Automotive

INDUSTRY FACTSHEET
Industry Overview
The automotive industry includes mechanical repair, collision repair, car washes, and lube or oil changes. This industrys demand is dependent upon car usage and the number of cars on the road. Profitability of individual companies can be shaped by the convenience of their location and the strength of their marketing. Typically, large companies can maximize use of more expensive equipment and can easily leverage advantages in marketing. On the other hand, smaller companies can compete by providing superior customer service or by offering specialized services. Industry competition includes venues that also provide automotive services, including gas stations, car dealerships or some branches of chain stores, like Wal-Mart. Promotional channels in this industry typically include phone directories, signage, local newspaper ads, direct mail, TV and radio.

Business Challenges
The complexity of the various types of purchases in the automotive industry from the point of sale to ongoing annual maintenance also shapes the complex challenges of the industry. Competition From Car Dealers: The sales department is often much less profitable than the parts and service centers of car dealerships. And to compensate for inconvenient locations, many dealers will offer evening and weekend hours. Additionally, if dealerships offer initial warranty services to a consumers satisfaction, there is an increased chance that more customers will return for maintenance and repair services even after warranties expire. Public Mistrust: Because of the complexity of cars, consumers are unable to easily judge whether they have been treated fairly by a repair shop. Polls indicate that a high percentage of consumers believe that repair shops overcharge, perform unnecessary repairs, or use inferior parts. Growing Car Complexity: As cars become more technologically complex, maintenance and repair services have followed suit and have become more difficult and expensive. There is a stronger need for shops to invest in special diagnostic equipment and tools to perform repairs to advanced systems. Service technicians also require additional training to work on the latest car models.

Industry Opportunities
The opportunities in this industry directly reflect the growing trends and desires of consumers, as well as the variety of technological advancements in everyday vehicles. Alliances with Car Dealers: Often, owners of expensive cars are more likely to prefer using the service department at their car dealer. By allying with a car dealership, local repair shops can be referred new business from a dealership in exchange for purchasing auto parts from the dealer. Collision repair in particular is a key opportunity for shops because an increasing number of dealerships are opting out of offering body shop services.
Copyright 2011 by Research and Management. All rights reserved.

Automotive

INDUSTRY FACTSHEET
Servicing Non-Traditional Vehicles: Growing sales of fuel-efficient vehicles like hybrids, electric cars, and cars that operate on alternative fuels have increased the demand for specialized repair services. Additionally, some consumers may require restoration, custom paint jobs, retro engine parts or special attention. Auto repair shops can leverage such needs and create a niche by developing expertise in non-traditional or specialized vehicles. Non-traditional vehicle owners tend to be passionate about their cars and are much more likely to spend more money to maintain them. Service for Car Electronics: In recent years there has been a proliferation in electronic devices in cars. This includes cell phones, CD players, MP3 players, navigation systems, video systems and Internet access devices. Naturally, this provides greater opportunities for shops that develop expertise with these systems.

Digital Marketing Trends

Advertising Spending Increase
The automotive industry saw the largest advertising spending growth in 2010 among other industries, according to a statistic released by eMarketer citing a press release from The Nielsen Company. In 2010, companies in the automotive industry increased their total advertising spend by 20.3%. Meanwhile, those in the financial industry increased their ad spending by 17.9%. Clothing and accessories companies spent 10.8% more on advertising that year, while the media and entertainment industries increased their ad spending by 6.1% and 5.5% respectively.

Traffic to Automotive Retail Websites

When evaluating how worldwide website visitors arrive at automotive retail websites, we see that search engines are the most common channels. In Q1 of 2010, 32.2% of traffic to automotive retail sites came through search engines. The following quarter, search engine traffic to automotive retail websites account for 33.4% of total traffic. While some people use search engines, others type specific URLs into a browser. In Q4 2010, 27.3% of total website traffic came from typing in URLs. Meanwhile, 6.7% of traffic came through ads during the last quarter of 2010. Other paths used to get to automotive retail websites include: bookmark/favorites, email links, blog links and referral links.

