© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. Online Automotive Shopping Gene Cameron Vice President, Media Marketing Solutions Steve Witten Executive Director, Automotive Research

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 2 1 Based to new-vehicle buyers. Source: J.D. Power and Associates New Autoshopper.com Studies 2 Based to used-vehicle buyers. Source: J.D. Power and Associates Used Autoshopper.com Studies Automotive Internet Usage (AIU) Trends New 1 – Vs. Used 2 – Vehicle Buyers 9-Year Trend Automotive Internet usage (AIU) rates continue to increase ^Preliminary Data % of All Buyers

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 3 Based to late model used-vehicle buyers Source: J.D. Power and Associates Used Autoshopper.com Studies 23% of late-model used vehicles sold are sourced online ^ ^Preliminary Data % of All Buyers

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 4 Based to new-vehicle buyers Source: J.D. Power and Associates New Autoshopper.com Studies Request for online quote is not growing for new- vehicle sales % of All Buyers Visited Dealer Found Online 39%

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 5 1 Based to AIUs. Source: J.D. Power and Associates New Autoshopper.com Studies Types of Web Sites Visited by New-Vehicle Online Shoppers Manufacturer sites are more popular than independent sites among new-vehicle buyers % of AIU’s

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 6 1 Based to AIUs. Source: J.D. Power and Associates New Autoshopper.com Studies First Auto Site Visited by New-Vehicle Online Shoppers Manufacturer sites are just as likely as independent sites to be the first site visited % of AIU’s

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 7 1 Based to AIUs. Source: J.D. Power and Associates New Autoshopper.com Studies Most Useful Type of Site Visited by New-Vehicle Online Shoppers Manufacturer sites are catching up to the independent sites in being “most useful” % of AIU’s

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 8 Based to AIUs Source: 2007 J.D. Power and Associates New Autoshopper.com & Used Autoshopper.com Studies Consumer ratings are the most frequently used consumer generated media 55% = Very Helpful

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 9 The Vehicle Shopping Process

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 10 The Funnel Still Exists Consideration Purchase Awareness Familiarity Visit Dealer → Make them aware of your model → Show your model is for them → Convince them to consider your model → Convince them to shop your dealership → Convince them to purchase your vehicle The Goals

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 11 Different media channels are more effective at distinct stages of the shopping funnel Consideration Purchase Awareness Familiarity Visit Dealer Marketing Channel TV Ads Magazines Internet Newspapers Events

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 12 Upper funnel marketing requires different metrics Consideration Purchase Awareness Familiarity Visit Dealer → Change in awareness → Improvement in familiarity → Improvement of opinion → Click on ad → Click to site → Build a vehicle → Search inventory → Search for dealer info → Request a quote Measures of Success

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 13 Consumer Shopping Process 1.Should I be in market? –Resale value/condition of current vehicle –Change in vehicle needs –“Gotta have” new model 2.Which models meet my needs? –Price, styling, reliability, size –Previous experience –Advice from friends 3.Where should I purchase? –Price –Convenient location –Service

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 14 Decide on type of vehicle Start visiting dealers The new-vehicle shopping process takes about three months for the average AIU Decide it was time to purchase Shop vehicles on the Internet Start actively researching vehicles Decide on model Purchase new vehicle Source: 2007 J.D. Power and Associates New Autoshopper.com Study. Based to AIUs.

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 15 Decide on type of vehicle Start visiting dealers The process is not much different for late-model used vehicle buyers Decide it was time to purchase Shop vehicles on the Internet Start actively researching vehicles Decide on model Purchase new vehicle Source: 2007 J.D. Power and Associates Used Autoshopper.com Study. Based to AIUs. Preliminary Data

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 16 One-third of new-vehicle buyers purchase within one month of deciding they need a new vehicle 34% Shopping Process One Month or less 27% Shopping Process Over Six Months Source: 2007 J.D. Power and Associates New Autoshopper.com Study. Based to AIUs.

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 17 About half of AIU’s don’t begin their online shopping until one month before purchase 49% Online-Shopping One Month or less 16% Online-Shopping Over Six Months Source: 2007 J.D. Power and Associates New Autoshopper.com Study. Based to AIUs.

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 18 Over one-third of new-vehicle buyers seriously consider only one model Source: 2007 J.D. Power and Associates Escaped Shopper Study

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 19 Those with only one vehicle on their shopping list are less likely to use the internet to vehicle shop Source: 2007 J.D. Power and Associates Vehicle Shopping Study

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 20 Those shopping several models are more likely to find independent sites more useful Source: 2007 J.D. Power and Associates Vehicle Shopping Study. Based to AIUs.

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 21 Online Vehicle Shopping And Dealer Visits

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 22 Nearly one-fourth of new-vehicles shopped and not bought are rejected due to online information Source: 2007 J.D. Power and Associates Escaped Shopper Study Base: Vehicles rejected

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 23 Price, gas mileage, exterior styling, and reliability information is important in online shopping decisions Source: 2007 J.D. Power and Associates Escaped Shopper Study Base: Vehicle rejecters

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 24 Compete – PIN Data Match Online Behavioral Analysis of Vehicle Buyers

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 25 Vehicle Buyer Click Stream Methodology Compete Panel 4.4M Records Power Information Network Dealers in Markets of 70% Sales Vehicle Buyer Info 6/2005 – 7/2007 Surname & Address Match Third party ~73,700 Matches: with continuous click stream data 6 months prior to purchase (60% new-vehicle purchases, 40% used) Internet activity 12/2004 – 7/2007 PurchaseP - 1P -2P – 3…P - 6 Site A Site B Site C

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 26 Half of franchise-dealer buyers visit a third-party site before purchasing a vehicle Base: Buyers with internet access NOTE: Preliminary data

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved % of those who will visit a 3 rd -party site, will do so at least six months before purchase Base: New vehicle buyers with internet access visiting a 3 rd -party automotive site NOTE: Preliminary data 100% 78% 69% 59% 47% 33%

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved % of those who will visit an OEM site, will do so at least six months before purchase Base: New vehicle buyers with internet access visiting an OEM site NOTE: Preliminary data 100% 79% 67% 56% 42% 30%

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 29 Auto sites are high in both composition and reach Dealer Sites OEM Sites 3 Rd Party Sites Calendar/Address Books Web Site Composition and Reach Among Vehicle Buyers Base: All vehicle buyers with internet access NOTE: Preliminary data Search

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 30 Base: All vehicle buyers with internet access NOTE: Preliminary data Reach 27% 21% 55% 22% 21% 39% 31% 11% 54% 25% Auto shoppers can be found on non-auto sites

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. 31 Summary Manufacturer and independent sites have reached parity –Dealer sites will be next The internet is the only medium that works efficiently across the entire shopping funnel Significant online shopping activity occurs six months out Highest bump in online auto shopping occurs within the month of purchase Purchase and web-wide behavioral data are now being linked for the first time creating new marketing insights

© 2007 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved. Thank You