© 2008 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. Automotive Online Marketing Review Gene Cameron, VP Marketing/Media Solutions Scott Kane, Senior Research Manager October 7 th , 2008
Sep 13, 2014
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc. All Rights Reserved.
Automotive Online MarketingReview
Gene Cameron, VP Marketing/Media Solutions
Scott Kane, Senior Research Manager
October 7th, 2008
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.2
12
13
14
15
16
17
18
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008*
2008 U.S. new vehicle sales will total about 14million, the lowest annual result since 1993
Source: J.D. Power and Associates *JDPA Forecast
Total U.S. New Light Vehicle Sales
Record Year - 17.4 Million Units
To
tal N
ew
Lig
ht
Ve
hic
le S
ale
s (
Millio
ns
)
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.3
With higher gas prices, cars are now out-sellinglight trucks by a substantial margin
Car and Light Truck Share
0%
10%
20%
30%
40%
50%
60%
2000 2001 2002 2003 2004 2005 2006 2007 2008*
% o
f U
.S.
Ne
w L
Igh
t V
eh
icle
Sa
les
s
Car Share Truck Share
Source: J.D. Power and Associates *August YTD
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.4
Compact vehicles have gained share at the expenseof both Midsize and Large vehicles
Mix Based on Vehicle Size
0%
10%
20%
30%
40%
50%
60%
2000 2001 2002 2003 2004 2005 2006 2007 2008*
% o
f T
ota
l U
.S.
Ne
w L
Igh
t V
eh
icle
Sa
les
Compact Share Midsize Share Large Share
Source: J.D. Power and Associates*August YTD
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.5
80
20
264
344
0
50
100
150
200
250
300
350
400
2005 H1 2005 H2 2006 H1 2006 H2 2007 H1 2007 H2 2008 H1
OEMs Dealers and associations Top third-party sites
Online budgets are being reigned in this year. Reachingshoppers efficiently is more important than ever
Source:
Automotive Internet Advertising Spending
Ad
Sp
en
din
g (
Millio
ns
)
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.6
Automotive Internet usage (AIU) rates rise rapidlyas shoppers change their purchase behaviors
64% 64%67% 68%
70%
75%
47%
54% 53%
59%
60%60%
54%
40%
61%
26%
33%
43%
47%
10%
20%
30%
40%
50%
60%
70%
80%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
New Used
Automotive Internet Usage (AIU) Trends
New1 Vs. Used2 – Vehicle Buyers 10-Year Trend
1Based to new-vehicle buyers. Source: J.D. Power and Associates 1999-2008 New Autoshopper.com Studies2Based to used-vehicle buyers. Source: J.D. Power and Associates 1999-2007 Used Autoshopper.com Studies
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.7
When do buyers begin shopping for vehicles?
89/87days before
First shopped for any model
62/29days before
First shopped for the model they
ultimately purchased
74/56days before
First shopped for a model within the
vehicle segment which they purchased
Average/Median days
prior to purchase
Based to AIUs. Preliminary Unweighted Data
Source: J.D. Power and Associates 2008 Auto Buyer Clickstream Study
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.8
Number of Models Shopped Increasesin Month of Purchase
3.1Purchase Month
1.51 Month Prior
1.22 Months Prior
1.13 Months Prior
1.14 Months Prior
1.05 Months Prior
Number of Models
Shopped per BuyerTimeframe
Based to AIUs. Preliminary Unweighted Data
Source: J.D. Power and Associates 2008 Auto Buyer Clickstream Study
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.9
Use of Search is also growing, fueled by growth inthe use of Google
Used Search for Automotive Information
81%
84%
70%
75%
80%
85%
90%
2007 2008
% U
sin
g S
ea
rch
Based to AIUs. Source: J.D. Power and Associates 2007/2008 New Autoshopper.com Study
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.10
Online NVBs Increased their use ofAutomotive search terms the month of purchase
0 %
5 %
1 0 %
1 5 %
2 0 %
2 5 %
3 0 %
3 5 %
4 0 %
4 5 %
5 0 %
5 Months Prior4 Months Prior3 Months Prior2 Months Prior1 Months PriorP u r c h a s e
M o n t h
Retail Automotive Social Networking Search/Portal Directions
Categorized Search Terms throughout the Vehicle Purchase HorizonPercentage of the top 100 search terms by AIUs
3X Increase
Based to AIUs. Preliminary Unweighted Data
Source: J.D. Power and Associates 2008 Auto Buyer Clickstream Study
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.11
In 2008, use of Mobile access grew by 21%versus 2007
Mobile / Cell Phone Internet Access
15%
18%
0%
5%
10%
15%
20%
25%
30%
2007 2008
% W
ith
Mo
bil
e A
cc
es
s
Based to AIUs. Source: J.D. Power and Associates 2007/2008 New Autoshopper.com Study
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.12
Mobile should be on some OEMs’ top priorities,but of less concern to others
Based to AIUs buying each brand. Source: J.D. Power and Associates 2008 New Autoshopper.com Study
*Caution: Small Sample. Land Rover (n=85), Jaguar (n=61)
Land Rover* 50%
Porsche 43%
BMW 37%
Jaguar* 36%
Audi 35%
Suzuki 13%
Mercury 11%
Buick 11%
Hyundai 10%
Kia 8%
Mobile / Cell Phone Access
to the Internet
Top 5
Bottom 5
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.13
Consumer-generated content (CGC) remains animportant part of the online shopping process
Use of Consumer-Generated Content
69% 69%
50%
60%
70%
80%
2007 2008
% U
sin
g C
GC
Based to AIUs. Source: J.D. Power and Associates 2008 New Autoshopper.com Study
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.14
Vehicle Ratings and Reviews are by far the mostused type of CGC
Consumer-Generated Content Usage
10%
12%
18%
22%
38%
63%
0% 10% 20% 30% 40% 50% 60% 70%
Videos/Podcasts
Blogs
Online Forums/Chat
Rooms/Q&A Sites
Enthusiast Sites
Dealer
Ratings/Reviews
Vehicle
Ratings/Reviews 95%
87%
81%
78%
69%
66%
% Finding
Helpful*
*Based to AIUs who used each type of CGC
Source: J.D. Power and Associates 2008 New Autoshopper.com
Study
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.15
The model purchase decision is impacted byExpert and Consumer Ratings & Reviews
Based to AIUs using either Consumer or Expert Ratings/Reviews, but not the other.
