How Consumers Shop for Phones and Wireless Service

1. Wireless Shoppers
How Consumers Shop for Phones and Wireless Service
October 2008
Google Confidential and Proprietary 1

2. Objectives
Understand the consumer buying process for
wireless carriers and mobile phones
• What is the decision making process for wireless shoppers?
• What is the role of Search in the research process?
• Are all mobile phone buyers the same?
Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 2

3. Methodology
Survey of Wireless Phone Buyers Deep Dive into Search Behavior
Sample Sample
• P3M wireless phone buyers • Wireless shoppers who reach the
shopping cart of a Big-4 wireless carrier
site (Verizon Wireless, AT&T, T-Mobile,
Sample source Sprint) after using search
• Compete’s 2MM US proprietary panel
Sample source
Data • Compete’s 2MM US proprietary panel
• Self-reported attitudes and behavior
• Overlay of the respondent’s observed Data
online shopping and searching behavior
• Observed searching behavior used to
• N = 1,276 arrive at any type of wireless web site
• May 2008 including Carrier, OEM, Online Agent
and Research or Blog Sites
• Q1 2008
Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 3

4. Summary Findings
1 Shoppers Can Be Influenced In the Research Process
2 Search Brings Buyers to Your Site
3 In-Store Buyers Use Search, Just Like Online Buyers
4 Searchers are More Valuable Customers
Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 4

5. What is the decision making
process for wireless shoppers?

6. Consumer Uncertainty Exists Prior to Purchase
There is an opportunity to influence what brands consumers purchase,
as a big portion of the market starts out undecided
Certainty of What Brand Will Be Purchased
Wireless Carrier Handset OEM
21%
knew
38% exactly
didn’t know
exactly 62%
knew 79%
exactly didn’t know
exactly
Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 6
Q: When you first considered your recent purchase, which statement best describes your mindset about the wireless service
provider and handset OEM you would use? Asked of Recent Wireless Buyers, N=1,257, May 2008

7. Purchase Decision Driven More by Carrier
Nearly half of wireless buyers base their purchase decision primarily on
the service carrier
Basis of Purchase Decision
48% Based on carrier
Based equally on phone and carrier
28% Based on phone
24%
Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 7
Q: How much of your recent purchase was based on the specific phone vs. the specific carrier? Asked of Recent Wireless
Buyers, N=1,257, May 2008

8. Purchase Decisions are Made Quickly
75% of buyers spend less than one week researching, leaving a short
window to influence uncertain shoppers
Time Spent Researching Cell Phone Purchase
40%
35% 75%
30%
21%
20% 19%
15%
10%
5% 5%
0%
Less than One to More than two 1 to 2 3 to 4 Longer than
one day two days days, but less weeks weeks one month
than one week
Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 8
Q: How much time did you spend researching your recent cell phone purchase? Asked of Recent Wireless Buyers, N=1,257,
May 2008

9. Cell Phone Buyers Conduct Online Research
78% of all wireless buyers go online to research, with almost half
researching exclusively online
Type of Research Resources Used
49% 29% 22%
Online Research Both Online & Offline Research
Only Offline Research Only
Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 9
Wireless Resources Used. Asked of Recent Wireless Buyers using either online or offline research, N=1,044, May 2008

10. Wireless Buyers Research on Carrier Sites
More people research on the carrier web sites than in the store. Sites
should provide comprehensive phone and plan information.
Usage and Influence of Research Sources
50% 100%
Online Resources Offline Resources
40% 79%
40% 80%
70% 67%
62% 66%
57% 60%
30% 55% 60%
22%
20% 35% 40%
16% 17% 16%
10% 9% 8% 8% 20%
6%
0% 0%
Carrier OEM web site Retail web Consumer Professional Carrier store Friend or Carrier store Big Box
web site site reviews reviews salesperson family display display
(blogs, etc) (cnet.com, etc)
% Using Resource % Resource Influence
Source: Wireless Shoppers Study, Google & Compete
Q: Which of the following sources did you use to research? Asked of Recent Wireless Buyers, N=1,257 Q: How much influence Google Confidential and Proprietary 10
did each resource used have on your purchase? (Top 2 Box of 5 Points) Asked of Recent Wireless Buyers Who Used
Resource, N=variable, May 2008

11. What is the role of Search
in the research process?

12. Buyers Searched Throughout the Research Process
24% of wireless buyers used search, finding it valuable at the top of the
funnel and throughout their research
When Search is Used During the Research Process
Research Process
27% Beginning Only
50%
14% Middle Only Throughout
entire process
7% End Only
Source: Wireless Shoppers Study, Google & Compete
Q: When did you use each resource during your research process? Responses from those who used search. Asked of Recent Google Confidential and Proprietary 12
Wireless Buyers N=1,257, May 2008
Note: 2% Didn’t Know or Could Not Recall

