Google Complete Automotive Buying Flow
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  • 1. The Automotive Buying Process y g From a Search Perspective Proprietary to Google and Compete, October 2007
  • 2. Objectives and Methodology Objective Understand the key online activities that consumers undertake prior to new vehicle purchases Approach 1. 1,837 Automotive Buyers identified through Survey 2. The buyer’s online behavior was analyzed during the six months prior t purchase i th i to h 3. The following behaviors were studied and quantified ­ Search engine usage ­ Third party automotive website visitation ­ OEM website visitation 2 Proprietary to Google and Compete, October 2007
  • 3. Key Findings The Automotive Buying Process has compressed substantially Search is a major contributor to consumer research throughout the buying process Search is among the most valuable Media S M di Sources f Buyers for B 3 Proprietary to Google and Compete, October 2007
  • 4. The Online Auto Channel Online Automotive Activity During the 6 months prior t O li A t ti A ti it D i th th i to Purchase 4 Proprietary to Google and Compete, October 2007
  • 5. Nearly Every Buyer Uses the Online Channel • Over 80% of New Vehicle Buyers visited an OEM site within 6 months of purchase • Over 90% of buyers in general visited an OEM and/or Third party Site Pre-Purchase Automotive Category Visitation (Share of Buyers that visited the category of sites during the 6 months prior to purchase) 91% 90% 82% 82% 78% 74% OEM Sites  3rd Party 3rd Party  Automotive  and/or  Sites OEM sites OEM sites Share of New Car Buyers Share of Used Car Buyers 5 Proprietary to Google and Compete, October 2007
  • 6. Search is a Critical Piece of the Online Channel • 66% of OEM Site visitors who bought new vehicles were referred by search during the 6 months prior to purchase Pre-Purchase Share of Visitors Referred by Search (Share of Buyers Visiting each category that were referred by search during the 6 month period) 66% 24% 25% 17% OEM Sites  3rd Party Automotive  Sites New Car Buyers Referred by Search Used Car Buyers Referred by Search 6 Proprietary to Google and Compete, October 2007
  • 7. New Vehicle Buyers Use More Branded Terms • ¾ of search referrals amongst new vehicle buyers were from high level brand terms • Used buyers were more likely to use generic search terms Type of Keyword Phrase used by Buyers Before Purchase (Share of search referrals during the 6 month period) 78% 57% 43% 22% Brand or Model Generic Share of Searches for New Buyers Share of Searches for New Buyers Share of Searches for Used Buyers Share of Searches for Used Buyers 7 Proprietary to Google and Compete, October 2007
  • 8. The Online Research Flow Changes i B h i Th Ch in Behavior Throughout the Buying P h t th B i Process 8 Proprietary to Google and Compete, October 2007
  • 9. The Automotive Research Process Has Compressed • 65% of vehicle buyers in general indicated that they researched for one month or less Estimated Research Time Prior to Purchase – All Buyers (Share of Buyers indicating how long they researched their purchased) 29% 19% 17% 17% How long did you 10% % conduct research before 7% making your recent <Make> purchase? N= 1,837 More than Around Around Around Around Less than 3 months 3 months 2 months 1 month 2 weeks 1 week 9 Proprietary to Google and Compete, October 2007
  • 10. The Automotive Research Process Has Compressed • 59% of new vehicle buyers indicated they researched for one month or less Estimated Research Time Prior to Purchase – New Buyers (Share of Buyers indicating how long they researched their purchased) 22% 21% 20% 16% 12% 9% How long did you conduct research before making your recent <Make> purchase? N= 879 More than Around Around Around Around Less than 3 months 3 months 2 months 1 month 2 weeks 1 week 10 Proprietary to Google and Compete, October 2007