Source: J.D. Power and Associates 2008 New Autoshopper.com Study
Model Purchased Share Model Purchased Share
Toyota Camry 3.9% Honda Accord Sdn 3.7%
Honda Accord Sdn 3.3% Nissan Altima 3.6%
Nissan Altima 3.2% Toyota Camry 3.2%
Toyota Yaris 2.8% Honda CR-V 2.9%
Toyota Corolla 2.6% Toyota Prius 2.5%
Toyota Prius 2.3% Honda Civic Sdn 2.1%
Honda Pilot 2.2% Chevrolet Silverado LD 2.0%
Ford Focus 2.2% Ford F-150 LD 2.0%
Honda Civic Sdn 2.2% BMW 3 Series 1.9%
Ford F-150 LD 2.1% Toyota Corolla 1.7%
Shoppers Using Consumer
Ratings/Reviews (Not Expert)
Shoppers Using Expert
Ratings/Reviews (Not Consumer)
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.16
Online NVBs are avid users of Social and Video Sites
37120%74%go.com
1841%1%hulu.com
3471%3%twitter.com
1,5411%12%abc.com
26119%49%facebook.com
19635%68%myspace.com
21034%71%youtube.com
NVB Reach/IBP Reach IBP NVB
Index% Reach
First 6 months 2008
Based to Online New Vehicle Buyers. Preliminary Unweighted Data
Source: J.D. Power and Associates Total Online Media Behavior
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.17
As a percentage, online submissions hold relativelysteady year-over-year
AIUs that Submitted Request for Quote
29.3%31.7%31.6% 32.1% 31.0%
0%
10%
20%
30%
40%
50%
2004 2005 2006 2007 2008
% R
eq
ue
sti
ng
Qu
ote
Based to AIUs. Source: J.D. Power and Associates 2004-2008 New Autoshopper.com Study
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.18
Realistically, 1 of 5 AIUs will never submit aRequest for Quote
Based to AIUs. Source: J.D. Power and Associates 2008 Follow-Up Study to NAS
29%
49%
22%
Submit Request
May be open to Quote Process
Not Likely to Submit a Quote• Prefer to negotiate price
in person or by phone
• Already have
relationship with dealer
and know where they’ll
next purchase
• Use alternate
purchasing/discount
program
• Etc…
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.19
Reasons Why Shoppers Did Not Submit a Request for Quote
50%
29%
15%
7% 7%
0%
20%
40%
60%
Did not want to be
contacted by
dealer
Wouldn’t get
valuable / accurate
information
Privacy or Identity
Theft concerns
Wouldn’t get a
timely response
Tried it before and
didn’t like it
Fear of dealer contact and doubts about receiving valuableor accurate information deters shoppers from submitting requests
Based to AIUs that did not submit a request for quoteSource: J.D. Power and Associates 2008 Follow-Up Study to NAS
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.20
Request for Quote - Dealer Response Ratings
6.4
7.2
0 2 4 6 8 10
Completeness of
Response
Timeliness of
Response
Satisfaction Score
Providing quality responses to requests is at theheart of the problem
Based to AIUs that submitted a request for quoteSource: J.D. Power and Associates 2008 Follow-Up Study to NAS
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.21
Active Online Shoppers have a relatively limiteduse of sites within type
2.6Dealer Sites
3.1OEM Sites
3.3Third Party Sites
Average Number of Sites Visited
Active Online New Vehicle Buyers in
6 Months Prior to Purchase by Type
of Site
Based to AIUs. Preliminary Unweighted Data
Source: J.D. Power and Associates 2008 Auto Buyer Clickstream Study
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.22
Pricing/Incentives/MSRP 40%Research Info/Options, Features,
Specs43% Inventory Locator 44%
Reviews/Forums/Ratings 21% Pricing/Incentives/MSRP 20% Pricing/Incentives/MSRP 35%
Compare Vehicles 17% Equip a Vehicle 17%Research Info/Options, Features,
Specs14%
Research Info/Options, Features,
Specs12% Navigation/Easy to Use 15% Navigation/Easy to Use 10%
Navigation/Easy to Use 11% Inventory Locator 7% Request Quote/Contact Dealer 7%
Trade-In Value 8% Vehicle Images/360 Tool/Video 7% Find a Dealer 6%
Vehicle Images/360 Tool/Video 2% Compare Vehicles 4% Vehicle Images/360 Tool/Video 4%
Request Quote/Contact Dealer 1% Find a Dealer 4% Compare Vehicles 2%
Find a Dealer 1%Monthly Payment
Calculator/Estimate3%
Monthly Payment
Calculator/Estimate1%
Monthly Payment
Calculator/Estimate1% Request Quote/Contact Dealer 2% Equip a Vehicle 1%
Top 10 Most Useful Content by Type of Site
Independent Web Sites Manufacturer Web Sites Dealer Web Sites
What do shoppers find most useful about differenttypes of sites?
