understanding 2010 automotive shoppers

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Google Confidential and Proprietary 1 Understanding the 2009 Auto Shopper Jeremy Crane, Compete, Inc. Dr. Angela Reynar, Google, Inc. April 23, 2009

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Page 1: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 1

Understanding the 2009 Auto Shopper

Jeremy Crane, Compete, Inc.

Dr. Angela Reynar, Google, Inc.

April 23, 2009

Page 2: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 2

Table of Contents

• The Studies

– Automotive Buyer Flow

– Automotive Video

– Parts & Service

• Key Findings

Search plays a critical part in the automotive research and buying process now more than ever

Automotive video is growing as an automotive research tool among new vehicle purchasers

Search continues to deliver both referral quantity and quality to parts, accessories, services and tires websites

Page 3: Understanding 2010 automotive shoppers

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Automotive Buying Flow Study• The role of the internet in the new vehicle buyer’s

purchasing process

Page 4: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 4

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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2007 2008

Total Luxury Volume

Automotive Retail Registrations(R.L. Polk & Co. retail registration data; number of New Vehicle Registrations (millions), Jan 2007 through

Dec 2008 )

The overall automotive market has been challenged

• Industry sales fell considerably in the last half of 2008

• Sales have continued to struggle in 2009

Page 5: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 5

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1.5

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2.5

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3.5

4.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2007 2008 2009

Market-wide Shopper Counts(Clickstream data; unique number of shoppers (millions) by month, Jan 2007 through March 2009)

Lowest Compete shopper count on

record

Lowest Compete shopper count on

record

Compete defines a shopper as someone who exhibits lower-funnel shopping behavior such as build your own vehicle or dealer locate on the top 25+ third-party automotive websites.

Source: Monthly Consumer Confidence Index, The Conference Board via TNS

Market demand has consistently been declining the past 3 years

• However, we are starting to see in-market demand rebound following its lowest point in

Nov 2008

• Similarly, Consumer Confidence* has started to rebound from a Nov low

Page 6: Understanding 2010 automotive shoppers

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New Vehicle Retail

Car RegistrationsInternet Browsers

3rd Party

Household Match

Source: R.L. Polk & Co.Source: Compete

Google, R.L. Polk & Co. and Compete created a new dataset to study new vehicle retail registrations

Page 7: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 7

60% 60% 60%

10% 10%14%

14%

OEM Sites 3rd Party

Automotive

Sites

3rd Party

and/or

OEM Sites

Shared OEM Only 3rd Party Only

Nearly every buyer used an OEM and/or 3rd Party Site

during the purchasing process

• 84% of new vehicle buyers visited an OEM and/or 3rd Party site within 6 months of purchase

• 1 in 4 new vehicle buyers visited only either an OEM site or 3rd Party site

Pre-Purchase Automotive Category Visitation(Clickstream data; share of New Vehicle Buyers visiting the site category during the 6 months prior to purchase)

70%74%

84%

Page 8: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 8

60% 60% 60%

11% 11%13%

13%

OEM Sites 3rd Party

Automotive

Sites

3rd Party

and/or

OEM Sites

3rd Party

Only

OEM

Only

Shared

61% 61% 61%

7% 7%16%

16%

OEM Sites 3rd Party

Automotive

Sites

3rd Party

and/or

OEM Sites

3rd party sites saw new vehicle buyer growth year-over-year

• While OEM site visitation among new vehicle buyers declined

• Unique visitation among new vehicle buyers had similar trends

Pre-Purchase Automotive Category Visitation(Clickstream data; share of New Vehicle Buyers visiting the site category during the 6 months prior to purchase)

2007 2008

73%

84%

71%68%

77%

84%

Page 9: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 9

Pre-Purchase OEM KPI Usage(Clickstream data; share of New Vehicle Buyers during the 6 months prior to purchase)

49% of new vehicle buyers used a KPI on any OEM site at least once during the 6 months prior vehicle purchase

• BYO was the most used KPI tool

* Only used 6/2007 through 12/2008 purchasers, n = 44,865

48%

36%33%

23%21% 21%

18%

7% 7%

BYO Offers Locate Dealer Search

Inventory

RAQ Compare Estimator Brochure Trade In

Page 10: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 10

OEM KPI usage aligns with retail vehicle sales

• New vehicle buyers were most likely to KPI on Toyota

Top-5 OEM KPIusage sites among

new vehicle buyers*

Top-5 OEMretail sales2007 - 2008

Toyota 16.8% Toyota 3.8 million

Ford 16.5% Chevrolet 2.8 million

Chevrolet 15.1% Honda 2.6 million

Honda 13.6% Ford 2.5 million

Nissan 11.6% Nissan 1.6 million

Source: Clickstream Source: R.L. Polk & Co. retail registrations

* Only used 6/2007 through 12/2008 purchasers, n = 44,865

Page 11: Understanding 2010 automotive shoppers

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Where can I find today’s automotive shoppers?

