uptick in navigations
reinforces that our needs,
and means of fulfilling them,
haven’t changed.”
Andrew Kandel
Director, Head of North American Sales,
Waze
Not seeing the connection yet? Consider these scenarios:
● The car as a creation zone: How many Shorts, TikToks
or Reels did you watch over the last year? And how
many of them were filmed inside cars? Astute social
media marketers can probably think of 10 such videos
they saw scrolling their feeds just this morning. The
comfort, intimacy and sometimes simply the opportunity
to create in peace means the car will be a key staging
ground for viral moments for years to come.
● The car as an extension of your home (and office):
In-car amenities like massage seats and wifi are being
offered in more models, as manufacturers react to
consumer desire for increased dwell time in vehicles,
whether that be for work or relaxation purposes. And
as cars develop more digital features (intelligent voiceenabled virtual assistance apps, streaming service
integrations and 5G connections will eventually be
commonplace) and automated features (driver assist
and – down the road – autopilot) over the next few
decades, brands will be compelled to focus on making
car interiors as comfortable and multifaceted as
possible to deliver new types of value and enjoyment
when passengers don’t have to focus on the road.
Essentially, connected cars will become an extension
of their owners’ homes – and yes, offices – in almost
every way possible.
● The car as mobile restaurant: Ninety-four percent of
restaurant brand and agency leaders who responded
to Restaurant Dive’s studioID survey conducted on
behalf of Waze agreed or strongly agreed that their
restaurant groups will have to upgrade their ability to
provide more convenient drive thru service in the next
12 months – a clear sign that people are using their
cars for mobile dining.8
And carmakers are already planning to seize the marketing
opportunity. Auto manufacturers are well aware of their
potential role in facilitating in-car shopping decisions. In May
2021, one major auto manufacturer filed a patent that uses the vehicle’s camera systems to read billboards and display
corresponding ads inside a vehicle.9 As conceived, this wouldallow in-car screens to bring an actionable experience
on-the-go consumers, potentially adding personalization if
a user persona or previous brand interactions had already
been established. While still conceptual, it shows clear
intent from automakers: they understand the untapped
value on-the-go consumers represent and are prioritizing
reaching them going forward.
These moments spent in connected cars will provide
brands a chance to better understand who their customers
really are. Smart devices have given marketers billions of
data points on what customers think and how they act.
Connected cars will now do the same thing – connecting
new dots while adding a new layer of mobility analysis to
the mix – allowing brands with access to this data to create
personalized content and experiences.
“More and more, drivers are relying on their connected cars to be their virtual assistants,” says Kandel. “They expect connected cars to know their habits, their preferences and their cravings. Brands who build experiences that fit seamlessly in this ecosystem are going to have huge opportunities going forward.
“Brands who build experiences
that fit seamlessly in this ecosystem
are going to have huge
opportunities going forward.”
Andrew Kandel
Director, Head of North American Sales,
Waze
Part 3:
What marketers
must do to
meet on-the-go
consumers as the
third space evolves
The third space opportunity is clear. But engaging in this most
intimate of marketing areas requires a thoughtful approach to
resonate positively with the in-car audience.
Brands need to carefully consider how they approach people
in this medium, how they partner with in-car technology
providers, and what sort of experiences they provide in order to both optimize their marketing spend and drivers’ experiences.Effectively, how can they be invited back to hitch another ride?
Takeaway #1:
To thrive in the
third space, you
must first earn
consumers’
permission
If you’ve read to this point and hadn’t stopped once
to say “but will people really want to be marketed to
in their cars?,” we’d be concerned. In many ways, the
car can feel more intimate than the home, especially
for the aforementioned solo commuters who may
experience their only alone time each day inside
their vehicles.
That’s why any brand marketing to people in the
car must establish implicit permission to be there.
This starts with data transparency. Consumers
expect companies to be clear about how their data is
being used. They also expect to be given assurances
their data is kept private and secure. With hardware
and internet as a service companies increasing their
focus on user privacy, this will be table stakes for
marketers in the third space.
Companies can then start building the relationship
by targeting personas in a privacy-compliant way with
valuable promotions that lean into contextual relevance.
For example, if the consumer is running low on gas, a
promotion for a fuel discount would be ideal.
As privacy-compliant, connected car data becomes more
prevalent, it will become easier to provide a legitimate
value exchange, making the user feel they’re getting a
greater benefit than what they’re sacrificing by inviting
monitoring technology into their private space. For
example, the chronicling of potentially hazardous road
events – like consistent hard breaking on certain stretches
of road or speeding in pedestrian zones – will lead to
safety changes over time that could save lives. On a less
consequential level, a similar value exchange will also
benefit quality brands that know how to translate data
into well-matched offers. This could include simple-yeteffective enticements like a meal discount three exits
down the road, a 20% off coupon at a nearby big box
retailer whose app the consumer was perusing last week,
or an invitation to listen to sponsored podcasts pertaining
to the driver’s interests.
