J. D. Power and Associates Auto Shopper Analysis

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  • This year we saw a 2%-point increase in AIU rate for both new and used. 70% of NVB use the internet to vehicle shop, and 61% of UVB Older buyers are still giving us the fastest growth 14% of NVB don’t use the Internet and 22% of UVB don’t have access
  • 23% of all UVB found the vehicle they purchased online. The internet is the most efficient medium to find the used vehicle that will be purchased. This is a 44% increase over last year. When we ask consumers on which Web did they find the vehicle they purchased, dealers sites are mentioned most often. However, the majority of these consumers tell us that they linked to the dealer site from an independent site. So if you credit the independent sites for these sales, they come up as the number one category for sources used vehicle sales.
  • The story is not as good on the new vehicle side of things where the number of consumers requesting a quote online has remained flat. The value proposition of submitting a lead does not work for two thirds of Automotive Internet Shoppers (AIUs) who bought a new vehicle. However, 39% of NVB tell us they visited a dealership that they found online – so the internet is sourcing a lot more sales than online leads indicate
  • A new vehicle buyers are more likely to visit manufacturer sites than third part sites Average number visited is the about the same 2-3
  • The trend we see in online auto shopping is that brand sites are catching up and will soon be replacing third-party sites in importance. They are nearly as likely to be the first site visiting
  • While third-party sites still lead in being voted most useful, brands sites are quickly catching up In most cases, the site most likely to be mentioned as the most useful is the OEM site of the brand that was purchased.
  • Two-thirds of AIU’s read consumers ratings online. 55% of those who read consumer reviews consider them to be very helpful in their decision process.
  • When people talk about the funnel being dead they are talking about the idea that every consumer goes through the same process when shopping for a vehicle. The concept of the purchase funnel was first developed as a marketing model. And that model still stands true today. Even though there are a thousand different paths that consumers take through the shopping process these five things still have to occur in order to get a customer to buy your product. The reason why it is important to recognize the purchase funnel is…
  • If you look at all the different marketing channels available to manufacturers, each channel has its unique strength in marketing against the purchase funnel. Event marketing is used to build a relationship with consumers to improve awareness and familiarity. Television provides broad reach at the top of the funnel. Some magazines can help build awareness, increase familiarity, while others can be used to get your model on the consideration list. Newspaper ads, on the other hand, are more focused at the bottom of the funnel, pitching price, incentives and displaying used inventory. The Internet is really the only medium out there that can be very successful across the entire funnel. People visit the internet every day. Awareness and familiarity can be increased before consumers even begin shopping. People use the internet to help build their consideration list. They discover what dealers they should visit and purchase from. I talked earlier about the manufacturer sites catching up with the independent sites. That wasn’t to imply that independent site will be going away. There will always be a role for them. But the 3 rd -party sites that embrace the idea that they can provide dealers and manufactures with marketing solutions, not just leads, are the ones that are going to be the most successful.
  • Another trap that we see a lot marketers get into is using measurement criteria based on the medium they are using rather than basing on the true goals of the campaign. If your online campaign’s goal is to build awareness, then you shouldn’t be using bottom funnel metrics, like the number of people exposed that end up requesting a quote or searching for dealer information. An upper funnel campaign requires upper funnel measurements. Right now, the 1,000 pound gorilla out there is television. The dollars spent online pale in comparison to what is spent on TV. But if we want to try to get more of those TV dollars, we need to stop making the argument that marketers need to stop spending money on the upper funnel move those dollars to the lower funnel – and start making the argument that they need to move more upper funnel TV dollars to upper funnel online campaigns because the internet is the only place they go where they are able to communicate with consumers at each stage of the marketing funnel.
  • Step 1: Could take 12 months, could take 12 days. Current vehicle breaks down, accidents. Advertising of new models. The internet can play an important role to some consumers – looking at new models Step2: One-third of shoppers figured this out in step.
  • So let’s look at the shopping process. For the average NVB, the entire shopping takes ~ 4 months Go online and begin intense researching ~ 3 months before purchase Start visiting dealers about one month later – 1 ½ months before purchase
  • The only difference is that they decide on the type of vehicle they want earlier in the process.
  • While the average new-vehicle buyers decides it is time to buy a vehicle about 15 weeks before purchasing, we still have a sizable number of people whose entire shopping process takes over six months to complete. Likewise, one-third of shoppers go through the shopping process with one month. You need to be prepared to meet the needs of shoppers at both ends of the extremes.
  • Likewise, you see a similar distribution for when people go online to began collecting vehicle information for their shopping process. 16% of new-vehicle buyers begin their online vehicle shopping over six months before purchase, while nearly half don’t go online until the month they purchase.
