1. The Automotive Buying Process
y g
From a Search
Perspective
Proprietary to Google and Compete, October 2007

2. Objectives and Methodology
Objective
Understand the key online activities that consumers
undertake prior to new vehicle purchases
Approach
1. 1,837 Automotive Buyers identified through Survey
2. The buyer’s online behavior was analyzed during the
six months prior t purchase
i th i to h
3. The following behaviors were studied and quantified
­ Search engine usage
­ Third party automotive website visitation
­ OEM website visitation
2
Proprietary to Google and Compete, October 2007

3. Key Findings
The Automotive Buying Process has compressed substantially
Search is a major contributor to consumer research
throughout the buying process
Search is among the most valuable
Media S
M di Sources f Buyers
for B
3
Proprietary to Google and Compete, October 2007

4. The Online Auto Channel
Online Automotive Activity During the 6 months prior t
O li A t ti A ti it D i th th i to
Purchase
4
Proprietary to Google and Compete, October 2007

5. Nearly Every Buyer Uses the Online Channel
• Over 80% of New Vehicle Buyers visited an OEM site within 6 months
of purchase
• Over 90% of buyers in general visited an OEM and/or Third party Site
Pre-Purchase Automotive Category Visitation
(Share of Buyers that visited the category of sites during the 6 months prior to purchase)
91% 90%
82% 82%
78%
74%
OEM Sites 3rd Party 3rd Party
Automotive and/or
Sites OEM sites
OEM sites
Share of New Car Buyers Share of Used Car Buyers
5
Proprietary to Google and Compete, October 2007

6. Search is a Critical Piece of the Online Channel
• 66% of OEM Site visitors who bought new vehicles were referred by
search during the 6 months prior to purchase
Pre-Purchase Share of Visitors Referred by Search
(Share of Buyers Visiting each category that were referred by search during the 6 month period)
66%
24% 25%
17%
OEM Sites 3rd Party
Automotive
Sites
New Car Buyers Referred by Search Used Car Buyers Referred by Search
6
Proprietary to Google and Compete, October 2007

7. New Vehicle Buyers Use More Branded Terms
• ¾ of search referrals amongst new vehicle buyers were from high
level brand terms
• Used buyers were more likely to use generic search terms
Type of Keyword Phrase used by Buyers Before Purchase
(Share of search referrals during the 6 month period)
78%
57%
43%
22%
Brand or Model Generic
Share of Searches for New Buyers
Share of Searches for New Buyers Share of Searches for Used Buyers
Share of Searches for Used Buyers
7
Proprietary to Google and Compete, October 2007

8. The Online Research Flow
Changes i B h i Th
Ch in Behavior Throughout the Buying P
h t th B i Process
8
Proprietary to Google and Compete, October 2007

9. The Automotive Research Process Has Compressed
• 65% of vehicle buyers in general indicated that they researched for
one month or less
Estimated Research Time Prior to Purchase – All Buyers
(Share of Buyers indicating how long they researched their purchased)
29%
19%
17% 17%
How long did you
10%
%
conduct research before
7% making your recent
<Make> purchase?
N= 1,837
More than Around Around Around Around Less than
3 months 3 months 2 months 1 month 2 weeks 1 week
9
Proprietary to Google and Compete, October 2007

10. The Automotive Research Process Has Compressed
• 59% of new vehicle buyers indicated they researched for one month
or less
Estimated Research Time Prior to Purchase – New Buyers
(Share of Buyers indicating how long they researched their purchased)
22%
21%
20%
16%
12%
9%
How long did you
conduct research before
making your recent
<Make> purchase?
N= 879
More than Around Around Around Around Less than
3 months 3 months 2 months 1 month 2 weeks 1 week
10
Proprietary to Google and Compete, October 2007

11. The Automotive Research Process Has Compressed
• 70% of used or pre-owned vehicle buyers indicated that they
researched for one month or less
Estimated Research Time Prior to Purchase – Used Buyers
(Share of Buyers indicating how long they researched their purchased)
36%
18%
15% 16%
How long did you
conduct research before
9% making your recent
<Make> purchase?
6%
N= 958
More than Around Around Around Around Less than
3 months 3 months 2 months 1 month 2 weeks 1 week
11
Proprietary to Google and Compete, October 2007

