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August 7th, 2006 at 7:15 am

Understanding the Behavior of Online Car Buyers

Are automotive advertisers taking the best route to get to customers? The idea is counter-intuitive, opposed to decades of good advertising practice and if anyone but J.D. Power & Associates suggested it they would probably be laughed off the road. But…

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According to the just-released "2006 Online Media Study" from J.D. Power, targeting new-vehicle buyers at travel, special interest and finance Web sites is more effective for upper-funnel brand marketing than placing advertising on most automotive shopping sites.

The screeching sound you hear is media buyers stomping on the brakes and yelling, "WHHHHHAAAT!"

The study was based on a random national US sample of nearly 11,000 new-vehicle buyers with Internet access who purchased a vehicle in September or October of 2005. It was fielded to provide an in-depth look at the Internet usage and behavior of new-vehicle buyers and to identify the sites that most effectively target desirable audiences in terms of reach, scope and cost.

The results of the study are literally a U-turn in traditional advertising thinking and tactics, and no doubt many analysts will be of the opinion that they speed past the limits of rationality.

While most Internet users are reached by the most popular sites such as Google and Yahoo!, J.D. Power found that new-vehicle buyers could be found following their interests and lifestyles at sites such as WebMD and Home Depot five times more often than general Internet users. As the release stated: "Given their affluence, these buyers use financial sites such as Yahoo! Finance and MSN Money six times more often than general Internet users. They are also four to five times more likely to use travel sites such as Expedia.com or Travelocity than general Internet users."

"This study shows auto manufacturers and dealers where to begin impressing consumers who are contemplating a new vehicle purchase, before they’ve even typed in a keyword in a search engine," said Lisa E. Phillips, senior analyst at eMarketer. "Competition is heavy for premium ad inventory on the third-party sites like Edmunds.com and Kelley Blue Book, where consumers who are already in the market are going to research the makes and models they’ve seen elsewhere. Even behavioral targeting, which auto makers are trying this year, only reaches people who have visited an auto site."

"In terms of Internet advertising, once consumers visit an automotive shopping site, they’ve already narrowed their vehicle consideration set, which means that online advertisers are missing an ideal branding opportunity," said Steve Witten of J.D. Power. "By focusing on new-vehicle buyer behavior on the Internet before they begin actively shopping for their next new vehicle, automotive marketers can identify the Web sites with the highest probability of reaching prospective buyers more effectively than ever before."

Looking deeper into the study some very interesting nuggets of information appear. For instance, visits to particular websites vary according to the type of vehicle consumers are likely to purchase:

  • Large pickup buyers have above-average visitation rates to NASCAR.com and many home improvement sites
  • Midsize pickup buyers are much more likely than others to visit sports-related sites
  • Female prospects for minivans and large SUVs frequent Disney Online and game sites
  • Sports cars enthusiasts not only visit auto enthusiast sites, but also travel-related sites
  • Luxury buyers are more than twice as likely as non-luxury buyers to visit Apple’s iTunes music store (due in part to high ownership levels of MP3 players)
"This is a significant opportunity for marketers, especially when they can analyze down to the vehicle segments from which these buyers cross-shop," said Mr. Witten. "Marketing is often the most inefficient part of any business in terms of spending. By understanding where certain consumers spend their time online rather than relying solely on general Internet visitation numbers, marketers are able to reach key audiences, often at fees that provide more bang for the buck."

Maybe it is time for auto sellers, and other marketers, to shift their thinking — and media buying.

More here.

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