The document discusses how consumers research and shop for new vehicles at local dealerships. It finds that most consumers spend over a week researching online before visiting dealerships. Search engines and dealership/manufacturer websites are the top online resources used, with search being critical for learning about vehicles, finding dealer reviews and inventory, and locating nearby dealerships. The majority of consumer visits are within 20 miles of home. Dealership review sites and social media are emerging as influential resources.

1. LOCAL AUTOMOTIVE DEALERSHIPS THE ROLE OF INTERACTIVE MEDIA IN THE LOCAL CAR SHOPPING PROCESS Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

2. Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved. 1 2 How Consumers “Pre-Shop” for a Dealership Engaging Consumers Before They Set Foot on Your Lot How Consumers Use Search When Pre-Shopping The Impact of Price Quotes Connecting with Your Most Important Consumer Executive Summary & Implications 3 4 5 6

3. OBJECTIVES To understand how the dealership research process has changed over time To understand the impact of search in the overall media mix for automotive dealership research To identify which resources consumers are using and whether their research is fruitful To determine which resources are most important to the decision making process To identify the most valuable consumers auto dealerships should engage Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

4. METHODOLOGY Methodology 25 minute online questionnaire Interview Dates May 30 th to June 4 th 2007 Sample Size N = 550 Respondents Next 6 Month Auto Purchase Intenders (262) Past 3 Month Auto Purchasers (288) Sample Characteristics Live in major metropolitan areas Primary/shared auto purchase decision maker Visited at least one dealership Exclude specialty brands Critical industry screen (Advertising/Market Research, Automotive sales/products/services, Internet service provider/website portal) Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

5. HOW CONSUMERS “PRE-SHOP” FOR A DEALERSHIP Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

6. Base: Total Respondents (550) Q8 About how long did you research vehicles on your own before you started visiting dealerships? How long did you research before you started dealership visits? The majority of consumers spend more than a week pre-shopping for dealerships before they step foot on your lot None A week or less More than a week but less than a month 1-2 months 3-6 months Over 6 months

7. … with the majority researching online & using search for vehicle dealership research Base: Total Respondents (550) Q4 When researching auto dealerships, which of these online search engines did you use to obtain information? (Please select all that apply.) QS10 Which of the following resources ‘did you use to gather information while shopping for your new vehicle?’ OR ‘are you using to gather information while shopping for your new vehicle?’ Q0 You mentioned that you used the resources shown below to research and shop for new vehicles. How did you reach each of these websites? Did research before walking into a dealership 88% Used the Internet to research vehicles 83% Used Search to research auto dealerships 79%

8. Consumers proactively pre-shop dealerships online before their actual visit… Did you do any of the following before actually visiting the dealership? (Select all that apply) Base: Total Respondents (550) Q14 Thinking about the last dealership you visited, did you do any of the following before actually visiting the dealership? Viewed cars/models available at the dealerships online See if they had a dealership website Find reviews about the dealership online Called to see what cars/models were available Checked newspaper classifieds to try to find more information on the dealership Used the yellow pages to look for the dealership

9. … in fact, they rely more on the Internet today in helping them find the right dealer Base: Total Respondents (550); Purchased a new vehicle prior to 2007 (492); Relied less on resources during last purchase: Social networking tools (37); E-mails from dealership (107); Dealership sites (171); Manufacturer sites (168); Search engines (184); Independent vehicle sites (117) Q17 Prior to 2007, when was the last time you were in market to purchase or lease a brand new vehicle? Q19 Compared to your [INSERT THE YEAR ENTERED AT Q14] vehicle purchase, please tell us whether you relied on the following in helping you find dealerships to visit, the same amount, or less compared to your 2007 vehicle research experience. [… relied on more] Compared to my last vehicle purchase (2002 on avg), I rely on these sources more … Social networking tools E-mails from dealership Dealership sites Manufacturer sites Search engines Independent vehicle sites

10. Consumers visit an average of 6 dealerships , but tend to shop for only one brand per dealership Base: Total Respondents (550); Those Responding QS6 Please select the statement that best describes your consideration of each make listed below. QS7 How many dealerships did you visit for each make?

