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2008 J.D. Power Automotive Online Marketing Review
 

2008 J.D. Power Automotive Online Marketing Review

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Automotive Online Marketing

Automotive Online Marketing
Review from the 2008 JD Power Automotive Roundtable

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    2008 J.D. Power Automotive Online Marketing Review 2008 J.D. Power Automotive Online Marketing Review Presentation Transcript

    • Automotive Online Marketing Review Gene Cameron, VP Marketing/Media Solutions Scott Kane, Senior Research Manager October 7th, 2008 © 2008 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
    • 2008 U.S. new vehicle sales will total about 14 million, the lowest annual result since 1993 Total U.S. New Light Vehicle Sales 18 Total New Light Vehicle Sales (Millions) 17 16 15 Record Year - 17.4 Million Units 14 13 12 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008* *JDPA Forecast Source: J.D. Power and Associates © 2008 J.D. Power and Associates, 2 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • With higher gas prices, cars are now out-selling light trucks by a substantial margin Car and Light Truck Share Ca r Sha re Truck Sha re 60% % of U.S. New LIght Vehicle Sales s 50% 40% 30% 20% 10% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008* *August YTD Source: J.D. Power and Associates © 2008 J.D. Power and Associates, 3 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Compact vehicles have gained share at the expense of both Midsize and Large vehicles Mix Based on Vehicle Size Com pa ct Sha re Midsize Sha re La rge Sha re 60% % of Total U.S. New LIght Vehicle Sales 50% 40% 30% 20% 10% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008* *August YTD Source: J.D. Power and Associates © 2008 J.D. Power and Associates, 4 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Online budgets are being reigned in this year. Reaching shoppers efficiently is more important than ever Automotive Internet Advertising Spending OEMs Dealers and associations Top third-party sites 400 344 350 Ad Spending (Millions) 300 264 250 200 150 100 80 50 20 0 2005 H1 2005 H2 2006 H1 2006 H2 2007 H1 2007 H2 2008 H1 Source: © 2008 J.D. Power and Associates, 5 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Automotive Internet usage (AIU) rates rise rapidly as shoppers change their purchase behaviors Automotive Internet Usage (AIU) Trends New1 Vs. Used2 – Vehicle Buyers 10-Year Trend New Used 80% 75% 70% 68% 67% 70% 64% 64% 60% 60% 60% 54% 61% 59% 54% 50% 53% 40% 47% 47% 40% 43% 30% 33% 26% 20% 10% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1 Based to new-vehicle buyers. Source: J.D. Power and Associates 1999-2008 New Autoshopper.com Studies 2 Based to used-vehicle buyers. Source: J.D. Power and Associates 1999-2007 Used Autoshopper.com Studies © 2008 J.D. Power and Associates, 6 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • When do buyers begin shopping for vehicles? Average/Median days prior to purchase 89/87 First shopped for any model days before 74/56 First shopped for a model within the vehicle segment which they purchased days before First shopped for the model they 62/29 ultimately purchased days before Based to AIUs. Preliminary Unweighted Data Source: J.D. Power and Associates 2008 Auto Buyer Clickstream Study © 2008 J.D. Power and Associates, 7 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Number of Models Shopped Increases in Month of Purchase Number of Models Timeframe Shopped per Buyer 5 Months Prior 1.0 4 Months Prior 1.1 3 Months Prior 1.1 2 Months Prior 1.2 1 Month Prior 1.5 Purchase Month 3.1 Based to AIUs. Preliminary Unweighted Data Source: J.D. Power and Associates 2008 Auto Buyer Clickstream Study © 2008 J.D. Power and Associates, 8 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Use of Search is also growing, fueled by growth in the use of Google Used Search for Automotive Information 90% 84% 85% % Using Search 81% 80% 75% 70% 2007 2008 Based to AIUs. Source: J.D. Power and Associates 2007/2008 New Autoshopper.com Study © 2008 J.D. Power and Associates, 9 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Online NVBs Increased their use of Automotive search terms the month of purchase Categorized Search Terms throughout the Vehicle Purchase Horizon Percentage of the top 100 search terms by AIUs 50% 45% 40% 3X Increase 35% 30% 25% 20% 15% 10% 5% 0% 5 Months Prior Months 4 PriorMonths 3 Prior Months 2 Prior Months 1 Prior u r c h a s e P Month Retail Automotive Social Networking Search/Portal Directions Based to AIUs. Preliminary Unweighted Data Source: J.D. Power and Associates 2008 Auto Buyer Clickstream Study © 2008 J.D. Power and Associates, 10 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • In 2008, use of