12. As time to purchase shortens, more New Vehicle Buyers
visit Third Party and OEM sites
• Visitation to OEM and Third party sites increased more than 40ppts
from six months to one month prior among new vehicle buyers
Category Visitation By Pre-Purchase Period - New Vehicle Buyers
(Share of new vehicle buyers visiting the category by time period)
70%
60%
50%
40%
30%
20%
10%
0%
6 Months 5 Months 4 Months 3 Months 2 Months Within the
Prior Prior Prior Prior Prior Month
of Purchase
of Purchase
OEM Sites 3rd Party
Automotive
Sites
12
Proprietary to Google and Compete, October 2007

13. More Used Vehicle Buyers tend to visit Third Party sites
than OEM sites
• Visitation to Third party sites increased more than 50ppts from six
months to one month prior among used and pre-owned vehicle
buyers
Category Visitation By Pre-Purchase Period - Used Vehicle Buyers
(Share of used vehicle buyers visiting the category by time period)
70%
60%
50%
40%
30%
20%
10%
0%
6 Months 5 Months 4 Months 3 Months 2 Months Within the
Prior Prior Prior Prior Prior Month
of Purchase
of Purchase
OEM Sites 3rd Party
Automotive
Sites
13
Proprietary to Google and Compete, October 2007

14. New Buyers view more information on OEM Sites as they
come closer to Purchase
• Content usage on both OEM sites and Third Party sites increase
substantially in the month prior to purchase
Page Views by Pre-Purchase Period- New Vehicle Buyer
(Page Views for each category by time period)
300
250
200
200
150
100
50
50
‐
6 Months 5 Months 4 Months 3 Months 2 Months Within the
Prior Prior Prior Prior Prior Month
of Purchase
of Purchase
OEM Sites 3rd Party
Automotive
Sites 14
Proprietary to Google and Compete, October 2007

15. Used Vehicle Buyers utilize Third Party Automotive sites
more than OEM sites
• Page Views on 3rd party sites increase substantially as time to
purchase shortens
Page Views by Pre-Purchase Period- Used and Pre-Owned Vehicle Buyer
(Page Views for each category by time period)
300
250
200
200
150
100
50
50
‐
6 Months 5 Months 4 Months 3 Months 2 Months Within the
Prior Prior Prior Prior Prior Month
of Purchase
of Purchase
OEM Sites 3rd Party
Automotive
Sites 15
Proprietary to Google and Compete, October 2007

16. New Vehicle Buyers spend more time on OEM and 3rd
Party sites as they come closer to Purchase
• New Vehicle Buyers spend more time on the 3rd party sites when they
are one month prior to purchase
Time On Category - New Vehicle Buyer
(Number of minutes spent on category sites by period)
80
70
60
50
40
30
20
10
‐
6 Months 5 Months 4 Months 3 Months 2 Months Within the
Prior Prior Prior Prior Prior Month
of Purchase
of Purchase
OEM Sites 3rd Party
Automotive
Sites 16
Proprietary to Google and Compete, October 2007

17. Used Vehicle Buyers spend more time on Third Party
Automotive sites Compared to OEM sites
• Used Buyers spend significantly more time on 3rd party sites within
the month of purchase
Time On Category - Used Vehicle Buyer
(Number of minutes spent on category sites by period)
80
70
60
50
40
30
20
10
‐
6 Months 5 Months 4 Months 3 Months 2 Months Within the
Prior Prior Prior Prior Prior Month
of Purchase
of Purchase
OEM Sites 3rd Party
Automotive
Sites 17
Proprietary to Google and Compete, October 2007

18. Upper and Lower Funnel: Vehicle Buyers Use Search
Share of New Buyers Referred
by Search To OEM Sites
awareness
6 Months 22%
interest 3 Months 15%
consideration 2 Months 19%
test-drive 1 Month 42%
purchase 1 Week 41%
Search is a critical activity at every stage of the buying process
18
Proprietary to Google and Compete, October 2007

19. The Automotive Research Tools
Understanding H
U d t di How Automotive Buyers Research
A t ti B R h
19
Proprietary to Google and Compete, October 2007