11. Base: Total Respondents (546)* * Don’t know responses removed QS8 Again thinking about the dealerships you visited, think about how far each dealership was from your home. In miles, please tell us the distance between your home and the farthest dealership you visited for each make. 68% of consumers are not willing to travel more than 20 miles 32% of consumers are willing to travel farther than 20 miles … a third of consumers will drive more than 20 miles from home How far away were each of the dealerships you visited?

12. Base: Total Respondents (546) QS8 Again thinking about the dealerships you visited, think about how far each dealership was from your home. In miles, please tell us the distance between your home and the farthest dealership you visited for each make. 79% of consumer visit s are within 20 miles of their home 21% of consumer visit s are over 20 miles of their home 21% of total visit s are over 20 miles from their homes How far away were each of the dealerships you visited?

13. ENGAGING CONSUMERS BEFORE THEY SET FOOT ON YOUR LOT Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

14. Base: Total Respondents (550) Q1a-Q1d Thinking about dealerships you’ve visited, which of the following… made you aware of the dealerships?/helped you locate the dealerships? Search is one of the top sources used to become aware and locate car dealerships How do consumers find and choose which dealerships to visit? (Choose from a list of 18 sources) Driven by or seen before Friends & Family Search engines Dealer websites OEM websites TV ads Yellow Pages

15. Base: Those Responding: Search engines (229); Dealership websites (204); Manufacturer websites (190); OEM websites (190); Independent websites (125); Social networking tools (43)  Indicates percentage is significantly higher than the all-source average at 95% confidence Q3 Now, thinking specifically about each of the resources you used to research dealerships, which of the following helped you… Online sources are critical throughout the dealership purchase funnel I used the following online sources to… SEARCH ENGINES DEALERSHIP WEBSITES OEM WEBSITES 3 RD PARTY CONTENT SITES SOCIAL NETWORKING Learn about vehicle makes/models     Get a feel for the dealership   Find other buyer reviews on dealerships    Find out how many dealers were close to where I live   Find out if dealerships had any special offers  Find out dealership inventory on cars/models I want   Look up dealership address and contact info   

16. Base: Those Responding: Newspaper inserts/classified ads (173); Radio ads (105) ; Local phone books (147); TV Ads (177); Magazines (68)  Indicates percentage is significantly higher than the all-source average at 95% confidence Q3 Now, thinking specifically about each of the resources you used to research dealerships, which of the following helped you… Offline sources are less comprehensive than online resources when offering dealership information I used the following offline sources to… NEWSPAPER CLASSIFIEDS RADIO ADS YELLOW PAGES TV ADS MAGAZINES Learn about vehicle makes/ models  Get a feel for the dealership  Find other buyer reviews on dealerships Find out how many dealers were close to where I live  Find out if dealerships had any special offers  Find out dealership inventory on cars/ models I want Look up dealership address and contact info 

17. Base: Total Respondents (550); Open to using a review site (543) Q7a Now we’d like you to imagine there was a dealership review site providing customer satisfaction ratings generated by other customers who visited or did business with the dealerships in your area. How likely would you be to use this type of site? Q7b And how likely would you be to post your own reviews or comments about local dealerships on this site? … use a dealership review site? … post comments on a dealership review site? The emergence of social networks will ultimately drive consumers to actively participate in dealership ratings How likely would you be to…? Top 2 Box: 72% 58%

18. HOW CONSUMERS USE SEARCH WHEN PRE-SHOPPING Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

19. Search is the top source used to navigate to automotive websites How did you reach each of the websites you used to research and shop for new vehicles? Base: Used Source: Auto Manufacturer Websites (285); Dealership Websites (270); Independent Vehicle Help Websites (214) Q0 You mentioned that you used the resources shown below to research and shop for new vehicles. How did you reach each of these websites? AUTO MANUFACTURER WEBSITES DEALERSHIP WEBSITES 3 RD PARTY CONTENT WEBSITES Used a search engine 56% 58% 57% Knew the website address 45% 29% 41% Guessed the website address 36% 23% 19% From an independent vehicle help website 22% 21% - Got the web address from an advertisement 21% 27% 19% Clicked on Internet display advertising 16% 18% 18% Used an e-mail link 13% 23% 18% From an auto manufacturer website - 40% 23%

