Google Automotive Buying Flow

The Automotive Buying Processy g

From a Search PerspectivePerspective

Proprietary to Google and Compete, October 2007

Objectives and Methodology

ObjectiveUnderstand the key online activities that consumers undertake prior to new vehicle purchases

ApproachApproach1. 1,837 Automotive Buyers identified through Survey

2. The buyer’s online behavior was analyzed during the i th i t hsix months prior to purchase

3. The following behaviors were studied and quantified

Search engine usage

Third party automotive website visitation

OEM website visitation

2


Key Findings

The Automotive Buying Process has compressed substantially

Search is a major contributor to consumer research throughout the buying process

Search is among the most valuable M di S f BMedia Sources for Buyers

3


The Online Auto Channel O li A t ti A ti it D i th 6 th i t Online Automotive Activity During the 6 months prior to Purchase

4


Nearly Every Buyer Uses the Online Channel

• Over 80% of New Vehicle Buyers visited an OEM site within 6 months of purchase

• Over 90% of buyers in general visited an OEM and/or Third party Site

Pre-Purchase Automotive Category Visitation (Share of Buyers that visited the category of sites during the 6 months prior to purchase)

82% 78%

91%

74%82%

90%

OEM Sites 3rd PartyAutomotive

Sites

3rd Party and/or

OEM sitesSites OEM sites

Share of New Car Buyers Share of Used Car Buyers

5


Search is a Critical Piece of the Online Channel

• 66% of OEM Site visitors who bought new vehicles were referred by search during the 6 months prior to purchase

Pre-Purchase Share of Visitors Referred by Search(Share of Buyers Visiting each category that were referred by search during the 6 month period)

66%

17%

24% 25%

17%

OEM Sites 3rd PartyAutomotive

SitesSites

New Car Buyers Referred by Search Used Car Buyers Referred by Search

6


New Vehicle Buyers Use More Branded Terms

• ¾ of search referrals amongst new vehicle buyers were from high • ¾ of search referrals amongst new vehicle buyers were from high level brand terms

• Used buyers were more likely to use generic search terms

Type of Keyword Phrase used by Buyers Before Purchase(Share of search referrals during the 6 month period)

78%

57%

22%

43%

Brand or Model Generic

Share of Searches for New Buyers Share of Searches for Used BuyersShare of Searches for New Buyers Share of Searches for Used Buyers

7


The Online Research FlowCh i B h i Th h t th B i PChanges in Behavior Throughout the Buying Process

8


The Automotive Research Process Has Compressed

• 65% of vehicle buyers in general indicated that they researched for one month or less

Estimated Research Time Prior to Purchase – All Buyers(Share of Buyers indicating how long they researched their purchased)

29%

17%19%

%

17%

How long did you 10%7%

Less than Around Around Around Around More than

How long did you conduct research before making your recent <Make> purchase?

N= 1,837

1 week2 weeks1 month2 months3 months3 months

9



• 59% of new vehicle buyers indicated they researched for one month or less

Estimated Research Time Prior to Purchase – New Buyers(Share of Buyers indicating how long they researched their purchased)

21%

16%

22%

20%

16%

12%

9%How long did you



N= 879


10



• 70% of used or pre-owned vehicle buyers indicated that they researched for one month or less

Estimated Research Time Prior to Purchase – Used Buyers(Share of Buyers indicating how long they researched their purchased)

36%

18%16%15%

How long did you

9%6%



N= 958


11


As time to purchase shortens, more New Vehicle Buyers visit Third Party and OEM sites

• Visitation to OEM and Third party sites increased more than 40ppts from six months to one month prior among new vehicle buyers

Category Visitation By Pre-Purchase Period - New Vehicle Buyers (Share of new vehicle buyers visiting the category by time period)

50%

60%

70%

20%

30%

40%

50%

0%

10%

6 Months Prior

5 Months Prior

4 Months Prior

3 Months Prior

2 Months Prior

Within the Month

of Purchase

12

of PurchaseOEM Sites 3rd Party

Automotive Sites


More Used Vehicle Buyers tend to visit Third Party sites than OEM sites

• Visitation to Third party sites increased more than 50ppts from six months to one month prior among used and pre-owned vehicle buyers

Category Visitation By Pre-Purchase Period - Used Vehicle Buyers (Share of used vehicle buyers visiting the category by time period)

buyers

50%

60%

70%

20%

30%

40%

50%

0%

10%

6 Months Prior

5 Months Prior

4 Months Prior

3 Months Prior

2 Months Prior

Within the Month

of Purchase

13


Automotive Sites


New Buyers view more information on OEM Sites as they come closer to Purchase

• Content usage on both OEM sites and Third Party sites increase substantially in the month prior to purchase

Page Views by Pre-Purchase Period- New Vehicle Buyer (Page Views for each category by time period)

200

250

300

50

100

150

200

‐

50

6 Months Prior

5 Months Prior

4 Months Prior

3 Months Prior

2 Months Prior

Within the Month

of Purchaseof PurchaseOEM Sites 3rd Party

Automotive Sites 14


Used Vehicle Buyers utilize Third Party Automotive sites more than OEM sites

• Page Views on 3rd party sites increase substantially as time to purchase shortens

Page Views by Pre-Purchase Period- Used and Pre-Owned Vehicle Buyer (Page Views for each category by time period)