There’s also data that shows on-the-go consumers will make
this trade to gain access to services they want:
● Nearly half of respondents to a study by Global Web
Index said they’d like to have reminders to buy something
later when they’re not driving – a desire met by Waze
ad’s “Save for Later” feature.10
● And brands are already seeing the value: 90% of
restaurant brand and agency leaders who responded to
the survey conducted by Restaurant Dive’s studioID said
in-car advertising was some form of effective (with 40%
finding it extremely effective). And 79% of retail brand and
agency leaders who responded to a survey conducted
by Retail Dive’s studioID on behalf of Waze said in-car
advertising is effective for driving in-store traffic.11
“The car is a sacred headspace for a lot of people, so
they’re going to have a low tolerance for annoyances,”
says Kandel. “But just as we’ve all learned previously with
mobile and voice assistant marketing, the key for brands
to be welcomed, revisited and perhaps eventually loved is
to always add value up front, and then add more nuanced
opportunities for engagement as you earn the trust of these
on-the-go consumers.”
Marketing leaders agree on value of
in-car advertising
□ 90% said in-car advertising was some form
of effective
□ 40% find it extremely effective
□ 79% said in-car advertising is effective for
driving in-store traffic
Takeaway #1:
To thrive in the
third space, you
must first earn
consumers’
permission
Drivers expect their car’s capabilities to match – or at leastmirror – their phones, including such features as
access to contacts, and more. In fact, they expect their
cars to work even harder, including such features as park orcourse-correct to avoid accidents when needed.
They’ll expect the same level of intuitive functionality
from marketers speaking to them through third space
integrations as well. Case-in-point: the mobile walle
Consumers have learned to crave tap-to-pay experiences
at point-of-sale terminals stores and integrated mobile
wallets for fast digital checkouts, too. To build long-term
relationships and optimize conversions, marketers need to
consider the experience they create as demand increases for
reduced friction – whether that’s through voice commands,
a minimal number of on-screen taps in a safe environment,
or features yet to be created.
There’s also data that shows on-the-go consumers will make
this trade to gain access to services they want:
● Nearly half of respondents to a study by Global Web
Index said they’d like to have reminders to buy something
later when they’re not driving – a desire met by Waze
ad’s “Save for Later” feature.10
● And brands are already seeing the value: 90% of
restaurant brand and agency leaders who responded to
the survey conducted by Restaurant Dive’s studioID said
in-car advertising was some form of effective (with 40%
finding it extremely effective). And 79% of retail brand and
agency leaders who responded to a survey conducted
by Retail Dive’s studioID on behalf of Waze said in-car
advertising is effective for driving in-store traffic.11
“The car is a sacred headspace for a lot of people, so
they’re going to have a low tolerance for annoyances,”
says Kandel. “But just as we’ve all learned previously with
mobile and voice assistant marketing, the key for brands
to be welcomed, revisited and perhaps eventually loved is
to always add value up front, and then add more nuanced
opportunities for engagement as you earn the trust of these
on-the-go consumers.”
Marketing leaders agree on value of
in-car advertising
□ 90% said in-car advertising was some form
of effective
□ 40% find it extremely effective
□ 79% said in-car advertising is effective for
driving in-store traffic
One way Waze does this is through CoPilot, which
natively integrates a brand into targeted users’ journeys.
Waze recently teamed up with children’s entertainment
company Spin Master to promote “PAW Patrol: The
Movie” through a Waze Ads CoPilot integration.12 The
campaign lended the voices of the movie’s characters
to user’s navigations, and also incorporated on-map
awareness of Target and Walmart locations where
users could stop to buy PAW Patrol merchandise. The
campaign also included takeover ads that – if clicked –
would reroute drivers to a retail location or allow them to
leave the app to make a purchase.
Creating this frictionless world will lead to getting a
larger piece of the nearly $4 billion in-car payments
expected to be processed by 2026.13
There’s also data that shows on-the-go consumers will make
this trade to gain access to services they want:
● Nearly half of respondents to a study by Global Web
Index said they’d like to have reminders to buy something
later when they’re not driving – a desire met by Waze
ad’s “Save for Later” feature.10
● And brands are already seeing the value: 90% of
restaurant brand and agency leaders who responded to
the survey conducted by Restaurant Dive’s studioID said
in-car advertising was some form of effective (with 40%
finding it extremely effective). And 79% of retail brand and
agency leaders who responded to a survey conducted
by Retail Dive’s studioID on behalf of Waze said in-car
advertising is effective for driving in-store traffic.11
“The car is a sacred headspace for a lot of people, so
they’re going to have a low tolerance for annoyances,”
says Kandel. “But just as we’ve all learned previously with
mobile and voice assistant marketing, the key for brands
to be welcomed, revisited and perhaps eventually loved is
to always add value up front, and then add more nuanced
opportunities for engagement as you earn the trust of these
on-the-go consumers.”