20. Search is the desired research tool for identifying, locating, and reviewing dealerships Which of the following resources helped you…? Base: Those Responding: Search Engines (229) Q3 Now, thinking specifically about each of the resources you used to research dealerships, which of the following helped you… SEARCH ENGINES Find out how many dealers were close to where I live Look up dealership address and contact info Learn about vehicle makes/models Find other buyer reviews on dealerships Find out dealership inventory on cars/models I want Find out if dealerships had any special offers Get a feel for the dealership

21. Consumers use a variety of search strategies to find auto dealerships What types of keywords did you use when looking for a dealer? Base: Used a Search Engine to Shop for Dealerships (433) Q5 Thinking about all the search engine queries you made to try to find auto dealerships, what types of keywords did you enter into the search engines to generate results? Make and/or model I was interested in City and/or state Zip code Specific dealership name General automotive keywords MM & city and/or state 34% MM & zip code 32% MM & specific dealership name 29% MM & general keywords 21% MM [Only] 17%

22. Base: Searchers (433); Non-Searcher (117)  /  Indicates percentage is significantly higher/lower than Non-Searchers at 95% confidence QS7 How many dealerships did you visit for each make? QS8 Again thinking about the dealerships you visited, think about how far each dealership was from your home. In miles, please tell us the distance between your home and the farthest dealership you visited for each make. Q1a/Q1b/Q1c/Q1d Thinking about dealerships you’ve visited, which of the following… made you aware of the dealerships?/helped you locate the dealerships? Q11 How many requests for price quotes did you submit on the Internet? Your best guess is fine. Searchers cross shop heavily and are willing to go out of their way to find dealerships Searcher vs. Non Searcher - Differences SEARCHERS (79% of car shoppers) NON-SEARCHERS (21% of car shoppers) # Dealerships visited (total) 7 3 Willing to drive over 20 miles to visit a dealership 35% 18% Average number of sources used to find and locate dealerships 6 3 Average number of price quotes requested 3 1

23. THE IMPACT OF PRICE QUOTES Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

24. Consumers frequently submit their quotes on dealership websites Did you submit any requests for prices quotes on the internet? Base: Total (550); Submitted a price quote (346) Q11 How many requests for price quotes did you submit on the Internet? Q12 What kind of site(s) did you use to submit your price quote? What types of sites did you use to submit your price quote? GOT A QUOTE DID NOT GET A QUOTE Dealership websites 3 rd Party Content Portals Auto manufacturer websites Other

25. Dealerships need to proactively service and answer questions in order to convince a consumer to visit Actions done to convince you to visit dealership… (Among Those Who Submitted a Quote and Visited a Dealership) Base: Visited a dealership to which submitted price quote (231) Q15 Earlier, you said a visited a dealership from which you submitted a price quote to. Thinking about that visit, which of the following best describes the actions taken by the dealership staff to get you to visit? (Please select all that apply.) Received an email Answered all of my questions Offered me a competitive price Offered competitive amount for my trade-in Received direct mail Did not proactively contact me

26. Among those that chose not to visit, price and location are barriers to dealership visits Why didn't you visit? Base: Did not visit a dealership to which submitted a price quote (95) Q13b You mentioned that you did not visit any of the dealerships to which you submitted price quotes. Why did you not visit any of those dealerships? DIDN'T VISIT “ They did not respond in a timely manner.” “ Took too long to respond… I bought within 72 hours.” “ Because they never sent me a quote.” PRICE (NET) 26% Too expensive 21% Better deal elsewhere 5% LOCATION (NET) 20% Too far/not in my area 16% Prefer to buy from local dealership 7% SELECTION (NET) 5% Wanted other type of vehicle 4% BOUGHT FROM ANOTHER DEALERSHIP 5% NO RESPONSE FROM DEALER 5% ’ ‘ ’ ‘ ’ ‘

