The auto industry is wrestling with numerous marketplace issues, the most public being high gasoline prices, and perhaps the most challenging being the internet's impact on consumers' media use. To better understand these two issues, Burst Media surveyed over 10,000 viewers of online content. The study's primary focus is on the 2,300 respondents who plan on purchasing or leasing an automobile in 2006 or later. The survey explored the impact gasoline prices have had on purchase behavior, as well as the role the internet will play in the automotive purchase process. Interviews were conducted during the first two weeks of July 2006.
The impact of gasoline prices
Gasoline prices matter-- in fact one-third (32.1 percent) of survey respondents say the price of gasoline has impacted their decision to purchase or lease an automobile. Interestingly gas prices have not only driven people out of the market, but also driven people in-market.
Among respondents who plan to purchase or lease an automobile in the next six months, one-fifth (20.8 percent) have accelerated and 17.5 percent have delayed their plans because of gasoline prices. Among respondents who plan to purchase or lease in 2007 or later, 11.1 percent have accelerated, and one in five (21.9 percent) have delayed their plans because of gasoline prices. Significantly, among respondents who are not in-market, one in four (26.3 percent) have postponed plans to purchase or lease a new or used automobile because of gas prices.
Among in-market respondents, half (52.3 percent) say they will most likely purchase or lease a new automobile, 30.9 percent will most likely purchase a used automobile and 17.1 percent have not yet made up their mind. Again, gasoline prices matter-- three out of four (75.3 percent) in-market respondents say the price of gasoline has had an influence on the type of vehicle they may purchase. Furthermore, the impact of gasoline prices is not reserved to respondents in lower household income (HHI) segments. In fact, at least two-thirds of all income segments (including 68.0 percent of respondents reporting HHI of $100,000 or more) say that the price of gasoline has had an influence of the type of vehicle they may purchase.
Cars people want
The mid-sized car is the most popular (24.5 percent) automobile type in-market respondents would consider purchasing or leasing. This is followed closely by the SUV (21.7 percent) and compact car (21.4 percent) categories. Other vehicle types cited by in-market respondents include full-size car (15.2 percent), luxury car (11.8 percent), sports car (11.3 percent), van (10.4 percent), full-sized pick-up (9.1 percent) and compact pick-up (7.1 percent).
Hybrids or electric vehicles are cited by 16.4 percent of in-market respondents as a consideration for purchase or lease. The hybrid vehicle appeals to all age segments, though the likelihood to consider purchasing or leasing increases as respondent age increases, as you can see from the chart above. Also, in-market respondents who plan to purchase or lease an automobile in 2007 or later are more likely than those who plan to purchase in 2006 to say they would consider a hybrid or electric vehicle-- 19.5 percent versus 11.6 percent, respectively.
Reputation for quality resonates
Respondents were asked to rank a series of attributes in order of importance to their decision to purchase a particular vehicle. In-market respondents indicated that "reputation for quality" was the most important attribute impacting their decision to purchase a particular vehicle. This attribute was closely followed by price, and fuel economy. Style/looks was ranked as the fourth most important attribute, and was followed in descending order by size (passenger capacity), warranty, performance/speed and size (cargo capacity).
The internet's research role
Nearly half (47.4 percent) of in-market respondents say they will "definitely use", and 35.6 percent say they will "probably use" the internet to research automobile models they might purchase or lease. Nearly one-third (29.9 percent) of this 'internet researcher" segment cite independent websites not affiliated with an automobile company as the best source of information on automobile models they might consider purchasing or leasing. Other best sources of information cited includes family and friends (15.7 percent), local auto dealership (11.5 percent), magazines (10.3%), automobile company websites (9.3 percent), local newspapers (4.6 percent), television (4.2 percent), national newspapers (2.1%) and radio (1.7 percent).
Pricing information is the most popular (72.3 percent) information "internet researchers" will be looking for when researching an automobile model online. It is followed by fuel economy information-- cited by nearly three out of five (59.2 percent) internet researchers. Following these two information bits, there are noted differences in the types of information male and female respondents say they will seek online. For example, female respondents are much more likely than male respondents to say they will seek safety information (60.8 percent versus 42.2 percent), crash test rating information (49.1 percent versus 33.6 percent) and warranty information (46.0 percent versus 36.6 percent).
Source: Burst Media Research, July 2006 N=2,366
Is creative cutting it?
In-market respondents were asked their opinion of online automotive advertising campaigns. Few (17.0 percent) thought the campaigns they could recall were "cutting edge," and only one-third (32.9 percent) thought they were "better than what is on television or in newspapers and magazines, but not cutting edge". Interestingly, more than one-third (39.8 percent) of in-market respondents thought the online campaigns they recall seeing were "recycling" what was being done in other media; and one-tenth (10.4 percent) said the online campaigns were "worse" than what was being done on television or in newspapers and magazines.
Only among the 18-24 years and the 25-34 years in-market segments do a majority say the online automotive creative is "cutting edge" or better than what is in other media. However, even among these internet-savvy age segments, at least one-third say online creative is "recycling" what is done offline.
Source: Burst Media Research, July 2006 N=2,366
Without surprise, the findings highlight the impact high gasoline prices are having on consumers' decision to purchase or lease a new vehicle, as well as the vehicle models they will consider. The findings do point to opportunity, as consumers who might not have been in-market enter the marketplace, and consider fuel efficient models and hybrid vehicles. Also, the findings validate the enormous impact the internet has on the consumer's automotive purchase process. With estimates putting internet penetration among adults in the U.S upwards of 70 percent (Mary Madden, "Internet Evolution", Pew Internet & American Life Project, April 2006), automotive marketers must utilize the medium as both a means of providing massive amounts of product information and a vehicle to deliver relevant and engaging advertising messages.
Chuck Moran is manager of market research at Burst Media. .