• Websites are the #1 consumer information source; dealerships are #2; search is #3

Source: Google Touchpoints Consumer Survey, January 2009

Q: Which of the following sources did you use to learn about or research cars as you made your decision to buy one in the past 6 months? (select all) Base: All category respondents, n=597

Sources used to learn about or research cars(Google Touchpoints consumer survey data; share of category respondents)

48%

44%

30%

Website

Dealership

Search Result

Page 12: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 12

44% 43% 43%45%

51% 52%

56% 57% 57% 55% 49% 48%

6 Months

prior

5 Months

prior

4 Months

prior

3 Months

prior

2 Months

prior

Within the

Month

of Purchase

Branded Non-Branded

Type of Keyword Phrase Used by Buyers Before Purchase(Clickstream data; share of New Vehicle Buyer search referrals to automotive sites by time periods, discrete months)

New Vehicle Buyers are just as likely to use non-branded terms compared to branded terms

• However, New Vehicle Buyers have a higher propensity to use branded search terms

during their vehicle purchase month

Rank Term

1 kelly blue book*

2 toyota

3 nissan

4 mazda

5 carmax*

6 ford

7 hyundai

8 chevrolet

9 blue book*

10 kia

Top 10 Auto Search Terms in purchase month

* Non-branded terms

Read as: 52% of New Vehicle Buyer search referrals to automotive sites used branded

search terms within the month of purchase

Page 13: Understanding 2010 automotive shoppers

Google Confidential and Proprietary

• Websites and Search are widely used throughout the purchase funnel

13

Sources used – at what point?

Source: Google Touchpoints Consumer Survey, January 2009

Q: At what point in your shopping did you use each source to learn about or research cars?

Base: All category respondents, n=597

Websites, Dealerships, WOM, Search Results, Sales People

Throughout the process

Page 14: Understanding 2010 automotive shoppers

Google Confidential and Proprietary

46%43%

OEM Sites 3rd Party

Automotive

Sites 14

Pre-Purchase Share of Buyers Referred by Search(Clickstream data; share of New Vehicle Buyers visiting the site category that were referred by search during

the 6 months prior to purchase)

Search played a critical role in the automotive purchase process

• Nearly half of new vehicle buyers visiting OEM automotive sites were referred by search

Read as: 43% of New Vehicle Buyers that

visited a 3rd Party Automotive website were referred by search at least once

during the 6 months prior to their purchase

dates.

Page 15: Understanding 2010 automotive shoppers

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Upper and Lower Funnel: Vehicle Buyers Use Search

3rd PartySites Visitors

OEM SitesVisitors

awareness

interest

consideration

test-drive

purchase

6 Months

Share of New Buyers Referred by Search

3 Months

2 Months

1 Month

1 Week

Search is a critical activity at every stage of the buying process

Source: Clickstream data, by time periods, discrete months

Read as: 43% of New Vehicle Buyers that visited an OEM website were referred by search at

least once within the month in which they purchased their vehicle.

25%

31%

34%

43%

39%

18%

22%

28%

40%

36%

Page 16: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 16

Search is viewed as useful throughout the purchase funnel

discover cars they were unfamiliar with69% find independent reviews of

cars they were considering83%

find a local dealership where they could buy the car77% find the car brand’s website78%

find the best offers74% find comparisons of similar cars89%

% of consumers who used search engines to …

Q: Please indicate how helpful the search engine was in the following ways during your shopping experience.Base: Used a search engine as source, n=192

Source: Google Touchpoints Consumer Survey, January 2009

Page 17: Understanding 2010 automotive shoppers

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Automotive Online Video Study• The role of online video in the automotive buying

process

Page 18: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 18

New vehicle buyers use online video in their research

Source: Google Touchpoints Consumer Survey, January 2009

83% of new vehicle buyers visit video focused websites prior to purchase Source: Clickstream data

31%

24%

11%

7%

7%

6%

4%

3%

3%

3%

Brand, product or company sites

Auto-specific websites

YouTube

Yahoo! Video

News Sites

MSN Video

MySpace

Facebook

AOL Video

Other

Types of Websites where Car Videos were Viewed(Google Touchpoints consumer survey data; share of category respondents)

Q: On which of the following websites have you viewed videos about cars? Please think of any information you have sought regarding automotive, products, brands, product reviews, how-to videos, etc. (select all) Base: All category respondents, n=597

Page 19: Understanding 2010 automotive shoppers

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Unique Visitors to YouTube(Clickstream data; unique number of people (millions) visiting youtube.com, Jan 2007 through Feb 2009)

YouTube attracts 40% of people online in the U.S.