  • One-third of new vehicle bueyrs only consider one model – the model they end up purchasing. And 50% only consider two or three models. The majority of those who only consider one model are repurchasing the make vehicle that they already own. This is important to remember because…
  • The way they use the internet is completely different than those who have more than one vehicle on their shopping list. In fact, less than half of those only considering one model even use the internet in their shopping process. They already know what model they want to buy, it is just a matter of determining where to buy it, what options and features are available and how much they should pay for it. The data show that the more vehicles a person has on their consideration list, the more likely they are to use the internet to help them in their decision process.
  • It is only natural that independent sites are the most trusted to make cross-brand model comparisons.
  • In our Escaped Shopper study, we ask new-vehicle buyers about the models they considered but did not purchase. We not only ask them about what are the reason they didn’t purchase a specific model, but we also ask where they obtain that information. 22% of the models rejected are not purchased due to information found online.
  • By far the information used most often to reject a vehicle is price related, but styling, gas mileage and reliability information is also important. If you were to ask what the most important vehicle information to have easily accessible on your site, this is the list right here.
  • Now I will turn it over to Gene Cameron to talk about a new venture we are doing with Compete.
  • Over 300,000 total matches, but only 73,700 had six months of continuous click data
  • J. D. Power and Associates Auto Shopper Analysis

    1. 1. Online Automotive Shopping Gene Cameron Vice President, Media Marketing Solutions Steve Witten Executive Director, Automotive Research
    2. 2. Automotive Internet usage (AIU) rates continue to increase 1 Based to new-vehicle buyers. Source: J.D. Power and Associates 1999-2007 New Autoshopper.com Studies 2 Based to used-vehicle buyers. Source: J.D. Power and Associates 1999-2007 Used Autoshopper.com Studies Automotive Internet Usage (AIU) Trends New 1 – Vs. Used 2 – Vehicle Buyers 9-Year Trend ^Preliminary Data % of All Buyers
    3. 3. 23% of late-model used vehicles sold are sourced online Based to late model used-vehicle buyers Source: J.D. Power and Associates 2003-2007 Used Autoshopper.com Studies 2003 2004 2005 2006 2007^ ^Preliminary Data % of All Buyers
    4. 4. Request for online quote is not growing for new-vehicle sales Based to new-vehicle buyers Source: J.D. Power and Associates 2004-2007 New Autoshopper.com Studies % of All Buyers Visited Dealer Found Online 39%
    5. 5. Manufacturer sites are more popular than independent sites among new-vehicle buyers 1 Based to AIUs. Source: J.D. Power and Associates 2001-2007 New Autoshopper.com Studies Types of Web Sites Visited by New-Vehicle Online Shoppers % of AIU’s
    6. 6. Manufacturer sites are just as likely as independent sites to be the first site visited 1 Based to AIUs. Source: J.D. Power and Associates 2001-2007 New Autoshopper.com Studies First Auto Site Visited by New-Vehicle Online Shoppers % of AIU’s
    7. 7. Manufacturer sites are catching up to the independent sites in being “most useful” 1 Based to AIUs. Source: J.D. Power and Associates 2001-2007 New Autoshopper.com Studies Most Useful Type of Site Visited by New-Vehicle Online Shoppers % of AIU’s
    8. 8. Consumer ratings are the most frequently used consumer generated media Based to AIUs Source: 2007 J.D. Power and Associates New Autoshopper.com & Used Autoshopper.com Studies 55% = Very Helpful
    9. 9. The Vehicle Shopping Process
    10. 10. The Funnel Still Exists Consideration Purchase Awareness Familiarity Visit Dealer <ul><li>Make them aware of your model </li></ul><ul><li>Show your model is for them </li></ul><ul><li>Convince them to consider your model </li></ul><ul><li>Convince them to shop your dealership </li></ul><ul><li>Convince them to purchase your vehicle </li></ul>The Goals
    11. 11. Different media channels are more effective at distinct stages of the shopping funnel Consideration Purchase Awareness Familiarity Visit Dealer Marketing Channel TV Ads Magazines Internet Newspapers Events
    12. 12. Upper funnel marketing requires different metrics Consideration Purchase Awareness Familiarity Visit Dealer <ul><li>Change in awareness </li></ul><ul><li>Improvement in familiarity </li></ul><ul><li>Improvement of opinion </li></ul><ul><li>Click on ad </li></ul><ul><li>Click to site </li></ul><ul><li>Build a vehicle </li></ul><ul><li>Search inventory </li></ul><ul><li>Search for dealer info </li></ul><ul><li>Request a quote </li></ul>Measures of Success
