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Objectives

2008 Dealer Walk-In Traffic Study Results

Northwood University and AutoTrader.com Present:

Study ResultsJanuary 25, 2009

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Chip Perry – President and CEO, AutoTrader.comPresident and CEO, AutoTrader.com

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• Since the advent of the Internet, manufacturers and dealers continue to seek the most effective and efficient

State of the Industry - Current Observations

dealers continue to seek the most effective and efficient media strategy.

• Traditional media continues to garner a large share of advertising spend.

• Automotive advertisers often treat the Internet as a lead-generator and define its impact based on e-mails and phone calls alone.

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6 % 68% 71%75%80%

67% 68% 71% 75%

State of the Industry - Current ObservationsYet, e-mail leads have stagnated over the last several years.

64% 67% 68%

40%

60%64% 67% 68%

20% 21% 21% 22% 22%

0%

20%

2004 2005 2006 2007 2008

20% 21% 21% 22% 22%

2004 2005 2006 2007 2008Online New Car Shopper as % of Total BuyersEmail Lead Requestors as % of Total Buyers

Source: JD Power 2004-2008 New AutoShopper.com Study

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• To better understand the “missing link,” what was

Why conduct the “Dealer Walk-In Traffic” Study?

previously immeasurable:

The impact of advertising on the volume of walk-in traffic at dealerships nationallyof walk-in traffic at dealerships nationally.

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Objectives

Keith Pretty – President, Northwood UniversityPresident, Northwood University

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Specific ObjectivesD t i h lk i t ffi i iti ll t bli h t t

Study Objectives

• Determine how walk-in traffic initially establishes contact with dealerships (i.e., phone, e-mail or walk-in).

• Measure the impact that all forms of advertising have on dealer walk-in traffic.

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Methodology• Intercept interviews conducted among customers as they

exited the dealership

How did we conduct this study?

exited the dealership.• Interviews administered by research firm Morpace, Inc.

and Northwood University students. • Interviews were conducted over a two-day period at each

dealership.Sample

• Must have been visiting the dealer to shop for a vehicle (Those visiting for service or to make a car payment were not included in this study).

• Data has been weighted to reflect the actual market *• Data has been weighted to reflect the actual market.

* Geography weights determined by population; Customer type weights determined by share of units sold

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• 59 dealerships (mix of manufacturers, independent and franchise, luxury and non-luxury)

• 17 markets

Where did we conduct this study?

Boston, MASyracuse, NY

Detroit MILa Crosse, WI

Eugene, OR

Chicago, IL

Phoenix, AZ

Richmond, VAKansas City, KS

Philadelphia, PA

Louisville, KY

Detroit, MI

Sacramento, CA Denver, CO

Reno, NV

Macon, GA

Austin, TX

Tampa, FL

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The Focal Point Question of the Survey

What was the primary source that led you to visit this dealership today?

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How do walk-ins establish contact with the dealer?

• 80% of car shoppers who walk through a dealership’s doors do not establish contact with the dealer prior to their initial visit.

Walk-In Email

Phone17%

Reality

Walk In

Dealers’ Perception

80% 2%Walk-In

41% Phone42%

Email17%

Source: 2008 Dealer Brand Image Study & Dealer Walk-In Study

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What are the primary sources that drive dealer walk-in traffic?

Primary Source Leading to Dealership

27%

31%

Advertising

Driving by

Advertising drives over one-fourth of

22%

27%

Prior Experience

Advertising over one-fourth of dealer walk-in traffic

20%Friends or family

Source: 2008 Dealer Walk-In Study

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What advertising drives dealer walk-in traffic? • The Internet is the number one media source driving dealer walk-in traffic.• More than half of all walk-in traffic generated by advertising can be

attributed to the Internet.

11%

27%

32%

Classified Maga ines

Newspapers

Internet

15%

13%

54%

RealityDealers’ Perception

7%

8%

9%

11%

Direct Mail

Television

Radio

Classified Magazines

3%

8%

4%

15%

0%

6%

Phone Book

Outdoor Advertising

Source: 2008 Dealer Brand Image Study & Dealer Walk-In Study

3%

0%

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What advertising drives dealer walk-in traffic? • Of the 54% brought to the dealership by the Internet, 61% do not

contact the dealership first.

15%

13%

54%

Classified Magazines

Newspapers

Internet

Walk-In61% Phone

25%

0%

3%

8%

4%

Outdoor Advertising

Direct Mail

Television

Radio

Email14%

25%

Source: 2008 Dealer Walk-In Study

3%

0%

Phone Book

Outdoor Advertising

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• The Internet is the number one media source at driving walk-in traffic. However, dealers are still spending heavily on more traditional media such as Newspaper, Radio and TV.

It’s important to invest in efficient and effective media.

27%

17%

13%

54%

Newspaper

Internet

17%

17%

3%

4%

8%

Radio

TVPrimary Media Source Leading to Dealership

Dealer Advertising Spend

Source: 2008 Dealer Walk-In Study & NADA Data 2008 Report.

10%

3%Direct Marketing

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Objectives

Thank You!