13. Search Drives Traffic to Your Site
25% of prospects enter Carrier and OEM sites via a search referral
25%
from
Search
Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 13
Search Entry Share of Online Wireless Prospects – Session Based.
Quarterly Average Prospect Sessions entering each site via a search referral, Q1 2006- Q1 2008

14. Shoppers Search For Branded and General Terms
Wireless shoppers search most heavily for specific OEM terms, while
almost one quarter of shoppers search on general telecom terms
Search Queries
23% 28%
Non-Branded Carrier
43%
OEM
Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 14
Term Category Distribution of Search Queries at Google.com – % of Queries at Google.com by Term Category Among Wireless
Searchers who reach the Shopping Cart page at a Big-4 Carrier site, Q1 2008 Broad Match

15. Non-Branded Searchers are Less Decided
Wireless shoppers who search on non-branded terms seek more
information, likely still undecided on brand.
Research Sessions Pageviews
Non-Branded 28 430
Searchers
Branded 19 276
Searchers
Difference 1.5x 1.6x
Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 15
Average Volume of Sessions and Pageviews among Searchers by Term Category Among Wireless Searchers who reach a shopping
cart at a Big-4 site , Q1 2008. Sessions and Pageviews occurred on Wireless Carrier, Agent, OEM and Research web sites.

16. Many Shoppers Click Only Once or Twice
43% of qualified searchers click only once or twice on wireless sites,
while over one third click 5 or more times.
Wireless Shoppers Search Behavior
30%
24%
43%
19%
20%
13% 13%
10% 9%
7%
5%
4%
3% 3%
0%
1 2 3 4 5 6 7 8 9 10+
Number of Search Referrals to Wireless Sites
Source: Wireless Shoppers Study, Google & Compete
Distribution of Search Referrals – Number of Search Referrals Wireless Shoppers Conduct in the 30 Days prior to reaching Google Confidential and Proprietary 16
Shopping Cart at Big 4 Carrier Site, Q1 2008

17. Are all mobile phone buyers
the same?
- Online and In-Store Buyers
- Searchers and Non-Searchers

18. Online and In-Store Buyers
Channel Choice Mirrors Customer Need
Wireless buyers purchase online for convenience, while immediacy of
usage and customer service drive in-store sales.
Reasons for Buying Online or In-Store
Online In-Store
Easier 51% Needed phone now 42%
Shipped to me 45% Talk to salesperson 41%
Needed to hold phone 36%
Special deal online 45%
Faster 29%
Better price 43%
Easier 29%
Faster 36%
No shipping cost 21%
Avoid salesperson 25% Special deal in store 19%
Better selection 20% Was in store already 19%
0% 20% 40% 60% 0% 20% 40% 60%
Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 18
Q1: Why did you buy offline rather than online? Please select all that apply. Asked of Offline Wireless Buyers N=819
Q2: Why did you buy online rather than offline? Please select all that apply. Asked of Online Wireless Buyers N=438, May 2008

19. Online and In-Store Buyers
Only 6% of Wireless Sales Are Made Online…
…But 74% of in-store buyers conduct their research online.
Source: Wireless Shoppers Study, Google & Compete
Wireless resources used. Asked of recent Wireless Buyers using either online or offline research, N=1,044, Offline Buyers N=633,
Online Buyers N=411, May 2008 Google Confidential and Proprietary 19
Source: 6% of Wireless gross add orders are made online. Calculated by dividing Compete’s observed quarterly Big-4 online gross
add order total by total reported Big-4 gross add orders

20. Online and In-Store Buyers
In-Store Buyers Search Like Online Buyers
In-Store buyers use search in their wireless research process with the
same frequency as online buyers
Percent Who Search During Their Online Research
26% 22%
Online Buyers In-Store Buyers
Source: Wireless Shoppers Study, Google & Compete
Wireless resources used. Asked of recent Wireless Buyers using either online or offline research, N=1,044, Offline Buyers Google Confidential and Proprietary 20
N=633, Online Buyers N=411, May 2008
Note: Online Buyers 19 sessions In-Store Buyers 20 sessions, Online Buyers 309 pageviews In-Store Buyers 341 pageviews