Based to AIUsSource: J.D. Power and Associates 2008 New Autoshopper.com Study
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.23
Online New Vehicle Buyers Visit a “Long Tail” ofThird-Party Sites
Top Third Party Sites Share of Total Third Party Sessions
Based to AIUs. Preliminary Unweighted Data
Source: J.D. Power and Associates 2008 Auto Buyer Clickstream Study
0 %
2 %
4 %
6 %
8 %
1 0%
1 2%
1 4%
autot rad
er .co
m
edmunds .co
mkb
b.com
car s. com
autos .msn. com
autos .yahoo.com
consumer repor ts .org
autos .ao
l .co
m
carm
ax. com
nad
aguides .co
m
car sdi rec t. com
dmv .org
automot ive
.com
autobytel .co
m
car fax .c o
mvehi x. com
autoweb
.com
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.24
Independent
Site VisitorsEdmunds.com
Kelley Blue
BookCars.com Vehix.com
Pricing/Incentives/MSRP 40.2% 47.9% 53.7% 28.5% 7.8%
Reviews/Forums/Ratings 20.9% 29.6% 8.4% 13.5% 5.3%
Compare Vehicles 17.4% 16.1% 7.0% 24.3% 59.3%
Research Info/Options, Features, Specs 12.1% 12.5% 6.0% 9.8% 13.5%
Navigation/Easy to Use 11.0% 8.4% 7.4% 27.6% 16.3%
Trade-In Value 7.8% 4.4% 27.0% 1.9% 0.0%
Vehicle Images/360 Tool/Video 1.5% 0.6% 0.1% 8.1% 5.3%
Request Quote/Contact Dealer 1.5% 1.6% 0.2% 2.9% 1.3%
Find a Dealer 1.4% 1.0% 0.2% 8.4% 3.4%
Monthly Payment Calculator/Estimate 0.8% 0.7% 0.8% 4.7% 1.2%
Top 10 Most Useful Site Content
Carving out a niche is important to growing andsustaining a useful site
Based to AIUs visiting each site who thought that site was most usefulSource: J.D. Power and Associates 2008 New Autoshopper.com Study
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.25
Getting more traffic to the brand site is great, aslong as it’s the right traffic
Visitation: Based to AIUs. Close Rate: Based to AIUs visiting each site.
Source: J.D. Power and Associates 2008 New Autoshopper.com Study
Top 15 Visited OEM Sites—Year-Over-Year Analysis
-15%
-10%
-5%
0%
5%
10%
15%
20%
-40% -30% -20% -10% 0% 10% 20% 30%
% Change in Close Rate
% C
ha
ng
e i
n V
isit
ati
on
SaturnNissan
Volkswagen
JeepHyundai
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.26
Summary Observations
• Difficult market
– Tighter sales
– Major shifts in purchase patterns by Segment
• Increasing Internet use with shifts in patterns, fragmentation
– Consideration counts are not expanded for models or sites used for shopping
– Third Party Sites exhibit long tail, suggesting fragmentation
– CGC, Mobile, Video, ?
– Shoppers/Buyers in new territory, use of internet
• Request for Quote is only effective if it responds to shoppers, is
complete, not just rapid
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc.
All Rights Reserved.27
Summary Observations
• Challenge to become more efficient and effective
• Targeting more important than ever, customize targeting
– Join the conversation
Common interest
Add value
Build engagement
Relevant traffic that converts
• Understand shoppers, position your site and marketing to give
them a reward
• Leverage information throughout the organization
© 2008 J.D. Power and Associates,
The McGraw-Hill Companies, Inc. All Rights Reserved.
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