Mobile access grew by 21% versus 2007 Mobile / Cell Phone Internet Access 30% 25% % With Mobile Access 18% 20% 15% 15% 10% 5% 0% 2007 2008 Based to AIUs. Source: J.D. Power and Associates 2007/2008 New Autoshopper.com Study © 2008 J.D. Power and Associates, 11 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Mobile should be on some OEMs’ top priorities, but of less concern to others Mobile / Cell Phone Access to the Internet Top 5 Land Rover* 50% Porsche 43% BMW 37% Jaguar* 36% Audi 35% Bottom 5 Suzuki 13% Mercury 11% Buick 11% Hyundai 10% Kia 8% Based to AIUs buying each brand. Source: J.D. Power and Associates 2008 New Autoshopper.com Study *Caution: Small Sample. Land Rover (n=85), Jaguar (n=61) © 2008 J.D. Power and Associates, 12 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Consumer-generated content (CGC) remains an important part of the online shopping process Use of Consumer-Generated Content 80% 69% 69% 70% % Using CGC 60% 50% 2007 2008 Based to AIUs. Source: J.D. Power and Associates 2008 New Autoshopper.com Study © 2008 J.D. Power and Associates, 13 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Vehicle Ratings and Reviews are by far the most used type of CGC % Finding Consumer-Generated Content Usage Helpful* Vehicle 63% 95% Ratings/Reviews Dealer 38% 87% Ratings/Reviews 22% Enthusiast Sites 81% Online Forums/Chat 18% Rooms/Q&A Sites 78% Blogs 12% 69% Videos/Podcasts 10% 66% 0% 10% 20% 30% 40% 50% 60% 70% *Based to AIUs who used each type of CGC Source: J.D. Power and Associates 2008 New Autoshopper.com Study © 2008 J.D. Power and Associates, 14 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • The model purchase decision is impacted by Expert and Consumer Ratings & Reviews Shoppers Using Consumer Shoppers Using Expert Ratings/Reviews (Not Expert) Ratings/Reviews (Not Consumer) Model Purchased Share Model Purchased Share Toyota Camry 3.9% Honda Accord Sdn 3.7% Honda Accord Sdn 3.3% Nissan Altima 3.6% Nissan Altima 3.2% Toyota Camry 3.2% Toyota Yaris 2.8% Honda CR-V 2.9% Toyota Corolla 2.6% Toyota Prius 2.5% Toyota Prius 2.3% Honda Civic Sdn 2.1% Honda Pilot 2.2% Chevrolet Silverado LD 2.0% Ford Focus 2.2% Ford F-150 LD 2.0% Honda Civic Sdn 2.2% BMW 3 Series 1.9% Ford F-150 LD 2.1% Toyota Corolla 1.7% Based to AIUs using either Consumer or Expert Ratings/Reviews, but not the other. Source: J.D. Power and Associates 2008 New Autoshopper.com Study © 2008 J.D. Power and Associates, 15 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Online NVBs are avid users of Social and Video Sites First 6 months 2008 % Reach Index NVB IBP NVB Reach/IBP Reach go.com 74% 20% 371 youtube.com 71% 34% 210 myspace.com 68% 35% 196 facebook.com 49% 19% 261 abc.com 12% 1% 1,541 twitter.com 3% 1% 347 hulu.com 1% 1% 184 Based to Online New Vehicle Buyers. Preliminary Unweighted Data Source: J.D. Power and Associates Total Online Media Behavior © 2008 J.D. Power and Associates, 16 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • As a percentage, online submissions hold relatively steady year-over-year AIUs that Submitted Request for Quote 50% 40% % Requesting Quote 32.1% 31.6% 31.7% 31.0% 29.3% 30% 20% 10% 0% 2004 2005 2006 2007 2008 Based to AIUs. Source: J.D. Power and Associates 2004-2008 New Autoshopper.com Study © 2008 J.D. Power and Associates, 17 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Realistically, 1 of 5 AIUs will never submit a Request for Quote Submit Request May be open to Quote Process Not Likely to Submit a Quote • Prefer to negotiate price in person or by phone • Already have 49% relationship with dealer and know where they’ll next purchase 29% • Use alternate 22% purchasing/discount program • Etc… Based to AIUs. Source: J.D. Power and Associates 2008 Follow-Up Study to NAS © 2008 J.D. Power and Associates, 18 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Fear of dealer contact and doubts about receiving valuable or accurate information deters shoppers from submitting requests Reasons Why Shoppers Did Not Submit a Request for Quote 60% 50% 40% 29% 15% 20% 7% 7% 0% Did not want to be Wouldn’t get Privacy or Identity Wouldn’t get a Tried it before and contacted by valuable / accurate Theft concerns timely response didn’t like it dealer information Based to AIUs that did not submit a request for quote Source: J.D. Power and Associates 2008 Follow-Up Study to NAS © 2008 J.D. Power and Associates, 19 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Providing quality responses to requests is at the heart of the problem Request for Quote - Dealer Response Ratings Timeliness of 7.2 Response Completeness of 6.4 Response 0 2 4 6 8 10 Satisfaction Score Based to AIUs that submitted a request for quote Source: J.D. Power and Associates 2008 Follow-Up Study to NAS © 2008 J.D. Power and Associates, 20 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Active