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

Role Interactive Media Car Shopping Process

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Page 1: Role Interactive Media Car Shopping Process

LOCAL AUTOMOTIVE

DEALERSHIPS

THE ROLE OF INTERACTIVE MEDIA IN THE LOCAL CAR SHOPPING

PROCESS

Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.

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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

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Page 3: Role Interactive Media Car Shopping Process

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.

Page 4: Role Interactive Media Car Shopping Process

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)

METHODOLOGYMethodology25 minute online questionnaire

Interview DatesMay 30th to June 4th 2007

Sample SizeN = 550 Respondents

• Next 6 Month Auto Purchase Intenders (262)

• Past 3 Month Auto Purchasers (288)

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HOW CONSUMERS

“PRE-SHOP”

FOR A DEALERSHIP

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Yahoo! Search Marketing Proprietary and Confidential. © 2007. All Rights Reserved.Base: Total Respondents (550)Q8 About how long did you research vehicles on your own before you started visiting dealerships?

12%

23%34%

19%

8%4%

None

A week or less

More than a week but less than a month

1-2 months

3-6 months

Over 6 months

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

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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 dealership88

% Used the Internet to research vehicles83

%

…with the majority researching online & using search for vehicle dealership research Used Search to

research auto dealerships79

%

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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

48%

37%

23%

20%

11%

12%

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…in fact, they rely more on the Internet today in helping them find the right dealer

41%

30%

25%

23%

16%

16%

Social networking tools

E-mails from dealership

Dealership sites

Manufacturer sites

Search engines

Independent vehicle sites

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…

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Consumers visit an average of 6 dealerships, but tend to shop for only one brand per dealership

Base: Total Respondents (550); Those RespondingQS6 Please select the statement that best describes your consideration of each make listed below. QS7 How many dealerships did you visit for each make?

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Base: Total Respondents (546)** Don’t know responses removedQS8 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?

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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 visits are within 20 miles of their home

21% of consumer visits are over 20 miles of their home

21% of total visits are over 20 miles from their homes

How far away were each of the dealerships you visited?

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ENGAGING CONSUMERS BEFORE THEY SET FOOTON YOUR LOT

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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 dealershipsHow do consumers find and choose which dealerships to visit? (Choose from a list of 18 sources)

67%

40%36%

31% 29% 29%

19%

64%

30% 30%26%

20% 20% 21%

Made me AWARE of dealerships Helped me LOCATE the dealerships

Driven by or seen

before

Friends &

Family

Search engines

Dealer website

s

OEM website

s

TV ads Yellow Pages

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SEARCH ENGINES

DEALERSHIP

WEBSITESOEM

WEBSITES

3RD PARTY CONTENT

SITES

SOCIAL NETWORKI

NG

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

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% confidenceQ3 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 funnelI used the following online sources to…

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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

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% confidenceQ3 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…

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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?

26% 27%

47%31%

Very likely

Somewhat likely

Top 2 Box: 72% 58%

…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 ratingsHow likely would you be to…?

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HOW CONSUMERS USE SEARCH WHEN PRE-SHOPPING

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Search is the top source used to navigate to automotive websitesHow 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

WEBSITESDEALERSHIP WEBSITES

3RD 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%

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Search is the desired research tool for identifying, locating, and reviewing dealerships

Which of the following resources 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

49%

49%

47%

43%

33%

29%

21%

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…

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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?

70%

44%

44%

43%

29%

Make and/or Make and/or model I was model I was

interested ininterested 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

name29%

MM & general keywords 21%

MM [Only] 17%

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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

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 dealershipsSearcher vs. Non Searcher - Differences

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THE IMPACT OF PRICE QUOTES

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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?

67%

42%

36%

5%

Dealership websites

3rd Party Content Portals

Auto manufacturer

websites

Other

What types of sites did you use to submit your price quote?

63%

GOT A QUOTE

DID NOT

GET A QUOTE

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59%

53%

50%

29%

22%

5%

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

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.)

Dealerships need to proactively service and answer questions in order to convince a consumer to visitActions done to convince you to visit dealership… (Among Those Who Submitted a Quote and Visited a Dealership)

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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?

32%

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%

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.”

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CONNECTING WITH YOUR MOST IMPORTANT CONSUMER

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What makes a What makes a brand brand advocate?advocate?

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

SOURCE: Y! Study |December 2006"Engaging Advocates through Search & Social Media" - Consumer Electronics

OF THE POPULATION

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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

Why Advocates Should Be Important to You

SOURCE: Y! Study |December 2006"Engaging Advocates through Search & Social Media" - Consumer Electronics

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BRAND ADVOCATES

NON-BRANDADVOCATES

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%

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 moreBrand Advocate vs. Non Brand Advocate - Differences

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Advocates are significantly more likely to use or post on potential dealership review sitesHow 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?

21% 28%

61% 40%

BrandAdvocates

Non-BrandAdvocates

Very likely

Somewhat likely

24% 28%

46%23%

BrandAdvocates

Non-BrandAdvocates

Top 2 Box: 82%

68%

Top 2 Box: 70%

51%

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Base: Brand Advocates (180); Non-Brand Advocates (370)/ Indicates percentage is significantly higher/lower than Brand Advocates at 95% confidenceQ20 Have you referred any friends or family members to a specific dealership before?

60%

41%

Brand Advocates Non-Brand Advocates

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?

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Visited the dealership

Purchased a vehiclefrom the dealership

Plan on visiting soon

Don't Know

Base: (Brand Advocates/Non-Brand Advocates) Recommended a dealership: (107/150)/ Indicates percentage is significantly higher/lower than Brand Advocates at 95% confidenceQ22 And after you told your friends or family members about the dealership, did they do any of the

following?

… and as a result of W-O-M, their friends will visitand more likely purchase from these dealers

After you told your friends and family about the dealership, what did they do?

10%27%10%

19%34%

26%

46%28%

BrandAdvocates

Non-BrandAdvocates

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Implications for Marketers

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Implications

1. 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

2. 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

3. Dealership and brand loyalty declining as consideration sets for both are growing

4. Dealers can extend their footprint by marketing online, as search users are significantly more willing to travel long distances to visit dealerships

5. Dealership reputation is becoming increasingly important as customers have the tools and inclination to affect that reputation through social media outlets

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THANK YOU

contact [email protected] U E S T I O N S ?

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