20. Search Engines are the Third Most Used and Third Most
Important Media Source
Media Sources Used Prior To Purchase Media Source Importance – Top 2 Box
(Share of Buyers indicating they used media source) (Share of buyers indicating source was important )
OEM Site 39% OEM Site 79%
3rd Party Site 37% 3rd Party Site 84%
Search Engine 32% Search Engine 75%
News/Mag. Article 14% News/Mag. Article 65%
Flyer/Brochure 12% Flyer/Brochure 59%
TV Ad 11% TV Ad 49%
News/Mag. Ad 10% News/Mag. Ad 51%
Radio Ad 3% Radio Ad 48%
TV Review 3% TV Review 65%
Billboard 2% Billboard 36%
Online Banner 1% Online Banner 48%
Online Video 1% Online Video 46%
N= 1,837
,83
1) Which of the following media sources did you use to find automotive related information to help you make your recent <Make> purchase? (Multi-Select)
2) Among the media sources you indicated, please indicate the relative importance of each? (Single Select Scale – 1 to 5 rating)
20
Proprietary to Google and Compete, October 2007

21. The Value of Search Engines Ranks Among That of OEM
Sites and Third Party Sites
4.3 3rd Party Site
More Important
OEM Site
4.1
41
Search Engine
TV Review
3.9 News/Mag.
Article
Radio Ad
R di Ad Flyer/Brochure
Relative 3.7
Importance
of Media News/Mag. Ad
Source 3.5 Online Video TV Ad
3.3 Online Banner
3.1
2.9
Billboard
Less Important
2.7
Low Usage High Usage
0.00
0 00 0.05
0 05 0.10
0 10 0.15
0 15 0.20
0 20 0.25
0 25 0.30
0 30 0.35
0 35 0.40
0 40
Share of Buyers Utilizing Media Source
21
Proprietary to Google and Compete, October 2007

22. Test Drives and Past Experience are highly utilized resources
and the most important
Resource Used Prior To Purchase Resource Importance
(Share of Buyers indicating they used resource) (Share of buyers indicating resource was important )
Dealer Dealer
56% 73%
Visit Visit
Test Test
53% 91%
Drive Drive
Past Past
50% 91%
Experience Experience
Consumer Consumer
39% 86%
Reviews Reviews
Friends, Family, Friends, Family,
33% 76%
Colleagues Colleagues
N= 1,837
1) Which of the following resources did you utilize to find automotive related information to help you make your recent <Make> purchase?
2) Among the resources you indicated, please indicate the relative importance of each?
22
Proprietary to Google and Compete, October 2007

23. Test Drives and Past Experience are the most valuable
resources for Buyers
4.60
More Important
Past Test
Experience Drive
4.50
4.40
Relative
Importance Consumer
of Resource Reviews
4.30
4.20
4.10
4 10 Friends, Family,
Friends Family Dealer
D l
Colleagues Visit
Less Important
4.00
Low Usage High Usage
0.30
0 30 0.35
0 35 0.40
0 40 0.45
0 45 0.50
0 50 0.55
0 55 0.60
0 60
Share of Buyers Utilizing Resource
23
Proprietary to Google and Compete, October 2007

24. Key Findings
24
Proprietary to Google and Compete, October 2007

25. Key Findings
The Automotive Buying Process has compressed substantially
• Nearly 60% of new Buyers researched their purchase for one month or less
before buying
• Over 70% of Used and Pre-Owned buyers researched their purchase for
one month or less
Search is a major contributor to the research process
throughout the buying process
• Nearly ¾ of new Vehicle Buyers used search at some point in the process
and were referred to an OEM Site or 3rd Party Automotive Site
d
• In the last month prior to purchase, 42% of New Vehicle Buyers used
search
Search is among the most valuable Media Sources for Buyers
• Search was valued at near parity with OEM Sites and 3rd Party Automotive
Sites
25
Proprietary to Google and Compete, October 2007

26. Q&A
Seth Barron
Industry Operations, Automotive
automotive_research@google.com
Jeremy Crane,
Director of Search and Online Media
autopractice@compete.com
26
Proprietary to Google and Compete, October 2007