steve witten presents to jd power and associate automotive internet roundtable

© 2007 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.

Online Automotive Shopping

Gene CameronVice President, Media Marketing Solutions

Steve WittenExecutive Director, Automotive Research

2© 2007 J.D. Power and Associates,The McGraw-Hill Companies, Inc. All Rights Reserved.

64% 64%67% 68%

70%

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

New Used

1Based to new-vehicle buyers. Source: J.D. Power and Associates 1999-2007 New Autoshopper.com Studies2Based to used-vehicle buyers. Source: J.D. Power and Associates 1999-2007 Used Autoshopper.com Studies

Automotive Internet Usage (AIU) Trends New1 – Vs. Used2 – Vehicle Buyers 9-Year Trend

Automotive Internet usage (AIU) rates continue to increase

^Preliminary Data

% o

f A

ll B

uye

rs


Method that Led to Used Vehicle Purchased

14%11% 10%

5% 5%

11% 12%16%

23%

9%

0%

5%

10%

15%

20%

25%

30%

Newspaper Classifieds Classified Ad Magazines Online Classifieds

Based to late model used-vehicle buyersSource: J.D. Power and Associates 2003-2007 Used Autoshopper.com Studies

23% of late-model used vehicles sold are sourced online

2003 2004 2005 2006 2007^

^Preliminary Data

% o

f A

ll B

uye

rs


Percent of New-Vehicle BuyersSubmitting a Request for Online Dealer Referral

20% 21% 21% 22%

0%

10%

20%

30%

40%

50%

60%

2004 2005 2006 2007

Based to new-vehicle buyersSource: J.D. Power and Associates 2004-2007 New Autoshopper.com Studies

Request for online quote is not growing for new-vehicle sales

% o

f A

ll B

uye

rs

Visited DealerFound Online

39%


73%77%77%

80%79%

82%83%89%87%86%

84%

76%73%

83%

30%

40%

50%

60%

70%

80%

90%

100%

2001 2002 2003 2004 2005 2006 2007

Independent site Manufacturer site

1Based to AIUs. Source: J.D. Power and Associates 2001-2007 New Autoshopper.com Studies

Types of Web Sites Visited by New-Vehicle Online Shoppers

Manufacturer sites are more popular than independent sites among new-vehicle buyers

% o

f A

IU’s


47%48%51%

58%61%62%

66%

46%46%45%40%

36%34%31%

0%

10%

20%

30%

40%

50%

60%

70%

2001 2002 2003 2004 2005 2006 2007

Independent Sites Manufacturer Sites


First Auto Site Visitedby New-Vehicle Online Shoppers

Manufacturer sites are just as likely as independent sites to be the first site visited

% o

f A

IU’s


50% 51%

41% 40%

54%59%

62%64%68%

41%39%

31%28%

36%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2001 2002 2003 2004 2005 2006 2007

Independent site Manufacturer site


Most Useful Type of Site Visited by New-Vehicle Online Shoppers

Manufacturer sites are catching up to the independent sites in being “most useful”

% o

f A

IU’s


Percent of AIU's Using Consumer Generated Media

10%

3%

4%

5%

8%

12%

12%

21%

66%

5%

6%

6%

8%

9%

16%

16%

18%

64%

0% 10% 20% 30% 40% 50% 60% 70%

Networking Sites

Video/Podcasts

Chat Rooms

Photo-share Sites

Blogs

Q&A Sites

Forums/Boards

Enthusiast Sites

Consumer Ratings

New-Vehicle AIU's

Used-Vehicle AIU's

Based to AIUsSource: 2007 J.D. Power and Associates New Autoshopper.com & Used Autoshopper.com Studies

Consumer ratings are the most frequently used consumer generated media

55% = Very Helpful


The Vehicle Shopping Process


The Funnel Still Exists

Consideration

Purchase

Awareness

Familiarity

Visit Dealer

→ Make them aware of your model

→ Show your model is for them

→ Convince them to consider your model

→ Convince them to shop your dealership

→ Convince them to purchase your vehicle

The Goals


Different media channels are more effective at distinct stages of the shopping funnel