200

250

300

50

100

150

200

‐

50

6 Months Prior

5 Months Prior

4 Months Prior

3 Months Prior

2 Months Prior

Within the Month

of Purchaseof PurchaseOEM Sites 3rd Party

Automotive Sites 15


New Vehicle Buyers spend more time on OEM and 3rd Party sites as they come closer to Purchase

• New Vehicle Buyers spend more time on the 3rd party sites when they are one month prior to purchase

Time On Category - New Vehicle Buyer (Number of minutes spent on category sites by period)

60

70

80

20

30

40

50

‐

10

6 Months Prior

5 Months Prior

4 Months Prior

3 Months Prior

2 Months Prior

Within the Month

of Purchase

16


Automotive Sites


Used Vehicle Buyers spend more time on Third Party Automotive sites Compared to OEM sites

• Used Buyers spend significantly more time on 3rd party sites within the month of purchase

Time On Category - Used Vehicle Buyer (Number of minutes spent on category sites by period)

60

70

80

20

30

40

50

‐

10

6 Months Prior

5 Months Prior

4 Months Prior

3 Months Prior

2 Months Prior

Within the Month

of Purchase

17


Automotive Sites


Upper and Lower Funnel: Vehicle Buyers Use Search

awareness

Share of New Buyers Referred by Search To OEM Sites

awareness

interest

6 Months 22%

15%3 Months

consideration

test-drive

19%

42%

2 Months

1 Month

purchase 41%1 Week

Search is a critical activity at every stage of the buying process

18


The Automotive Research ToolsU d t di H A t ti B R hUnderstanding How Automotive Buyers Research

19


Search Engines are the Third Most Used and Third Most Important Media Source

79%OEM Site39%OEM Site

Media Sources Used Prior To Purchase (Share of Buyers indicating they used media source)

Media Source Importance – Top 2 Box(Share of buyers indicating source was important )

84%

75%

65%

3rd Party Site

Search Engine

News/Mag. Article

37%

32%

14%

3rd Party Site

Search Engine

News/Mag. Article

59%

49%

51%

Flyer/Brochure

TV Ad

News/Mag. Ad

12%

11%

10%

Flyer/Brochure

TV Ad

News/Mag. Ad

48%

65%

36%

Radio Ad

TV Review

Billboard

3%

3%

2%

Radio Ad

TV Review

Billboard

48%

46%

Online Banner

Online Video

1%

1%

Online Banner

Online Video

N= 1,837

20

1) Which of the following media sources did you use to find automotive related information to help you make your recent <Make> purchase? (Multi-Select)2) Among the media sources you indicated, please indicate the relative importance of each? (Single Select Scale – 1 to 5 rating)

,83


The Value of Search Engines Ranks Among That of OEM Sites and Third Party Sites

OEM Site

3rd Party Site

4 1

4.3More Important

Search Engine

News/Mag. Article

Flyer/BrochureR di Ad

TV Review3.9

4.1

Flyer/Brochure

TV Ad

News/Mag. Ad

Radio Ad

Online Video3.5

3.7Relative Importance

of Media Source

Online Banner

3.1

3.3

Billboard

2.7

2.9

0 00 0 05 0 10 0 15 0 20 0 25 0 30 0 35 0 40

Less Important

Low Usage High Usage0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40

21

Share of Buyers Utilizing Media Source


Test Drives and Past Experience are highly utilized resources and the most important

Resource Used Prior To Purchase (Share of Buyers indicating they used resource)

Resource Importance (Share of buyers indicating resource was important )

56%Dealer Visit

Test

73%Dealer Visit

Test53%

50%

Test Drive

Past Experience

91%

91%

Test Drive

Past Experience

39%

33%

Consumer Reviews

Friends, Family, Colleagues

86%

76%

Consumer Reviews


1) Which of the following resources did you utilize to find automotive related information to help you make your recent <Make> purchase?

N= 1,837

22

1) Which of the following resources did you utilize to find automotive related information to help you make your recent <Make> purchase?2) Among the resources you indicated, please indicate the relative importance of each?


Test Drives and Past Experience are the most valuable resources for Buyers

More ImportantTest Drive

Past Experience

4.60

4.40

4.50

Relative Importance of Resource

Consumer Reviews

4.30

D lFriends Family4 10

4.20

Less Important

Low Usage High Usage

Dealer Visit


4.00

4.10

0 30 0 35 0 40 0 45 0 50 0 55 0 60

23

Share of Buyers Utilizing Resource0.30 0.35 0.40 0.45 0.50 0.55 0.60


Key Findings

24


Key Findings

The Automotive Buying Process has compressed substantially• Nearly 60% of new Buyers researched their purchase for one month or less

before buying

• Over 70% of Used and Pre-Owned buyers researched their purchase for one month or less

Search is a major contributor to the research process throughout the buying process

• Nearly ¾ of new Vehicle Buyers used search at some point in the process dand were referred to an OEM Site or 3rd Party Automotive Site

• In the last month prior to purchase, 42% of New Vehicle Buyers used search

Search is among the most valuable Media Sources for Buyers• Search was valued at near parity with OEM Sites and 3rd Party Automotive

Sites Sites

25


Q & AQ & A

Seth Barron Industry Operations, Automotive

[email protected]

Jeremy Crane, Director of Search and Online Media

[email protected]

26