• In February, approximately 70M people visited youtube.com

1. Feb 2007/8 year-over-year growth: 22%2. Feb 2008/9 year-over-year growth: 5%

0

10

20

30

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50

60

70

80

YouTube traffic increased 132% over the period

Page 20: Understanding 2010 automotive shoppers

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YouTube Visitation, In-Market Auto Shoppers vs. General Internet Users(Clickstream data; share of in-market auto shoppers and internet browsing population visiting youtube.com, Jan 2007 through Feb 2009)

50% of Feb in-market automotive shoppers visited YouTube

• Compared to 38% of general internet browsing population

0%

10%

20%

30%

40%

50%

60%

In-Market Auto Shoppers General Internet Browser Population

Read As: 50% of in-market automotive shoppers visited YouTube in Feb 2009, compared to 38% of general internet users.

20

Page 21: Understanding 2010 automotive shoppers

Google Confidential and Proprietary

62%

70%

2007 2008

21

YouTube attracted a larger percentage of 2008 new vehicle purchasers than 2007 purchasers

Pre-Purchase YouTube Visitation(Clickstream data; share of New Vehicle Buyers visiting youtube.com during the 6 months prior to purchase)

Read as: 62% of

New Vehicle Buyers visited YouTube at

least once during the 6 months prior to

their purchase dates.

• This represented a percentage growth rate 13% year-over-year

Page 22: Understanding 2010 automotive shoppers

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2008 new vehicle purchasers spent more time on YouTube than 2007 purchasers

Average Stay on YouTube among Buyers(Clickstream data; average number of minutes per user per month among New Vehicle Buyers visiting youtube.com by purchase year)

11

21

2007 2008

+90%

• 2008 purchasers spent almost twice the amount of time on YouTube

Page 23: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 23

27%

26%

24%

11%

10%

1%

To see the car

To get an overall review

To learn more about vehicle

specifications (MPG, safety

features, etc.)

To get the feel of how the vehicle

drives

For entertainment

Other

People sought out online videos to see the car, get reviews and learn more about vehicle specifications

Source: Compete/Google Buy Flow Survey, April 2009 Preliminary Results

Reasons for Watching Online Videos(Compete/Google Buy Flow survey data (preliminary results); share of answer responses)

Q V11: What are some of the reasons you watched online video(s) about

the vehicle(s) you recently researched? Select all that apply. n = 350

Page 24: Understanding 2010 automotive shoppers

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Automotive Parts Study• How people shopping for parts, tires, service, and

accessories use the internet

Page 25: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 25

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People Visiting Parts, Accessories, Services and Tires Sites(Clickstream data; unique number of people (millions) visiting parts, accessories, services and tires sites (in aggregate)

Jan 2007 through Feb 2009)

Parts, accessories, services and tires sites continued to gain consumer interest online in 2008 and into 2009

• In aggregate, parts, accessories, services and tires sites attracted 14.8M visitors in

Feb 2009

Traffic to parts, accessories, services and tires sites increased 34% over the period

Page 26: Understanding 2010 automotive shoppers

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People Visiting Parts, Accessories, Services and Tires Sites(Clickstream data; unique number of people (millions) visiting the categories of sites, Feb 2008 through Feb 2009)

Traffic to core maintenance site categories continued to grow

• Accessories traffic declined slightly year-over-year as people had less discretionary

income to trick out their cars

• Parts sites captured the most traffic throughout the period

0

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8

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Parts Accessories Services Tires

F M A M J J A S O N D J F F M A M J J A S O N D J F F M A M J J A S O N D J F F M A M J J A S O N D J F

+3%

-2%

+12% +28%

Page 27: Understanding 2010 automotive shoppers

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Search Referrals to Parts, Accessories, Services and Tires Sites(Clickstream data; referring sessions (millions) to the categories of sites, Feb 2008 through Feb 2009)

Search referral growth has outpaced growth in site traffic

• Search has consistently increased as a referral source

• All categories saw a minimum of 50% growth in search referrals year-over-year

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Parts Accessories Services TiresF M A M J J A S O N D J F F M A M J J A S O N D J F F M A M J J A S O N D J F F M A M J J A S O N D J F

+62%

+52%

+77%

+74%

Page 28: Understanding 2010 automotive shoppers

Google Confidential and Proprietary

Search Exclusivity to Parts, Accessories, Services and Tires Sites(Clickstream data; share of UV-based referrals to the categories of sites, Feb 2008 through Feb 2009)

1 in 4 people referred to parts, accessories, services and tires websites can only be reached by search

• Search exclusivity has increased among the parts, accessories, services and tires

sites throughout the past year

• Search exclusivity grew 14% on average year-over-year

0%

5%

10%

15%

20%

25%

30%

35%

Parts Accessories Services Tires

F M A M J J A S O N D J F F M A M J J A S O N D J F F M A M J J A S O N D J F F M A M J J A S O N D J F

28

Page 29: Understanding 2010 automotive shoppers

Google Confidential and Proprietary

20%

5%

1%2%

1% 0%

3%

0%1%

1% 0%

Google Yahoo!