    13. 13. Consumer Shopping Process <ul><li>Should I be in market? </li></ul><ul><ul><li>Resale value/condition of current vehicle </li></ul></ul><ul><ul><li>Change in vehicle needs </li></ul></ul><ul><ul><li>“ Gotta have” new model </li></ul></ul><ul><li>Which models meet my needs? </li></ul><ul><ul><li>Price, styling, reliability, size </li></ul></ul><ul><ul><li>Previous experience </li></ul></ul><ul><ul><li>Advice from friends </li></ul></ul><ul><li>Where should I purchase? </li></ul><ul><ul><li>Price </li></ul></ul><ul><ul><li>Convenient location </li></ul></ul><ul><ul><li>Service </li></ul></ul>
    14. 14. The new-vehicle shopping process takes about three months for the average AIU Decide on type of vehicle Start visiting dealers Decide it was time to purchase Shop vehicles on the Internet Start actively researching vehicles Decide on model Purchase new vehicle Source: 2007 J.D. Power and Associates New Autoshopper.com Study. Based to AIUs. 14.7 11.7 11.0 10.4 7.6 6.3 0
    15. 15. The process is not much different for late-model used vehicle buyers Decide on type of vehicle Start visiting dealers Decide it was time to purchase Shop vehicles on the Internet Start actively researching vehicles Decide on model Purchase new 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
    16. 16. One-third of new-vehicle buyers purchase within one month of deciding they need a new vehicle Source: 2007 J.D. Power and Associates New Autoshopper.com Study. Based to AIUs. 34% Shopping Process One Month or less 27% Shopping Process Over Six Months
    17. 17. About half of AIU’s don’t begin their online shopping until one month before purchase Source: 2007 J.D. Power and Associates New Autoshopper.com Study. Based to AIUs. 49% Online-Shopping One Month or less 16% Online-Shopping Over Six Months
    18. 18. Over one-third of new-vehicle buyers seriously consider only one model Source: 2007 J.D. Power and Associates Escaped Shopper Study
    19. 19. Those with only one vehicle on their shopping list are less likely to use the internet to vehicle shop Source: 2007 J.D. Power and Associates Vehicle Shopping Study
    20. 20. Those shopping several models are more likely to find independent sites more useful Source: 2007 J.D. Power and Associates Vehicle Shopping Study. Based to AIUs.
    21. 21. Online Vehicle Shopping And Dealer Visits
    22. 22. 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
    23. 23. Price, gas mileage, exterior styling, and reliability information is important in online shopping decisions Source: 2007 J.D. Power and Associates Escaped Shopper Study Base: Vehicle rejecters
    24. 24. Compete – PIN Data Match Online Behavioral Analysis of Vehicle Buyers
    25. 25. Vehicle Buyer Click Stream Methodology Compete Panel 4.4M Records Power Information Network Dealers in Markets of 70% Sales Vehicle Buyer Info 6/2005 – 7/2007 ~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 Surname & Address Match Third party Site C Site B Site A P - 6 P – 3… P -2 P - 1 Purchase
    26. 26. Half of franchise-dealer buyers visit a third-party site before purchasing a vehicle Base: Buyers with internet access NOTE: Preliminary data
    27. 27. 33% of those who will visit a 3 rd -party site, will do so at least six months before purchase Base: New vehicle buyers with internet access visiting a 3 rd -party automotive site NOTE: Preliminary data 100% 78% 69% 59% 47% 33%
    28. 28. 30% of those who will visit an OEM site, will do so at least six months before purchase Base: New vehicle buyers with internet access visiting an OEM site NOTE: Preliminary data 100% 79% 67% 56% 42% 30%
    29. 29. Auto sites are high in both composition and reach Web Site Composition and Reach Among Vehicle Buyers Base: All vehicle buyers with internet access NOTE: Preliminary data Dealer Sites OEM Sites 3 Rd Party Sites Calendar/Address Books Search
    30. 30. Base: 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
    31. 31. Summary <ul><li>Manufacturer and independent sites have reached parity </li></ul><ul><ul><li>Dealer sites will be next </li></ul></ul><ul><li>The internet is the only medium that works efficiently across the entire shopping funnel </li></ul><ul><li>Significant online shopping activity occurs six months out </li></ul><ul><li>Highest bump in online auto shopping occurs within the month of purchase </li></ul><ul><li>Purchase and web-wide behavioral data are now being linked for the first time creating new marketing insights </li></ul>
    32. 32. Thank You

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