jd power and associates automotive online marketing review

© 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 7th, 2008


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1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008*

2008 U.S. new vehicle sales will total about 14 million, 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

Tota

l New

Lig

ht V

ehic

le S

ales

(Mill

ions

)


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With higher gas prices, cars are now out-selling light 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

. New

LIg

ht V

ehic

le S

ales

s

Car Share Truck Share

Source: J.D. Power and Associates *August YTD


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Compact vehicles have gained share at the expense of 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 Tot

al U

.S. N

ew L

Ight

Veh

icle

Sal

es

Compact Share Midsize Share Large Share

Source: J.D. Power and Associates *August YTD


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. Reaching shoppers efficiently is more important than ever

Source:

Automotive Internet Advertising Spending

Ad

Spen

ding

(Mill

ions

)


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Automotive Internet usage (AIU) rates rise rapidly as 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


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When do buyers begin shopping for vehicles?

89/87 days before

First shopped for any model

62/29 days before

First shopped for the model they ultimately purchased

74/56 days before

First shopped for a model within the vehicle segment which they purchased

Average/Median days prior to purchase

Based to AIUs. Preliminary Unweighted DataSource: J.D. Power and Associates 2008 Auto Buyer Clickstream Study


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Number of Models Shopped Increases in Month of Purchase

TimeframeNumber of Models Shopped per Buyer

5 Months Prior 1.0

4 Months Prior 1.1

3 Months Prior 1.1

2 Months Prior 1.2

1 Month Prior 1.5

Purchase Month 3.1Based to AIUs. Preliminary Unweighted DataSource: J.D. Power and Associates 2008 Auto Buyer Clickstream Study


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Use of Search is also growing, fueled by growth in the use of Google

Used Search for Automotive Information

81%

84%

70%

75%

80%

85%

90%

2007 2008

% U

sing

Sea

rch

Based to AIUs. Source: J.D. Power and Associates 2007/2008 New Autoshopper.com Study


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Online NVBs Increased their use of Automotive search terms the month of purchase

0%5%

10%15%

20%25%

30%35%

40%45%

50%

5 Months Prior 4 Months Prior 3 Months Prior 2 Months Prior 1 Months Prior PurchaseMonth

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



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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 M

obile

Acc

ess

Based to AIUs. Source: J.D. Power and Associates 2007/2008 New Autoshopper.com Study


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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


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Consumer-generated content (CGC) remains an important part of the online shopping process

Use of Consumer-Generated Content

69% 69%

50%

60%

70%

80%

2007 2008

% U

sing

CG

C

Based to AIUs. Source: J.D. Power and Associates 2008 New Autoshopper.com Study


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Vehicle Ratings and Reviews are by far the most used 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/ChatRooms/Q&A Sites

Enthusiast Sites

DealerRatings/Reviews

VehicleRatings/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


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The model purchase decision is impacted by Expert 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 ShareToyota 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)


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Online NVBs are avid users of Social and Video Sites

First 6 months 2008

% Reach Index

NVB IBP NVB Reach/IBP Reachgo.com 74% 20% 371

youtube.com 71% 34% 210

myspace.com 68% 35% 196

facebook.com 49% 19% 261

abc.com 12% 1% 1,541

twitter.com 3% 1% 347

hulu.com 1% 1% 184

Based to Online New Vehicle Buyers. Preliminary Unweighted DataSource: J.D. Power and Associates Total Online Media Behavior


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As a percentage, online submissions hold relatively steady 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

eque

stin

g Q

uote

Based to AIUs. Source: J.D. Power and Associates 2004-2008 New Autoshopper.com Study


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Realistically, 1 of 5 AIUs will never submit a Request for Quote

Based to AIUs. Source: J.D. Power and Associates 2008 Follow-Up Study to NAS

29%

49%

22%

Submit RequestMay be open to Quote ProcessNot 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…


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Reasons Why Shoppers Did Not Submit a Request for Quote

50%

29%

15%7% 7%

0%

20%

40%

60%

Did not want to becontacted by

dealer

Wouldn’t getvaluable / accurate

information

Privacy or IdentityTheft concerns

Wouldn’t get atimely response

Tried it before anddidn’t like it

Fear of dealer contact and doubts about receiving valuable or 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


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Request for Quote - Dealer Response Ratings

6.4

7.2

0 2 4 6 8 10

Completeness ofResponse

Timeliness ofResponse

Satisfaction Score

Providing quality responses to requests is at the heart of the problem

Based to AIUs that submitted a request for quoteSource: J.D. Power and Associates 2008 Follow-Up Study to NAS


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Active Online Shoppers have a relatively limited use of sites within type

Active Online New Vehicle Buyers in 6 Months Prior to Purchase by Type of Site Average Number of Sites Visited

Third Party Sites 3.3

OEM Sites 3.1

Dealer Sites 2.6



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Pricing/Incentives/MSRP 40%Research Info/Options, Features, Specs

43% 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, Specs

14%

Research Info/Options, Features, Specs

12% 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/Estimate

3%Monthly Payment Calculator/Estimate

1%

Monthly Payment Calculator/Estimate

1% 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 different types of sites?

Based to AIUs Source: J.D. Power and Associates 2008 New Autoshopper.com Study


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Online New Vehicle Buyers Visit a “Long Tail” of Third-Party Sites

Top 15 Third Party Sites Share of Total Third Party Sessions


0%

2%

4%

6%

8%

10%

12%

14%

autotra

der.com

edmunds .com

kbb.com

cars.com

autos .m

sn.c om

autos .yahoo.com

consumerre

ports.o

rg

autos .aol.c

om

carmax.com

nadaguides .com

carsdire

c t.com

dmv.org

automotive.c om

autobyte

l.com

carfax.c om

vehix.com

autoweb.com


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IndependentSite Visitors Edmunds.com Kelley Blue

Book Cars.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 and sustaining 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


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Getting more traffic to the brand site is great, as long 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

hang

e in

Vis

itatio

n Saturn

Nissan

Volkswagen

JeepHyundai


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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


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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


Thank you!

jd power and associates automotive online marketing review

Automotive

vehicle buyers

purchase based

associates

associates

aius visiting

quote source

model

based