Filed under: Car Buying, Marketing/Advertising
Google says automotive "sales funnel" no longer true
Conventionally, automotive marketers have believed most car shoppers take at least six months to make up their minds on what to buy. That half-a-year of shopping is what marketers call the "sales funnel." It works like this: First the need for a new car is recognized then six-months later, someone's driving away in a new car. In between, shoppers do all their research, line up financing, etc.
And that's the theory around which most automotive marketing departments and ad agencies have traditionally planned their campaigns for either brand building or ads meant to get folks into dealerships.
Google, however, says they're wrong. Way wrong.
[Source: BusinessWeek]
Led by Bonita Coleman Stewart, a former Chrysler ad exec, Google did a little research that showed that most car buyers take far less time to buy. In fact, more than 70-percent take less than one month of research and financial planning before signing on the dotted line. Which we're thinking might explain all those Uplanders we see on the road.
Google says their research points to a need for automotive ad agencies to put much more money into their online budgets, especially online video ads. Which, of course, anyone could have predicted Google might say. It is, after all, how they get their lunch money. But to back up their claims, Google says nine billion videos were viewed on its YouTube service in July alone, and 382 million of those were automotive related. We'll take credit for a few of those viewers, by the way, Mr. Google.
With such a short shopping time, and billions watching online video, says Stewart in a BusinessWeek article, means "... car marketers need to be engaging 24/7, and you can only do that online."
Reader Comments (Page 1 of 2)
Mike 11:20AM (9/22/2007)
Well, I don't know about anyone else, but I start test driving 6-8 months in advance. When the impulse hits me. When I bought my car, I was test driving it and others 6 months before I bought it. 4 months prior, I went for another test run, for a refresher. 2 Months prior, I set out to find my "target" dealer. The week before I bought it I shopped around, long since having my finances in order, and all the knowledge I needed.
When all was said and done, the final dealer I selected didn't get a chance to demo the car. I simply barked out the price that I "was gonna pay for it." Ended up quite well.
Most people in fact know they are gonna buy a new car within the next 6 months. Google is misinterpreting the results by assuming that everyone searches google and you tube when looking for their new car. :p LOL
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YouFaceTheTick 3:02PM (9/22/2007)
I take several months to 6 months and when I help others they follow the same patterns. Every person I've helped is still in love with his/her car, so I think my pattern works. Decide what's important and rank those features: shape, doors, hatch/trunk, space, mileage, reliability, FWD/AWD/RWD, transmission, luxury content, performance angle and go from there. The people I help drive even the cars they say they're not interested in. Why? Because the drive may change their minds...it did for 3 people so far (one ended up with the 3 series he refused to set foot in, another got an A3 even after saying it was too expensive and the last one ended up in a VW even though she swore she'd only by Japanese). Taking your time, waiting for a deal and finding the perfect car...that's how to shop.
Random Task 11:27AM (9/22/2007)
I've been looking for a new car for 3 years. Luckily the 1993 G20 has been pretty trouble free.
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Larry 11:33AM (9/22/2007)
I am an impulse buyer! Something "new" pulls up next to me at a light, catches my eye, and next day I have a new car!
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Rene Curry 11:35AM (9/22/2007)
It has been my experience that most people have a life change that drives a vehicle purchase. Then they move quickly into buy mode.
They can decide on what they want to purchase in one to two weeks. Then the next quick step is the actual attempt to purchase and establish affordability. This will then complete or cancel the event.
* The present vehicle may have many problems, need major repairs, or have been damaged.
* Kids !
* Second car
* Kids move out!
* Job change, good or bad.
* Middle age crazies
* Toys to tow.
* Gotta have
* Money winfall
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Barney 1:20PM (9/22/2007)
I agree completely with your posts. The time element is not written in stone and the factors you listed are more relevant. Few people buy a new car just because they feel like it. It takes less time for people to decide on what house they are going to buy but the decision to buy a house takes longer.
Richard Warren 11:41AM (9/22/2007)
After years in and around the biz, the majority of cars get sold now, not later. Cars are still an impulse item.
And----of course, Google is going to tell the makers they need more web time. DUH! They want to sell the makers right now.
