wireless shopper 2.0

Google Confidential and Proprietary

Wireless Shopper 2.0April 20, 2010


450+phones in

North America

with

10launches a week

1 Source: Gartner Group (2009)

2


Methodology• The initial study was based on understanding the attitudes of online users who identified

themselves as wireless purchasers and analyzing behavioral clickstream activity of those observedadding a wireless product to their shopping cart. A follow up study was completed, performing anattitudinal and behavioral study based on a major phone launch in Q2 2009

• Tracked online search and research activity using Compete’s 2MM US opt-in panelists from Nov2008 to Dec 2009, including carrier, OEM, 3rd party reseller and research sites

• Includes both paid and natural Search

• Sites and Search terms used were provided by Google

We tracked consumers onlineshopping activity to understandshopping and searchingpatterns.

We analyzed those who addedthe product to cart, tracing theirbehavior backward from the pointof purchase.

Surveyed searchers tounderstand their purchasebehavior.

Source: Google/Compete The Value of Search for Wireless Product Launches Study, March 2010.3


searchsmartphones

shiftingmarketplace

4


shiftingmarketplace

5


Device Focused Consumers

Online Regardless of Purchase Location

General Retailers Stepping it Up

6


Shoppers Open to Switching

Q - When you first considered your most recent cell phone purchase, which statement best describes your mindset about thewireless service provider? (Total Respondents=2961)Q - Which statement best describes your mindset about the brand of cell phone? (Total Respondents=2961)Source: Google/Compete Wireless Shopper Study, January 2010.

Service Provider

42%did not know exactly which

Carrier they would purchase from

78%did not know exactly which OEM

they would purchase from

Device

7


Hot Phones and Features Trump Upgrades

-11% +20% +17%

“I was eligible for afree or discountedupgrade with my

provider”

“I saw a newcell phone that I

had to have”

“I wanted a phonewith morefeatures”

Q. Why did you decide to make this cell phone purchase? (n=2881, among those not purchasing first cell phone)Source: Google/Compete Wireless Shopper Study, January 2010.Q. Why did you decide to make this cell phone purchase? Please select all that apply. (n=1217, not first phone)Source: Wireless Shoppers Study, Google & Compete May 2008


Device Interest Reflected through SearchQueries

9Source: Google.com, US


Consumers Increasingly Research Online

10Q - Which of the following sources did you use to research your recent cell phone purchase? (Total Respondents=2961)+ As recalled by survey respondents in 2009 vs as recalled by 2008 survey respondentsSource: Google/Compete Wireless Shopper Study, January 2010.

of people who bought phones in stores researched their purchase online

63%

increase in the number of onlineresources used in research+

29%

Google Confidential and Proprietary11

Same Online Research to Buy Online or In-store

Type of Information Researched Online

Q - Which of the following activities did you conduct online during your most recent cell phone purchase research process?Please select all that apply. (n=2057; based = shoppers that used online sources)Source: Google/Compete Wireless Shopper Study, January 2010.

**

11


Buyers Spending More Time Researching

12

56%

19%

20%

5%

25%

9%

45%

20%

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

2 days or less

More than two days, but

less than one week

1 week but less than 4

weeks

4 weeks or more

Total 2008 (n=1257)

Total 2009 (N=2961)

Time Spent Researching Phone Purchase

Q - How much time did you spend researching your most recent cell phone purchase? (Total Respondents=2916).Source: Google/Compete Wireless Shopper Study, January 2010.Source: Wireless Shoppers Study, Google & CompeteQ: How much time did you spend researching your recent cell phone purchase? (N=1257, asked of recent wireless buyers, May 2008)

**

**

**


Retailer Sites Increasing Share of Voice

Website Traffic Growth Dec 2008 vs Dec 2009

178% Amazon 107% Target

160% RadioShack 44% Aggregate ofOEM sites

26% Walmart 3% Aggregate ofCarrier sites

Source: Compete.com 13


24%

18%

9%

40%

16%

40%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Wireless Carrier

Site

OEM Site Retailer Site

Increasingly Influential as a Resource

14

40.09%

24.00%

18.10%

9.00%

40.00%

16.00%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Wireless Carrier Site OEM Site Retailer Site

2008 2009

Used During Research Process(2008 vs 2009)

Influential to Purchase Decision(2008 vs 2009)

Q - Which of the following sources did you use to research your recent cell phone purchase? (Total Respondents=2961) Not all answer choices includedon chartQ - On a scale from 1 to 5, where 1 means no influence at all and 5 means significant influence, how much influence did each of the following have onyour most recent cell phone purchase? Top 2 Box (Total Respondents=2961) Source: Google/Compete Wireless Shopper Study, January 2010.Q: Which of the following sources did you use to research? Asked of Recent Wireless Buyers, (N=1257)Q: How much influence did each resource used have on your purchase? (Top 2 Box) Asked of Recent Wireless Buyers Who Used Resource,N=variable, May 2008. Source: Wireless Shoppers Study, Google & Compete 2008.

45%

35%

57%60%

51%

55%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

Wireless Carrier

Site

OEM Site Retailer Site

**

**

****


Retailers Have Captured Wireless Customers

15

Purchase Channel for Phone Purchase

Q – Where did you purchase your most recent cell phone? (Total Respondents=2961).Online share of purchases was higher than actual due to online survey fielding. Actual online share is typically ~6% of carrier gross addordersSource: Google/Compete Wireless Shopper Study, January 2010.Note: Traqline reports 17% of wireless phone sales through general retail stores in Q4 2009.