  • 11. The Automotive Research Process Has Compressed • 70% of used or pre-owned vehicle buyers indicated that they researched for one month or less Estimated Research Time Prior to Purchase – Used Buyers (Share of Buyers indicating how long they researched their purchased) 36% 18% 15% 16% How long did you conduct research before 9% making your recent <Make> purchase? 6% N= 958 More than Around Around Around Around Less than 3 months 3 months 2 months 1 month 2 weeks 1 week 11 Proprietary to Google and Compete, October 2007
  • 12. As time to purchase shortens, more New Vehicle Buyers visit Third Party and OEM sites • Visitation to OEM and Third party sites increased more than 40ppts from six months to one month prior among new vehicle buyers Category Visitation By Pre-Purchase Period - New Vehicle Buyers (Share of new vehicle buyers visiting the category by time period) 70% 60% 50% 40% 30% 20% 10% 0% 6 Months  5 Months  4 Months  3 Months  2 Months  Within the  Prior Prior Prior Prior Prior Month  of Purchase of Purchase OEM Sites  3rd Party Automotive  Sites 12 Proprietary to Google and Compete, October 2007
  • 13. More Used Vehicle Buyers tend to visit Third Party sites than OEM sites • Visitation to Third party sites increased more than 50ppts from six months to one month prior among used and pre-owned vehicle buyers Category Visitation By Pre-Purchase Period - Used Vehicle Buyers (Share of used vehicle buyers visiting the category by time period) 70% 60% 50% 40% 30% 20% 10% 0% 6 Months  5 Months  4 Months  3 Months  2 Months  Within the  Prior Prior Prior Prior Prior Month  of Purchase of Purchase OEM Sites  3rd Party Automotive  Sites 13 Proprietary to Google and Compete, October 2007
  • 14. New Buyers view more information on OEM Sites as they come closer to Purchase • Content usage on both OEM sites and Third Party sites increase substantially in the month prior to purchase Page Views by Pre-Purchase Period- New Vehicle Buyer (Page Views for each category by time period) 300  250  200  200 150  100  50  50 ‐ 6 Months  5 Months  4 Months  3 Months  2 Months  Within the  Prior Prior Prior Prior Prior Month  of Purchase of Purchase OEM Sites  3rd Party Automotive  Sites 14 Proprietary to Google and Compete, October 2007
  • 15. Used Vehicle Buyers utilize Third Party Automotive sites more than OEM sites • Page Views on 3rd party sites increase substantially as time to purchase shortens Page Views by Pre-Purchase Period- Used and Pre-Owned Vehicle Buyer (Page Views for each category by time period) 300  250  200  200 150  100  50  50 ‐ 6 Months  5 Months  4 Months  3 Months  2 Months  Within the  Prior Prior Prior Prior Prior Month  of Purchase of Purchase OEM Sites  3rd Party Automotive  Sites 15 Proprietary to Google and Compete, October 2007
  • 16. New Vehicle Buyers spend more time on OEM and 3rd Party sites as they come closer to Purchase • New Vehicle Buyers spend more time on the 3rd party sites when they are one month prior to purchase Time On Category - New Vehicle Buyer (Number of minutes spent on category sites by period) 80  70  60  50  40  30  20  10  ‐ 6 Months  5 Months  4 Months  3 Months  2 Months  Within the  Prior Prior Prior Prior Prior Month  of Purchase of Purchase OEM Sites  3rd Party Automotive  Sites 16 Proprietary to Google and Compete, October 2007
  • 17. Used Vehicle Buyers spend more time on Third Party Automotive sites Compared to OEM sites • Used Buyers spend significantly more time on 3rd party sites within the month of purchase Time On Category - Used Vehicle Buyer (Number of minutes spent on category sites by period) 80  70  60  50  40  30  20  10  ‐ 6 Months  5 Months  4 Months  3 Months  2 Months  Within the  Prior Prior Prior Prior Prior Month  of Purchase of Purchase OEM Sites  3rd Party Automotive  Sites 17 Proprietary to Google and Compete, October 2007
  • 18. Upper and Lower Funnel: Vehicle Buyers Use Search Share of New Buyers Referred by Search To OEM Sites awareness 6 Months 22% interest 3 Months 15% consideration 2 Months 19% test-drive 1 Month 42% purchase 1 Week 41% Search is a critical activity at every stage of the buying process 18 Proprietary to Google and Compete, October 2007
