Half hit Web before showrooms

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It has been widely acknowledged that a number of auto shoppers start their searches online, but new evidence suggests more than half of all car hunts start on the Web.

A survey from J.D. Power & Associates found that 50% of all new-vehicle buyers in January and February based their decisions on make, model and price on information they found on the Net. The Autoshopper.com study released earlier this month shows a significant rise from 40% two years ago.

"Clearly the Internet can't be ignored by automakers who may be under-utilizing the Internet compared to other mediums," said David Galbraith, senior director-research at J.D. Power who led the study.

TNS Media Intelligence/CMR figures show that of six major carmakers, four hiked online ad spending through July 2004 vs. the same time frame the prior year. One spent a few million dollars less, and another's buys were flat. Still, the online spending doesn't come close to outlays in more traditional media.

CarsDirect.com's survey of its own visitors shows most are three months or less from visiting a dealership, said Chuck Hoover, VP-marketing. The third-party auto site gets 98% of its advertising from automakers. They are more often asking for integrated units, he said, not merely a vehicle ad, but one with content about features and benefits.


Indeed, the Internet auto shopper spends a lot of time on the Web combing for details. The J.D. Power study found they spend an average of nearly five hours online shopping for their new vehicles and visiting seven different sites.

And while new-vehicle buyers who use the Internet in their shopping process remained steady at 64% during the measured period, Power reported, the rate for buyers 60 years old and over showed a big jump since the 2003 study, to 47% from 39%. Import brands have a higher proportion of buyers who are online automotive users, 73% compared to just 56% for domestic brands.

Tom Peyton, senior manager-national advertising of Honda, said 90% of his buyers go online for vehicle information. The American Honda Motor Co. brand is increasing its online ads, but is driving beyond the mere banner ads of yore. From now through mid-December, Honda will be running Unicast video versions of national TV spots on at least 14 Web sites as part of the launch of its redone 2005 Odyssey minivan. Visitors can click off the video or watch it and ask for more information.

One reason for the Net's increasing popularity as a medium among advertisers is that they can measure returns on investment more readily on Internet advertising than other media. Consumers who opt in for more information online can be tracked to showrooms.

Ford Division found that 6% of sales from its F-150 pickup came from a 24-hour online animated ad "roadblock" on virtually every portal last fall. So the Ford Motor Co. brand repeated that roadblock earlier this month for its new F-Series Super Duty, which is backed by the brand's biggest online launch ever. It includes national and regional newspaper strip ads with Web addresses that run on the bottom of pages (AA, Sept. 6).

The carmakers' sites are making inroads with shoppers. J.D. Power's survey of 26,838 consumers who leased or bought a new vehicle in January and February found that 40% of them first visited an automaker's site, up from 36% last year. And 39% of them rated those sites as most useful in the process vs. 36% in 2003. Still, 58% of shoppers started their online vehicle shopping at third-party car sites vs. 62% a year ago.

Many carmakers have upgraded their sites from simple, electronic brochures to demonstrations of features and comparison tools within its family, said Mr. Galbraith.

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