27. CONNECTING WITH YOUR MOST IMPORTANT CONSUMER Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

28. What makes a brand advocate? SOURCE: Y! Study |December 2006 "Engaging Advocates through Search & Social Media" - Consumer Electronics OF THE POPULATION 33% I GO OUT OF MY WAY TO RECOMMEND GOOD PRODUCTS AND BRANDS TO MY FRIENDS AND FAMILY A GOOD BRAND IS WORTH TALKING ABOUT I OFTEN TELL FRIENDS ABOUT PRODUCTS THAT INTEREST ME I TEND TO BE ONE OF THE FIRST AMONG MY FRIENDS TO TRY NEW PRODUCTS I AM A NATURAL LEADER; PEOPLE ALWAYS LISTEN TO MY OPINIONS OTHERS LOOK TO ME FOR ADVICE WHEN IT COMES TO TECHNOLOGY I CONSIDER MYSELF SOCIAL AND WELL-CONNECTED

29. Why Advocates Should Be Important to You Advocates are more open to influence, considering more brands prior to making an auto purchase They come out of the buying process more satisfied with their purchases - leading to longer lifetime value Half of these advocates write about their purchases online, with a significant majority writing something positive (90%) Advocates convert their friends to buy the same auto make & brand they've purchased at a 2 to 1 ratio versus a normal consumer SOURCE: Y! Study |December 2006 "Engaging Advocates through Search & Social Media" - Consumer Electronics

30. Base: Brand Advocates (180); Non-Brand Advocates (370) Q1a-Q1d Thinking about dealerships you’ve visited, which of the following… made you aware of the dealerships?/helped you locate the dealerships? Q4 When researching auto dealerships, which of these online search engines did you use to obtain information? (Please select all that apply.) QS10 Which of the following resources ‘did you use to gather information while shopping for your new vehicle?’ OR ‘are you using to gather information while shopping for your new vehicle?’  /  Indicates percentage is significantly higher/lower than Non Brand Advocates at 95% confidence Advocates are much heavier researchers and leverage online sources significantly more Brand Advocate vs. Non Brand Advocate - Differences BRAND ADVOCATES NON-BRAND ADVOCATES Average number of sources used to find and locate dealerships 7 5 Average number of sources used to research vehicles 6 4 Used a search engine when shopping for dealership 85% 76% Used an independent website when shopping for a dealership 28% 20% Used an independent website when shopping for the actual vehicle 43% 37%

31. Advocates are significantly more likely to use or post on potential dealership review sites How likely would you be to use a dealership review site? Base: Brand Advocates (180); Non-Brand Advocates (370) Q7a Now we’d like you to imagine there was a dealership review site providing customer satisfaction ratings generated by other customers who visited or did business with the dealerships in your area. How likely would you be to use this type of site? Base: Open to using a dealership review site (Brand Advocates/Non-Brand Advocates) (178/365) Q7b And how likely would you be to post your own reviews or comments about local dealerships on this site?  /  Indicates percentage is significantly higher/lower than Brand Advocates at 95% confidence How likely would you be to post comments on a dealership review site? Top 2 Box: 82% 68% Top 2 Box: 70% 51%

32. Brand Advocates are +50% more likely to recommend dealerships to friends and family… Have you referred any friends or family to a specific dealership before? Base: Brand Advocates (180); Non-Brand Advocates (370)  /  Indicates percentage is significantly higher/lower than Brand Advocates at 95% confidence Q20 Have you referred any friends or family members to a specific dealership before?

33. … and as a result of W-O-M, their friends will visit and more likely purchase from these dealers After you told your friends and family about the dealership, what did they do? Base: (Brand Advocates/Non-Brand Advocates) Recommended a dealership: (107/150)  /  Indicates percentage is significantly higher/lower than Brand Advocates at 95% confidence Q22 And after you told your friends or family members about the dealership, did they do any of the following?

34. Implications for Marketers Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

35. Implications Customers are now viewing the dealership website as an extension of the showroom, and as such dealers need to provide a top quality online experience to generate new car sales 4 in 5 new car shoppers use search to find and research dealerships, which creates a huge opportunity for marketers seeking to target customers low in the purchase funnel Dealership and brand loyalty declining as consideration sets for both are growing Dealers can extend their footprint by marketing online, as search users are significantly more willing to travel long distances to visit dealerships Dealership reputation is becoming increasingly important as customers have the tools and inclination to affect that reputation through social media outlets

36. THANK YOU contact sbeckers@yahoo-inc.com Q U E S T I O N S ? Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.