Online Shoppers have a relatively limited use of sites within type Active Online New Vehicle Buyers in 6 Months Prior to Purchase by Type Average Number of Sites Visited of Site Third Party Sites 3.3 OEM Sites 3.1 Dealer Sites 2.6 Based to AIUs. Preliminary Unweighted Data Source: J.D. Power and Associates 2008 Auto Buyer Clickstream Study © 2008 J.D. Power and Associates, 21 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • What do shoppers find most useful about different types of sites? Top 10 Most Useful Content by Type of Site Independent Web Sites Manufacturer Web Sites Dealer Web Sites Research Info/Options, Features, Pricing/Incentives/MSRP 40% 43% Inventory Locator 44% Specs Reviews/Forums/Ratings 21% Pricing/Incentives/MSRP 20% Pricing/Incentives/MSRP 35% Research Info/Options, Features, Compare Vehicles 17% Equip a Vehicle 17% 14% Specs Research Info/Options, Features, 12% Navigation/Easy to Use 15% Navigation/Easy to Use 10% Specs Navigation/Easy to Use 11% Inventory Locator 7% Request Quote/Contact Dealer 7% Trade-In Value 8% Vehicle Images/360 Tool/Video 7% Find a Dealer 6% Vehicle Images/360 Tool/Video 2% Compare Vehicles 4% Vehicle Images/360 Tool/Video 4% Request Quote/Contact Dealer 1% Find a Dealer 4% Compare Vehicles 2% Monthly Payment Monthly Payment Find a Dealer 1% 3% 1% Calculator/Estimate Calculator/Estimate Monthly Payment 1% Request Quote/Contact Dealer 2% Equip a Vehicle 1% Calculator/Estimate Based to AIUs Source: J.D. Power and Associates 2008 New Autoshopper.com Study © 2008 J.D. Power and Associates, 22 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Online New Vehicle Buyers Visit a “Long Tail” of Third-Party Sites Top Third Party Sites Share of Total Third Party Sessions 14% 12% 10% 8% 6% 4% 2% 0% rg m m m m m m m m m m m m m m o o m o co o rg co o co co o o o s. co .c c .c o .c o o c .c c .o t. r. l. .c .c l. rt .c s. o x. sn e x. s. te b e c ao o v v ix rs o e b a e ad a d e m ah m ti id p kb y rf w rm h n ir s. a d o e b s. tr e u u y to c a d rr to m to v m s. ag a to c rs to au to e c d au au to au a m ad au e au c au su n n co Based to AIUs. Preliminary Unweighted Data Source: J.D. Power and Associates 2008 Auto Buyer Clickstream Study © 2008 J.D. Power and Associates, 23 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Carving out a niche is important to growing and sustaining a useful site Top 10 Most Useful Site Content Independent Kelley Blue Edmunds.com Cars.com Vehix.com Site Visitors Book Pricing/Incentives/MSRP 40.2% 47.9% 53.7% 28.5% 7.8% Reviews/Forums/Ratings 20.9% 29.6% 8.4% 13.5% 5.3% Compare Vehicles 17.4% 16.1% 7.0% 24.3% 59.3% Research Info/Options, Features, Specs 12.1% 12.5% 6.0% 9.8% 13.5% Navigation/Easy to Use 11.0% 8.4% 7.4% 27.6% 16.3% Trade-In Value 7.8% 4.4% 27.0% 1.9% 0.0% Vehicle Images/360 Tool/Video 1.5% 0.6% 0.1% 8.1% 5.3% Request Quote/Contact Dealer 1.5% 1.6% 0.2% 2.9% 1.3% Find a Dealer 1.4% 1.0% 0.2% 8.4% 3.4% Monthly Payment Calculator/Estimate 0.8% 0.7% 0.8% 4.7% 1.2% Based to AIUs visiting each site who thought that site was most useful Source: J.D. Power and Associates 2008 New Autoshopper.com Study © 2008 J.D. Power and Associates, 24 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Getting more traffic to the brand site is great, as long as it’s the right traffic Top 15 Visited OEM Sites—Year-Over-Year Analysis 20% Saturn 15% % Change in Visitation Nissan 10% Volkswagen 5% 0% -5% -10% Hyundai Jeep -15% -40% -30% -20% -10% 0% 10% 20% 30% % Change in Close Rate Visitation: Based to AIUs. Close Rate: Based to AIUs visiting each site. Source: J.D. Power and Associates 2008 New Autoshopper.com Study © 2008 J.D. Power and Associates, 25 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Summary Observations • Difficult market – Tighter sales – Major shifts in purchase patterns by Segment • Increasing Internet use with shifts in patterns, fragmentation – Consideration counts are not expanded for models or sites used for shopping – Third Party Sites exhibit long tail, suggesting fragmentation – CGC, Mobile, Video, ? – Shoppers/Buyers in new territory, use of internet • Request for Quote is only effective if it responds to shoppers, is complete, not just rapid © 2008 J.D. Power and Associates, 26 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Summary Observations • Challenge to become more efficient and effective • Targeting more important than ever, customize targeting – Join the conversation Common interest Add value Build engagement Relevant traffic that converts • Understand shoppers, position your site and marketing to give them a reward • Leverage information throughout the organization © 2008 J.D. Power and Associates, 27 The McGraw-Hill Companies, Inc. All Rights Reserved.
    • Thank you! © 2008 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.