Search

MSN/Live Yahoo! MSN Portal AOL Gmail Yahoo! Mail Hotmail AOL Mail

Search Portal Google

Content

Network

Webmail

29

Referrals to Parts, Accessories, Services and Tires Sites(Clickstream data; referrals to the categories of sites (in aggregate), Q4 2008)

Google provided the largest proportion of referrals to parts, accessories, services and tires sites in Q4 2008

• Google referred more than 4X its closest competitor, Yahoo! Search

• 3% of all referrals came from the Google Content Network

Page 30: Understanding 2010 automotive shoppers

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Google referred the largest proportion of referrals resulting in a KPI activity in Q4 2008

• 18% of referrals resulting in KPI activity came from Google

• The Google Content Network referred 2.9% of all referrals resulting in a KPI

KPI Referrals to Parts, Accessories, Services and Tires Sites(Clickstream data; referring sessions to the categories of sites with KPI activity (in aggregate) Q4 2008)

18.2%

4.6%

1.0%

2.1%

0.5% 0.3%

2.9%

0.1%

1.0%0.4% 0.1%

Google Yahoo!

Search

MSN/Live Yahoo! MSN Portal AOL Gmail Yahoo! Mail Hotmail AOL Mail

Search Portal Content

Network

Webmail

Page 31: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 31

Branded Search Referrals(Clickstream data; share of search referrals to parts, accessories, services and tires sites (in aggregate), Q4 2008)

Search referrals with KPI activity are more apt to use branded terms• On average, 45% of search referrals to parts, accessories, services and tires sites are

from branded terms

• Branded and non-branded terms both play a role in driving traffic to parts, accessories,

services and tires sites

45%51%

55%49%

Overall KPI

Q4 2008

Branded Non-Branded

Page 32: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 32

Paid Search Referrals (left) & Paid Search Exclusivity (right)(Clickstream data; share of search referrals to parts, accessories, services and tires sites (in aggregate), Q4 2008)

Search referrals resulting in Add to Cart activities are more likely to come from paid search

• Without paid search parts, accessories, services and tires sites would have seen 30%

fewer people with Add to Cart activity in Q4 2008

UV-based ReferralsSession based Referrals

16%

30%

65%

61%

19%9%

Overall Add to Cart

Q4 2008

Paid Organic Both

26%33%

74%67%

Overall Add to Cart

Q4 2008

Paid Organic

Page 33: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 33

Automotive Buying: Search plays a critical part in the automotive research and buying process now more than ever

Video Viewing:Automotive video is growing as an automotive research tool among new vehicle purchasers

After Market Research:Search continues to deliver both referral quantity and quality to parts, accessories, services and tires websites

Key Findings

Page 34: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 34

Studies to ask your Google Team Member about

Study Name Objective Components Expected Timing

Automotive Buyer Flow Analyze the purchase funnel by connecting automotive vehicle purchasers to internet behavior

• Compete/R.L. Polk & Co. Data Match

• Clickstream• Survey data

Partially available today

Value of Automotive Video

Assess the influence of video and when consumers use it during their automotive vehicle purchase process

• Compete/R.L. Polk & Co. Data Match

• Clickstream• Survey data

Partially available today

Parts & Service Study Quantify the impact of online research activities that occur as consumers progress through the parts, accessories, services and tires purchase processes

• Clickstream• Survey data

Partially available today

Page 35: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 35

Studies to ask your Google Team Member about

Study Name Objective Components Expected Timing

Non-KPI study Quantify the role of search in driving on-site automotive behaviors. Discover the difference in KPI and Non-KPI consumer profiles

• Clickstream• Survey data

Available today

Certified Pre-Owned/Used Vehicles

Quantify the online activities within the CPO and used marketplace

• Clickstream Late Q2/Early Q3

Hispanic Gain insights into the Hispanic automotive shopping & buying process compared to overall US consumers

• Clickstream• Survey data• Appended

Ethnicity data

Early Q3

Auto SERP Page, value of Tier I, 2 & 3 on one page

Learn how to optimize the SERP page across Tier 1, 2, and 3 advertizing efforts based on consumer feedback

• Survey data Late Q3

Page 36: Understanding 2010 automotive shoppers

Google Confidential and Proprietary 36

Thank You!

Month, 2009

Q&A