Copyright 2011 by Research and Management. All rights reserved.

Automotive

INDUSTRY FACTSHEET
Purpose of Visiting Automotive Retail Websites
Statistics indicate that people visit automotive retail websites for a number of reasons, one of which is to compare models. In the last quarter of 2010, 17.4% of those who visitied an automotive retail website did so to compare models. Meanwhile, 13.3% of respondents admitted they visitied automotive sites to research prices before purchasing. Almost 11% use automotive retail websites to compare vehicle brands, while 8.9% research car features online. Other reasons Internet users worldwide visit automotive retail websites include: learning about companies and to check inventory.

Automotive Mobile Websites

Automotive retailers are also leveraging mobile websites to reaach their consumers. About 21% of companies that provide automotive parts have a mobile website. On the other hand, 15.66% of automotive dealerships offer a mobile version of their website. Interestingly, almost 5% of gas stations have mobile websites.This shows great opportunity for companies in the automotive industry to expand their current mobile activities.

Consumers Use Social Media to Research Vehicles

The majority of consumers worldwide use social media sites to read opinions and reviews about specific brands and models when researching vehicles (34% of respondents in 2010). On the other hand, 27% of consumers use social media to find special deals and offers, while 26% look for helpful hints on social media sites. Twenty-four percent of respondents said they use social media to stay up-to-date on news about new vehicles. Other consumers use social media sites to discuss automotive topics with other consumers (24%) and with auto experts (24%).

Copyright 2011 by Research and Management. All rights reserved.

Automotive

INDUSTRY FACTSHEET
Digital Marketing Opportunities
Immediate Areas of Focus for Social and Mobile
When we look at the latest digital marketing opportunities of social media and mobile for businesses in the automotive sector, their main considerations and focus should be on how they can use these technologies to increase brand awareness, increase customer engagement, drive sales, support specific promotions and strengthen their overall customer relationship marketing. On the social front, automotive companies are leveraging social technologies like Facebook, Twitter, YouTube, blogs, forums and review sites to enable the sharing of opinions, reviews and discussions amongst consumers about their brand and models, communicate special deals, provide information and news about vehicles, and provide automotive expertise to the general consumer population. On the mobile front, companies in the automotive sector are primarily focusing on how they can leverage mobile marketing to create brand awareness, drive leads to dealers and/or enable in-your-pocket exploration and interaction with their products, streamline ways to communicate with prospects and improve the sales experience by making it easier for their customers to research their brand and models while they are on the go. When it comes to social technologies and mobile marketing, below is where we see the majority of building and construction companies making considerations from a strategy standpoint.

Social Technologies Blog Facebook Twitter LinkedIn YouTube News Feeds/ Social Alerts Social Bookmarking Forums Review Sites

Mobile Marketing Mobile Site Mobile Local Search Mobile Ads/ Text Mobile Apps

Copyright 2011 by Research and Management. All rights reserved.

Automotive

INDUSTRY FACTSHEET
Popular Pay-Per-Click Keywords
Keyword used cars car rental cars for sale car sales rental cars used cars for sale car loan calculator car hire car parts classic cars car dealerships electric cars cheap car rentals car auctions cheap cars second hand cars used car hybrid cars new cars rental car Advertiser Competition 0.9 0.96 0.87 0.37 0.96 0.94 0.45 0.99 0.63 0.4 0.35 0.89 0.99 0.76 0.96 0.89 0.7 0.79 0.8 0.97 Global Monthly Searches 1000000 550000 550000 368000 368000 201000 135000 135000 135000 135000 110000 110000 90500 90500 74000 74000 74000 74000 74000 74000 Estimated Cost per Click $1.39 $3.01 $1.59 $0.56 $3.20 $1.49 $1.13 $3.42 $0.66 $0.37 $5.85 $4.05 $2.72 $0.94 $2.06 $0.89 $1.30 $6.99 $4.11 $3.12

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Copyright 2011 by Research and Management. All rights reserved.