  • 19. The Automotive Research Tools Understanding H U d t di How Automotive Buyers Research A t ti B R h 19 Proprietary to Google and Compete, October 2007
  • 20. Search Engines are the Third Most Used and Third Most Important Media Source Media Sources Used Prior To Purchase Media Source Importance – Top 2 Box (Share of Buyers indicating they used media source) (Share of buyers indicating source was important ) OEM Site 39% OEM Site 79% 3rd Party Site 37% 3rd Party Site 84% Search Engine 32% Search Engine 75% News/Mag. Article 14% News/Mag. Article 65% Flyer/Brochure 12% Flyer/Brochure 59% TV Ad 11% TV Ad 49% News/Mag. Ad 10% News/Mag. Ad 51% Radio Ad 3% Radio Ad 48% TV Review 3% TV Review 65% Billboard 2% Billboard 36% Online Banner 1% Online Banner 48% Online Video 1% Online Video 46% N= 1,837 ,83 1) Which of the following media sources did you use to find automotive related information to help you make your recent <Make> purchase? (Multi-Select) 2) Among the media sources you indicated, please indicate the relative importance of each? (Single Select Scale – 1 to 5 rating) 20 Proprietary to Google and Compete, October 2007
  • 21. The Value of Search Engines Ranks Among That of OEM Sites and Third Party Sites 4.3 3rd Party Site More Important OEM Site 4.1 41 Search Engine TV Review 3.9 News/Mag.  Article Radio Ad R di Ad Flyer/Brochure Relative 3.7 Importance of Media News/Mag.  Ad Source 3.5 Online Video TV Ad 3.3 Online Banner 3.1 2.9 Billboard Less Important 2.7 Low Usage High Usage 0.00 0 00 0.05 0 05 0.10 0 10 0.15 0 15 0.20 0 20 0.25 0 25 0.30 0 30 0.35 0 35 0.40 0 40 Share of Buyers Utilizing Media Source 21 Proprietary to Google and Compete, October 2007
  • 22. Test Drives and Past Experience are highly utilized resources and the most important Resource Used Prior To Purchase Resource Importance (Share of Buyers indicating they used resource) (Share of buyers indicating resource was important ) Dealer Dealer 56% 73% Visit Visit Test Test 53% 91% Drive Drive Past Past 50% 91% Experience Experience Consumer Consumer 39% 86% Reviews Reviews Friends, Family, Friends, Family, 33% 76% Colleagues Colleagues N= 1,837 1) Which of the following resources did you utilize to find automotive related information to help you make your recent <Make> purchase? 2) Among the resources you indicated, please indicate the relative importance of each? 22 Proprietary to Google and Compete, October 2007
  • 23. Test Drives and Past Experience are the most valuable resources for Buyers 4.60 More Important Past  Test  Experience Drive 4.50 4.40 Relative Importance Consumer  of Resource Reviews 4.30 4.20 4.10 4 10 Friends, Family,  Friends Family Dealer  D l Colleagues Visit Less Important 4.00 Low Usage High Usage 0.30 0 30 0.35 0 35 0.40 0 40 0.45 0 45 0.50 0 50 0.55 0 55 0.60 0 60 Share of Buyers Utilizing Resource 23 Proprietary to Google and Compete, October 2007
  • 24. Key Findings 24 Proprietary to Google and Compete, October 2007
  • 25. Key Findings The Automotive Buying Process has compressed substantially • Nearly 60% of new Buyers researched their purchase for one month or less before buying • Over 70% of Used and Pre-Owned buyers researched their purchase for one month or less Search is a major contributor to the research process throughout the buying process • Nearly ¾ of new Vehicle Buyers used search at some point in the process and were referred to an OEM Site or 3rd Party Automotive Site d • In the last month prior to purchase, 42% of New Vehicle Buyers used search Search is among the most valuable Media Sources for Buyers • Search was valued at near parity with OEM Sites and 3rd Party Automotive Sites 25 Proprietary to Google and Compete, October 2007
  • 26. Q&A Seth Barron Industry Operations, Automotive automotive_research@google.com Jeremy Crane, Director of Search and Online Media autopractice@compete.com 26 Proprietary to Google and Compete, October 2007