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Dinger 11:56AM (9/22/2007)
Right. Goggle does research and comes up with, "Oh gosh guys, your years of automotive study are all wrong and you need to spend more money, lots more money, on internet advertising. Lucky for you we did this research, eh? And please send those new bigger checks to 1 Goggle Plaza, thanks"
AnonyMust 12:02PM (9/22/2007)
Even tho the internet has put vluable information at the fingertips of the consumer, which assists them greatly, this has not changed the fact that many car buyers are impulsive and emotionally driven. My dealers friend insists that countless #'s of sales each month are of this variety. I still believe that many buyers can be sold on a deal they never planned on just because a salesperson did their job well.
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500 10:31PM (9/22/2007)
I agree. I researched my last car purchase for about a year, considered/test drove around a dozen models, and in the end I was swayed by a salesman who offered an overnight test drive in a model I hadn't even considered. Bought it the next day. And, I still love the car.
MattS 12:07PM (9/22/2007)
I think that is complete garbage, I started looking for my 07 Camry in August of 2006 and didn't take delivery of it until May of '07. We're looking for another car and we started about 3 months ago, I don't expect to actually to get that descision made until November.
I don't know anyone who makes a snap descision in this area.
m
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RicardoHead 12:16PM (9/22/2007)
Since one of the founders of Tesla is a Google kazillionaire, I think if Google found the marketing miracle he would cover it up and use this inherent advantage to gain market dominance.
Still, this revelation by Goog is typical of the northern Cal "we know everything better" approach to the world.
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tbyron 12:42PM (9/22/2007)
If this were only up to my wife, the realization-research-decision process would take about a week.
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Joe K. 1:01PM (9/22/2007)
As a guy that was a car salesman for 5 years I will say there are plenty of people who follow the traditional 'funnel' and there are plenty of others who stop in and decide within 2 weeks. It all depends on what step you start with. Some like to drive a car before paring down their options, some like to look at features and figures before ever driving a car and wind up driving only one or two cars. Some know what they want because they are so happy with the one they had before so they buy a new one (Pick-up segment and Accord or Camry owners come to mind)
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Rick Lyon 1:26PM (9/22/2007)
Google half right and half wrong. My first car took me about 3 months to decide. My second car took me about a month to decide. So, it's not 6 months, and it wasn't as short as a month either. However, I suspect a lot of people go with a brand blindly without researching as deeply across other brands thus making their decision quicker.
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Drewboy 2:01PM (9/22/2007)
I've never had more than a couple days to mull over buying a new car. My first car my parents essentially picked out, when that one started to go to crap I looked at a dealer at the same time my younger brother was getting his 2nd car and we both got a decent deal through the same dealer & salesman. That happened within the span of 2 days. Then when that car was wrecked I ended up in my current car of nearly 5 years with one week of decision making. My wife's car was bought in a weekend, after one week of looking.
There are too many cars out there that I like, as an auto enthusiast for me to have every one I'd like to have. I might as well keep it short and to the point, or else second guess my choices too much.
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Craig 2:20PM (9/22/2007)
Um Bonita used to run interactive marketing for Chrysler, so first question is where was this epiphany while working FOR the automotive companies, especially while every CRM group internally and at their respective agencies embraced and segmented activities based on upper/lower funnel activities?
Secondly, as someone mentioned above, there is quantitative research based on millions of car shoppers that proves the est 6 month purchase cycle. The auto companies have this data, they cookie everything on their sites...
I'm sorry, I hold nothing against her but this just sounds like a cheap marketing ploy to get Google more exposure with the automotive companies.
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Grant P 2:29PM (9/22/2007)
I spent about 6 months researching different cars, knew that I would have to order mine, giving me time to get the finances in order. After finally deciding to pull the trigger, I went to different dealers, but couldn't get the deal I wanted. I shifted gears, walked into a different company's dealership, drove the car for the first time, and ordered it the next week.
Sometimes, months of research gets thrown out of the window at the last minute. By the way, how many ads do you see for European cars on TV or radio? since there are so few, why are they so popular? Perhaps Google is right that online advertising is the way to go, but my choice on the car I ordered (or on the previous car I wanted) was not influenced by any advertisement at all.
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WillDaThrill 2:45PM (9/22/2007)
I've been looking for a RWD/AWD powerplant. I was going to settle for a G37 or some low end lux, but now I'm holding my breathe for what Dodge and Chevy offer in '08-'09. Guess I'll just test drive till then.
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Jim Reynolds 3:24PM (9/22/2007)
Everyone's right. There is a large segment of the car buying public who put in months and months of research (I'm one of them). There is also a large segment of the car buying public that buys on impulse (I've been around many of them).
Different strokes for different folks.
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