The document discusses the future of internet automotive advertising. It notes that in 1999, analysts predicted car buyers would start purchasing vehicles entirely online through a "direct model," bypassing dealerships. However, the transition has been gradual. While the internet now heavily influences research and many purchases, people still prefer buying from people in person. Dealerships remain important but their role is changing. The document examines how the internet impacts different stages of car shopping and what information sources buyers find most helpful at each stage.

1. The Future of Internet Automotive Advertising October 18, 2007

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

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

32. Thank You [email_address] 35