Marketing leaders agree on value of
in-car advertising
□ 90% said in-car advertising was some form
of effective
□ 40% find it extremely effective
□ 79% said in-car advertising is effective for
driving in-store traffic
Takeaway #3: Once you’ve
built your
third space foundation,
you must experiment
There’s also data that shows on-the-go consumers will make
this trade to gain access to services they want:
● Nearly half of respondents to a study by Global Web
Index said they’d like to have reminders to buy something
later when they’re not driving – a desire met by Waze
ad’s “Save for Later” feature.10
● And brands are already seeing the value: 90% of
restaurant brand and agency leaders who responded to
the survey conducted by Restaurant Dive’s studioID said
in-car advertising was some form of effective (with 40%
finding it extremely effective). And 79% of retail brand and
agency leaders who responded to a survey conducted
by Retail Dive’s studioID on behalf of Waze said in-car
advertising is effective for driving in-store traffic.11
“The car is a sacred headspace for a lot of people, so
they’re going to have a low tolerance for annoyances,”
says Kandel. “But just as we’ve all learned previously with
mobile and voice assistant marketing, the key for brands
to be welcomed, revisited and perhaps eventually loved is
to always add value up front, and then add more nuanced
opportunities for engagement as you earn the trust of these
on-the-go consumers.”
U.S. drivers are far more active than they were last year, with
Waze data showing a 21% increase in drives and 15% increase
in miles driven in the first quarter of 2022 when compared to
the first quarter of 2021.3
Those active drivers create opportunities for split-second
buying decisions. Take dining for example: 87 percent of
restaurant brand and agency leaders who responded to
a recent survey conducted by Restaurant Dive’s studioID
on behalf of Waze either agreed or strongly agreed that
consumers now make more impulse decisions about where
they will eat.4
Waze data also shows these drivers are navigating to more
businesses for both fun and functional purposes, which
creates ideal short-term opportunities for advertisers to
reach them in their cars – as well as impact awareness for
future outings:
● Waze navigation data shows trips to culture and
entertainment destinations were up 55.7% in the first
quarter of 2022 compared to the same period in 2021.
Navigations to travel category destinations were up 28.8%
and navigations to sports venues were up 76.8% over that
same period.5
● There was a 13% increase in Waze navigations to the
overall QSR/CDR restaurant category in the first quarter
of 2022 compared to the first quarter of 2021. Meanwhile,
Waze navigations to retail locations rose by 4.3% in that
same time period.6
Part 4:
So where
do we go
from here?
Let’s go back to that car parked near the beach. It’s a
scenario that provides multiple motivations at once to
illustrate the customer mindset:
● You, the driver, enjoying a great experience around
people you care about.
● A hungry, potentially impatient passenger, looking for
instant gratification.
● People in the back of the car engaging with the
outside world even though they’re in one of the
previously least accessible places in America.
Now imagine your marketing organization has strong
persona profiles for each of them – data these people
willingly provided because your brand gave them
significant value during repeated third space engagements
– that could drive everyone in the car to convert on multiple
occasions during the rest of the trip.
The third space is the final piece in today’s omnichannel
customer experience that makes all of this possible.
And building a third space strategy into your marketing
mix today is perhaps the most future-forward move a
marketing leader can make.
“When you think about the opportunities brands have
to make their case to consumers, almost nothing tops
the intimacy and opportunity of their vehicle,” says
Kandel. “It’s exciting to think about what innovations
brands who master in-car marketing will introduce to
the world, as they’ll not only be seen as visionaries, but
also reap more market share in what is destined to
become an extraordinarily important and competitive
marketing space
Sources
1 MediaScience, Waze Driving App Research, May 2022
2 Waze internal data
3 Waze internal data
4 studioID survey, commissioned by Waze, April 2022.
5 “Category Trends.” Waze, Accessed 27 May 2022, URL,
2022.
6 “Category Trends.” Waze, Accessed 27 May 2022, URL,
2022.
7 “US Connected Cars Forecast 2021.” eMarketer, 27
October 2021, URL. Accessed 7 June 2022.
8 studioID survey, commissioned by Waze, April 2022.
9 “Ford Wants to Bring Billboards Inside Your Car, Beamed
to the Dashboard Screen.” Motortrend, 17 May 2021, URL.
Accessed 7 June 2022.
10 “The Future of Connected Car Advertising.” Entercom, 6
January 2021, URL. Accessed 7 June 2022.
11 studioID survey, commissioned by Waze, April 2022.
12 “Spin Master’s PAW Patrol drives toy purchases at Target
and Walmart ahead of movie launch.” Waze, 2022, URL.
Accessed 7 June 2022.
13 “In-Vehicle Advertising to Fall Flat – Commerce Is The
New Revenue Stream For Car Makers.” ABI Research, 14
April 2021, URL. Accessed 7 June 2022.
14 studioID survey, commissioned by Waze, April 2022.
15 “As Pandemic Shifts Loyalties, Shoppers Favor Brands
that Share Their Values.” Newsweek, 2 February 2022,
URL. Accessed 7 June 2022
16 “Category Trends.” Waze, Accessed 27 May 2022, URL,
2022.
17 “Category Trends.” Waze, Accessed 27 May 2022, URL,
2022
.
18 studioID survey, commissioned by Waze, April 2022
19 “How driverless cars will change our world.” BBC, 29
November 2021, URL. Accessed 7 June 2022.
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