Consideration

Purchase

Awareness

Familiarity

Visit Dealer

Marketing Channel

TV

Ad

s

Ma

ga

zines

Intern

etN

ew

sp

ape

rs

Ev

ents


Upper funnel marketing requires different metrics

Consideration

Purchase

Awareness

Familiarity

Visit Dealer

→ Change in awareness

→ Improvement in familiarity

→ Improvement of opinion

→ Click on ad

→ Click to site

→ Build a vehicle

→ Search inventory

→ Search for dealer info

→ Request a quote

Measures of Success


Consumer Shopping Process

1. Should I be in market?– Resale value/condition of current vehicle– Change in vehicle needs– “Gotta have” new model

2. Which models meet my needs?– Price, styling, reliability, size– Previous experience– Advice from friends

3. Where should I purchase?– Price– Convenient location– Service


Purchase Milestones of New-Vehicle AIU's

012345678910111213141516

Weeks Before Purchase (Mean)

Decide on typeof vehicle

Start visitingdealers

The new-vehicle shopping process takes about three months for the average AIU

Decide it was time to purchase

Shop vehicleson the Internet

Start activelyresearching vehicles

Decide onmodel

Purchasenew vehicle

14.7

11.7

11.0

10.4

7.6

6.3

0

Source: 2007 J.D. Power and Associates New Autoshopper.com Study. Based to AIUs.


Purchase Milestones of Used-Vehicle AIU's

012345678910111213141516

Weeks Before Purchase (Mean)

Decide on typeof vehicle

Start visitingdealers

The process is not much different for late-model used vehicle buyers

Decide it was time to purchase

Shop vehicleson the Internet

Start activelyresearching vehicles

Decide onmodel

Purchasenew vehicle

14.9

13.8

10.9

9.9

10.1

6.9

0

Source: 2007 J.D. Power and Associates Used Autoshopper.com Study. Based to AIUs. Preliminary Data


One-third of new-vehicle buyers purchase within one month of deciding they need a new vehicle

Shopping Timeline of AIU's

8%

15%

10%

2%

18%

22%

13%13%

0%

5%

10%

15%

20%

25%

53 ormore

25 to 52 21 to 24 9 to 20 5 to 8 4 3 to 2 1 week

Weeks Before Purchase

Decide time to buy

34% Shopping Process One Month or less

27% Shopping Process Over Six Months



About half of AIU’s don’t begin their online shopping until one month before purchase

Online Vehicle Shopping Timeline of New-Vehicle AIU's

1%

9%

6%

18% 17%16%

17%16%

0%

5%

10%

15%

20%

25%

30%

53 ormore

25 to 52 21 to 24 9 to 20 5 to 8 4 3 to 2 1 week

Weeks Before Purchase

Use Internet forvehicle info

49% Online-ShoppingOne Month or less

16% Online-Shopping

Over Six Months



Over one-third of new-vehicle buyers seriously consider only one model

Number of Vehicles Considered

34%

30%

20%

16%

0%

5%

10%

15%

20%

25%

30%

35%

40%

One Two Three Four or More

Loyal

Source: 2007 J.D. Power and Associates Escaped Shopper Study


Those with only one vehicle on their shopping list are less likely to use the internet to vehicle shop

AIU Rate by Number of Vehicles Considered

48%

74%82%

88%

0%

20%

40%

60%

80%

100%

One Two Three Four or More

Number of Vehicles Considered

Use

d t

he

Inte

rnet

to

Sh

op

Source: 2007 J.D. Power and Associates Vehicle Shopping Study


Those shopping several models are more likely to find independent sites more useful

Most Useful Type of Web Site Visited by Number of Vehicles Considered

38%

51%

10%

54%

38%

7%

0%

20%

40%

60%

Independent Manufacturer Dealer

Web Site Type

% M

ost

Use

ful

Only One More than One

Source: 2007 J.D. Power and Associates Vehicle Shopping Study. Based to AIUs.