23%


Device Focused Consumers

Online Regardless of Purchase Location

General Retailers Stepping it Up

16


smartphones

17


Open to Switching Carriers

Reeled in by Features

Investing More Money, More Research

18


New Segment of Customers

19

Wireless Device Owned Prior to Current Smartphone

Compete Smartphone Intelligence data. G1: Which of the following best describes the wireless device you primarily used before purchasingyour current smartphone? (n=1959, smartphone owners)

65%new smartphoneowners


Smartphone Purchase Drives Carrier Switching

20Q: How long have you been with your current wireless service provider.Source: Compete Gen Pop Wireless Survey, August 2009.

Been with currentservice provider 2+years

75%67%

Cell phone buyers

versus

Smart-phone buyers**


60%

70%

80%

66%

66%

71%

78%

88%

29%

42%

50%

60%

63%

69%

77%

85%

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

Applications available for download

Operating System

Specific phone model

Online account management

Wireless provider my family and friends use

Wireless provider customer service

Wireless provider

Coverage area

Smartphone Ow ner (n=704) Cell Phone Ow ner (n=1542)

All Attributes Valued by Smartphone Buyers

21

Importance of Attributes(Smartphone vs Cell phone)

Q - On a scale of 1 to 5, how important were each of the following attributes when making your most recent cell phonepurchase? (Top 2 Box)(Total Respondents=2961)Source: Google/Compete Wireless Shopper Study, January 2010.

Carrier

Device**

**

**


43%

21%

28%

7%

25%

17%

38%

20%

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

2 days or less

More than two days, but

less than one week

1 week but less than 4

weeks

4 weeks or more

Cell Phone Owner

(n=1542)

Smartphone Owner

(n=704)

Smartphone Owners Do More Research

Time Spent Researching Phone Purchase(Smartphone Owner vs. Cell Phone Owner)

**

**

Q - How much time did you spend researching your most recent cell phone purchase? (Total Respondents=2961)Source: Google/Compete Wireless Shopper Study, January 2010.

22


Not All Wireless Shoppers On Board Yet

23Q - Why did you decide to make this cell phone purchase? (Total Respondents=2961) Source: Google/Compete WirelessShopper Study, January 2010.SC4: Why haven't you purchased a smartphone? Source: Smartphone Intelligence Study, Q32009. (n=1959)

I wanted a phonewith more features

45%

22% I saw a new phoneI had to have

Smartphone plans aretoo expensive53%

28% I don’t need the featureson a smartphone

Why I Bought a Smartphone Why I Didn’t Buy a Smartphone


Open to Switching Carriers

Reeled in by Features

Investing More Money, More Research

24


search

25

Google Confidential and ProprietarySource: Google/Compete The Value of Search for Wireless Product Launches Study, March 2010.White-labeled case study based on the launch of a mobile in Q2 2009. Survey Data.

of consumers who searched for a newlylaunched mobile device purchased one.

62%26


Search is a Compass

Increase Acquisition & Loyalty

Bridge the Gap from Queries to Sales

27


Wireless buyers conduct an average of

searches during their shopping process

Source: Google/Compete Wireless Shopper Study, January 2010. Clickstream Data.28


Ann

ounc

emen

t

Pre

-Lau

nch

Laun

ch

Cap

ture

, Lea

rn,

and

Opt

imiz

e

Average Mobile Phone Launch

Source: Google internal data.

Time

Sea

rch

Que

ries

Search Encompasses Mobile Device Launch

29


Search Directs Traffic to New Phone Sites

Search Share of Total Site Visits to New Device Product Pages(Share of search referrals among total referrals to Carrier and OEM sites)

Source: Google/Compete The Value of Search for Wireless Product Launches Study, March2010.White-labeled case study based on the launch of a mobile in Q2 2009. Clickstream Data.

30


Search Introduces New Customers

Announcement &Pre-Launch Launch Post-Launch

62%Prospects

38%Current

Customers

46%

54%

47%Prospects

53%Current

Customers

56%Prospects

44%Current

Customers

39%

61%

Searchers

Percent of Searchers and Buyers(Device term searchers and search referred buyers who were current customers or prospects of the launch carrier)

Source: Google/Compete The Value of Search for Wireless Product Launches Study, March 2010.White-labeled case study based on the launch of a mobile in Q2 2009. Clickstream Data.

Searchers SearchersBuyers Buyers

31


Visits Initiated by New Device Searches

Percent of Search Referrals from Specific Device Keywords(Search referrals to OEM and Carrier pages, Compared to generic keywords)

Source: Google/Compete The Value of Search for Wireless Product Launches Study, March 2010.White-labeled case study based on the launch of a mobile in Q2 2009. Clickstream Data.

32


49% of Buyers Searched on Non-Brand Terms

33

Top 10Non-Branded Terms

that drove to shopping cart

cell phones

prepaid cell phones

cell phone plans

cell phone

cell phone companies

prepaid phones

cell phone deals

prepaid cell phone plans

prepaid phone

cell phones providers

Google Confidential andProprietary

33

hot cell phones

Source: Google/Compete Wireless Shopper Study, January 2010. Clickstream Data.


Non-Brand Terms Convert to Sales

34

30%of search-driven conversionsto Tier 1 carriers

Non-Brandedterms drove 67%

of search-driven visits tostore locator pages

Source: Compete Custom Dashboards. Q3 2009.


Search Drives Sales, Overall

Purchases made in-store bysearchers of new phone launches.

67%

Source: Google/Compete The Value of Search for Wireless Product Launches Study, March 2010.White-labeled case study based on the launch of a mobile in Q2 2009. Survey Data.

35


Search is a Compass

Increase Acquisition & Loyalty

Bridge the Gap from Queries to Sales

36


Thank you

37

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