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Chip Perry at J.D. Power and Associates Automotive Internet Roundtable

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Chip Perry from Autotrader.com at J.D. Power and Associates Automotive Internet Roundtable

Chip Perry from Autotrader.com at J.D. Power and Associates Automotive Internet Roundtable

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  • 1. The Future of Internet Automotive Advertising October 18, 2007
  • 2.
      • “ Detroit’s going to be scared [of the direct online sales model].”
      • -Forrester Research, May, 1999
      • “ Detroit’s going to be scared [of the direct online sales model].”
      • - Forrester Research
      • May, 1999
  • 3.
      • “ Detroit’s going to be scared [of the direct online sales model].”
      • -Forrester Research, May, 1999
      • “ Everywhere I go, people always ask if we could do the Dell model in cars and when is it going to happen.”
      • -Michael Dell
      • May, 1999
  • 4.
      • “ Detroit’s going to be scared [of the direct online sales model].”
      • -Forrester Research, May, 1999
      • “ We’ll keep the [dealership] land, but we won’t have people on the showroom floor.”
      • -idealab chairman on the Michael Dell-backed direct Internet sales model
      • May, 1999
  • 5.
      • “ Detroit’s going to be scared [of the direct online sales model].”
      • -Forrester Research, May, 1999
      • “ Analysts predict the direct model will eventually win out…”
      • -Citi Financial
      • March, 2000
  • 6.
      • “ Detroit’s going to be scared [of the direct online sales model].”
      • -Forrester Research, May, 1999
      • “ By 2006, 32% of all U.S. new car sales—totaling 5.7 million vehicles—would take place online…”
      • -e-marketer.com
      • December, 2002
  • 7. Key Takeaways
    • “ Media model” will continue to dominate the scene
    • Awkward transition phase will continue for awhile
    • More holistic shopping experience will emerge
  • 8. People still buy cars from people… And will continue to buy from people! 3
  • 9. The name of the game is NOT… 4
  • 10. Context for Automotive Marketing (Pre-Internet) Prior to the advent of the Internet communicating with a potential car buyer was a proposition Key Consumer Decisions Media Marketers Action
  • 11. Context for Automotive and Dealer Marketing to Consumers (Pre-Internet) Marketers Traditional Media TV Radio Magazine Outdoor Newspaper Key Consumer Decisions Action Vehicle Purchase Which vehicle? When to buy? Which dealer? Right Price? Ad Associations Dealers OEMs Tier 1 Tier 2 Tier 3 Tier 3 Tier 3 Tier 3
  • 12. Today’s Context is Different Marketers TraditionalMedia Ad Associations Key Consumer Decisions Action Vehicle Purchase Which vehicle? When to buy? Which dealer? Right Price? Dealers OEMs Internet
  • 13. The Internet Efficiently & Effectively Influences All Key Consumer Decisions Key Consumer Decisions Which vehicle? When to buy? Which dealer? Right Price? 65% will buy in next 60 days 1 28% Impacted by Internet 2 1 MORPACE; AutoTrader.com User Profile Study 2 J.D. Power and Associates; 2007 New Autoshopper.com Study 3 R.L Polk New Vehicle Shopping Media Usage 59% considering multiple vehicles 1 Most Important Item Researched Online 3 Action Vehicle Purchase
  • 14. Car Shoppers Are Bombarded by Automotive Advertising What’s sticking? 9
  • 15. Key Research Questions
    • 1. What sources of information are most helpful in your new car buying decision?
    • 2. What are the most important kinds of information you need?
  • 16. Buyers Consider Multiple Vehicles Middle Phase Final Phase Beginning Phase Average Number of Vehicles Considered Source: R.L. Polk CO., 2007 New Vehicle Shopping Media Usage.
  • 17. Length of New Car Shopping Process On average consumers take slightly less than 3 months shopping for a new car Q24. How many month(s) did the entire new vehicle shopping process take you from start to end?
  • 18. Consumer Ratings of Car Shopping Information Sources Overall, the Internet and the Dealership visit are considered Most Helpful throughout the Entire Process. QUESTION Thinking about all of the sources of information used during the Beginning, Middle, Final, & Entire process, please rank order the sources according to how helpful they are. Source: R.L. Polk CO., 2007 New Vehicle Shopping Media Usage. 10
  • 19. Most important information consumers say they “need” to know when shopping for a new car PRICE INFORMATION QUALITY/RELIABILITY INFORMATION GAS MILEAGE INFORMATION SAFETY INFORMATION MAKE/MODEL INFORMATION 13
  • 20. QUESTION What one source of information (TV, Internet, etc) did you find most helpful with each of the items that you needed during the entire process? Source: R.L. Polk CO., 2007 New Vehicle Shopping Media Usage. Most important information consumers say they “need” to know when shopping for a new car 14
  • 21. Dealer Spending vs. Car Shoppers’ Preferred Media Source: NADA Data 2007 Report. R.L. Polk CO., 2007 New Vehicle Shopping Media Usage. 25
  • 22. Media Share of Ad Spend 27 Internet Other Radio Television Newspapers/ Print
  • 23. QUESTION Internet sites offer different features to assist new car buyers. Not all sites offer the same array of features. Rank order the first five most helpful features during the vehicle buying process. Source: R.L. Polk CO., 2007 New Vehicle Shopping Media Usage. Most important information consumers say they “need” to know when shopping for a new car 15
  • 24. Importance of Inventory 16
  • 25. 17 Importance of Inventory Tier 2 Tier 3 – Used Tier 1 Tier 3 – New
  • 26. 21 Importance of Specials Tier 1 Tier 2 Tier 3
  • 27. Challenge: Proliferation and Complexity of Vehicle Options 29
  • 28. Personalized, Psychographic Approach 30 e.g. Professional, Families, Young Couples
  • 29. Most important information consumers say they “need” to know when shopping for a new car PRICE INFORMATION QUALITY/RELIABILITY INFORMATION GAS MILEAGE INFORMATION SAFETY INFORMATION MAKE/MODEL INFORMATION 13
  • 30. One Stop Shopping: A Comprehensive Approach 34
  • 31. Implications
    • Things won’t get simpler for awhile
    • Marketing and sales process re-engineering has just begun
    • OEMs and Tier 2 players will get better at fighting for consideration
    • Get ready for an interesting Third Party “Arms Race”
    • Ad spending shift from traditional media to Internet will accelerate
  • 32. Thank You [email_address] 35

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