Online Vehicle ShoppingAnd Dealer Visits


Internet's Influence on Decision Not to Purchase a Vehicle

Internet Influence

22%

Internet Did Not Influence

78%

Nearly one-fourth of new-vehicles shopped and not bought are rejected due to online information

Source: 2007 J.D. Power and Associates Escaped Shopper Study Base: Vehicles rejected


Price, gas mileage, exterior styling, and reliability information is important in online shopping decisions

Reasons for Rejecting Vehicleby AIU's NOT Shopping at a Dealership

14%

15%

15%

22%

40%

0% 20% 40% 60%

Reliability

Gas Mileage

Exterior Styling

Monthly Payment

Price too high

% Indicating as Rejection ReasonSource: 2007 J.D. Power and Associates Escaped Shopper Study Base: Vehicle rejecters


Compete – PIN Data Match

Online Behavioral Analysis of Vehicle Buyers


Vehicle Buyer Click Stream Methodology

Compete Panel4.4M Records

Power Information NetworkDealers in Markets of 70% Sales

Vehicle Buyer Info

6/2005 – 7/2007

Surname &Address

Match

Third party

~73,700 Matches: with continuous click stream data 6 months prior to purchase (60% new-vehicle purchases, 40% used)

Internet activity

12/2004 – 7/2007

Purchase P - 1 P -2 P – 3… P - 6

Site A

Site B

Site C


33% of those who will visit a 3rd-party site, will do so at least six months before purchase

Cumulative Build of New-Vehicle

Buyer Traffic to 3rd-Party Sites

0%

20%

40%

60%

80%

100%

6 Months 5 Months 4 Months 3 Months 2 Months PurchaseMonth

Time Before Vehicle Purchase

Pe

rce

nt

of

Sit

e T

raff

ic

Previous Visitors Net New Visitors

Base: New vehicle buyers with internet access visiting a 3rd-party automotive site NOTE: Preliminary data

100%

78%

69%

59%

47%

33%


30% of those who will visit an OEM site, will do so at least six months before purchase

Cumulative Build of New-Vehicle Buyer Traffic to OEM Sites

0%

20%

40%

60%

80%

100%

6 Months 5 Months 4 Months 3 Months 2 Months PurchaseMonth

Time Before Vehicle Purchase

Pe

rce

nt

of

Sit

e T

raff

ic

Previous Visitors Net New Visitors

Base: New vehicle buyers with internet access visiting an OEM site NOTE: Preliminary data

100%

79%

67%

56%

42%

30%


Auto sites are high in both composition and reach

0

100

200

300

400

500

600

700

800

900

1000

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Reach of Vehicle Buyers

Co

mp

os

itio

n In

de

x

Dealer Sites

OEM Sites

3Rd Party Sites

Calendar/Address Books

Web Site Composition and Reach Among Vehicle Buyers

Base: All vehicle buyers with internet access NOTE: Preliminary data

Search


Top 10 Categories in Composition of Vehicle Buyers

323

335

344

376

413

416

652

657

686

944

0 100 200 300 400 500 600 700 800 900 1000

Sports News

Automotive Information

Vacation Packages

Ecards

Automotive Manufacturer

Business News

Automotive Dealers

Email

Tax Services

Calendars/Address Books

Composition IndexBase: All vehicle buyers with internet access NOTE: Preliminary data

Reach

27%

21%

55%

22%

21%

39%

31%

11%

54%

25%

Auto shoppers can be found on non-auto sites


Summary

• Manufacturer and independent sites have reached parity– Dealer sites will be next

• The internet is the only medium that works efficiently across the entire shopping funnel

• Significant online shopping activity occurs six months out

• Highest bump in online auto shopping occurs within the month of purchase

• Purchase and web-wide behavioral data are now being linked for the first time creating new marketing insights