21. Searchers and Non-Searchers
Searchers Want More Sophisticated Handsets
Searchers are high-end customers. They seek more functionality, are
specific about the handset and spend more money on their phones.
Bought a New Phone to Get Purchase Decision Was
More Functionality Based on Phone
Over Service Carrier
**33% 22% **28% 23%
Searchers
Non-Searchers Spent over $100
on Phone
**27% 20%
Source: Wireless Shoppers Study, Google & Compete
Q1: How much of your recent purchase was based on the specific phone vs. the specific carrier? Asked of Recent Wireless Buyers N=1,257 Q2:
Why did you set out to make a cell phone purchase? Select all that apply. Asked of Recent Wireless Buyers not purchasing their first phone Google Confidential and Proprietary 21
N=1,217, Q3: How much did you pay (after any rebates) for your current cell phone (not including the cost of your monthly plan)? Asked of Recent
Wireless Buyers N=1,257 May 2008 Note: ** indicates Statistical Significance at the 95% level

22. Searchers and Non-Searchers
Searchers Are More Valuable Customers
Wireless buyers who use Search in the research process use more
value-added services on their phone
Activities Performed on Cell Phone
Searchers Non-Searchers
Use the internet *38% 31%
Send email *38% 29%
Download and purchase digital media *24% 16%
Download and purchase applications **23% 13%
Watch Mobile TV *16% 9%
Source: Wireless Shoppers Study, Google & Compete
Q: On average, how often do you do each of the following on your cell phone? Google Confidential and Proprietary 22
Asked of Recent Wireless Buyers N=1,257, Searchers N=297, Non Searchers N=960, May 2008
Note: * indicates statistical significance at the 90% level, ** indicates statistical significance at the 95% level

23. Searchers and Non-Searchers
Searchers Spend More Time Researching
Searchers give more consideration to the wireless purchase, making
them more open to influence.
Amount of Time Spent Researching Purchase
59%
43%
29% 28% 25%
16%
28%
One or two days More than two days, but More than a week
less than a week
Searcher Non-Searchers
Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 23
Q: How much time did you spend researching your recent cell phone purchase? Asked of Wireless Buyers N=1,257, Searchers
N=297, Non Searchers N=960, May 2008

24. Searchers and Non-Searchers
Searchers Seek More Information from Your Sites
Searchers are more engaged visitors to your site, consuming more
wireless content than non-searchers.
Research Sessions Pageviews
Searchers 23 405
Non-Searchers 16 237
Difference 1.4x 1.7x
Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary
Average Volume of Sessions among Searchers by category, Q1 2008. Average Volume of Pageviews among Searchers by
category, Q1 2008. Sessions and Pageviews occurred on Wireless Carrier, Agent, OEM and Research sites.

25. Summary Findings
1. Shoppers Can Be Influenced In the Research Process
• Shoppers are uncertain at the onset and are open to influence
• Be omnipresent in the marketplace, as purchase decisions are made quickly
2. Search Drives Prospects to Your Site
• Ensure enough Share of Voice to capture those that only click 1 or 2 times
• Develop a strategy to reach undecided buyers who search on non-brand terms
3. In-Store Buyers Use Search, Just Like Online Buyers
• Use Search to target online buyers and in-store buyers
• Consider how in-store sales factor into the ROI of your Search investment
4. Searchers are More Valuable Customers
• Use Search to attract high spenders and heavy data users
• Tailor key words and messaging to meet interest in high-end phones
Google Confidential and Proprietary 25
Source: Wireless Shoppers Study, Google & Compete

26. Q&A
Sara Kleinberg, Google
Head of Marketing, Technology
Karen Parker, Compete, Inc.
Managing Director, Telecom & Media

27. Appendix

28. Glossary of Key Terms
Wireless Prospect: an in-market wireless consumer at a Big-4 carrier site who exhibits
shopping and researching behavior, but does not log in or do any
customer-centric activities.
Wireless Gross Adds: a metric reported by Big-4 wireless service carriers as well
as smaller wireless service carriers that denotes the number of new lines of service
added each time period. Gross add volumes do not include upgrade or replacement
purchases made by existing customers.
Search Referral: Occurs when a wireless shopper enters a query at a major search
engine and subsequently reaches a wireless web site as a direct result of that query.
Wireless web sites include:
• Wireless Service Carrier web site
• OEM web site
• Agent web site
• Research web site (i.e., blog, forum, etc.)
Search Query: Occurs when a wireless shopper enters a query at a major search engine
but does not necessarily click on it to reach a wireless-specific site
Search Term Buckets: Compete and Google separated search terms into two buckets,
branded (Verizon cell phone, Motorola enV, etc.) and non-branded (wireless phone, 3G
Google Confidential and Proprietary 28
handset, etc.)