1DP-BR INDEPENDENT DEALER PROFILE & MEDIA USAGE
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1 1DP-BR 2013 INDEPENDENT DEALER PROFILE & MEDIA USAGE
2 ABOUT THIS RESEARCH Independent dealers have been and continue to be critical to AutoTrader.com s business. To better understand how Independent dealers operate and use media for advertising purposes, we recently commissioned two studies. The first study, conducted by research firm GfK, looked at the current media usage from 630 Independent dealers across the U.S. that sell more than 10 or more cars per month. The key findings showed surprisingly strong support for and participation in online digital advertising: 85% of those surveyed advertise their cars on the Internet and two-thirds of them use online classifieds. The second study, conducted by Harris Interactive on behalf of AutoTrader.com, looked at the perceived value of different media from 191 Independent dealers across the U.S. One of the most interesting findings albeit, surprising was that 69% viewed online classified advertising as valuable compared to just 36% who viewed SEM as valuable. The results from both studies provide strong conclusions that the majority of Independent dealers believe their sales and corresponding operations are directly related to their presence on the Internet.
3 INDEPENDENT DEALER PROFILE OVERALL MARKET SIZE More than half have dedicated Internet advertising staff Majority are in suburban and rural markets, and many serve the full array of customer credit types Medium-size lots with profits near $2,000 per vehicle sold Total estimated Independent dealers = 50, ,000 Independent dealers sell 10 + cars per month The following assessment utilizes the base of those 28,000 dealers selling 10+ cars/month 10 + SALES & PROFIT The average gross profit for Independent dealers who sell 10 or more cars per month is nearly $2,000, including F&I, warranty and service contract. Average Monthly Sales Volume Average Gross Profit/ Vehicle Sold 36 $1,934 Units Sold Gross Profit OPERATIONS Independent dealerships are typically smaller than franchise dealerships; however, more than half designate some manpower to Internet activities. Total number of employees (Mean) Currently has Internet department (% Yes) Number of Internet department employees (Mean) 8 57% 1.8
4 LOCATION & CUSTOMER CREDIT SCORE Independent dealers are more likely to be in a suburban setting; 1 in 3 serve customers with below-average credit. URBANICITY* CUSTOMERS SERVICED 14% 49% 36% Urban Suburban Rural 70% 60% 35% 32% Good Credit Bad Credit No Credit Buy Here, Pay Here *Total does not add up to 100% due to rounding PERCEIVED VALUE OF ADVERTISING MEDIA PERCEIVED VALUE OF SELECT DIGITAL MEDIA Internet 87% Auto Classified Sites 69% TV Classified Magazines 25% 21% SEM 36% Newspapers 10% Radio Direct Mail Outdoor Ads 10% 6% 3% Independent dealers view the Internet as more than 3 times as valuable as traditional media.
5 MEDIA BEHAVIOR What they do MORE of: 85% use the Internet for advertising, 67% of which use online classifieds. What they do LESS of: Use SEO/SEM as much overall half that of online classifieds Use traditional media CURRENT MEDIA USAGE KEY TAKEAWAYS MEDIA CHANNEL USAGE Internet 85% Newspaper Classified Magazines 34% Direct Mail Radio Outdoor 24% 19% TV 14% 13% 41% ONLINE ADVERTISING USAGE* Own Dealership Website 82% Online Shop/ Classified Social Network Websites 44% Search Optimization Search-Engine Marketing 41% 29% Lead Providers 28% Banner Advertising 20% 67% 85% of Independent dealers use the Internet for advertising 67% of these Internet users advertise on third-party sites SEO/SEM usage is less than half of classified advertising Independent dealers value the Internet 3 times more than traditional advertising, but value and use traditional advertising, too * of those 85% who use the Internet
6 2013 AutoTrader.com, Inc., All Rights Reserved. AutoTrader, AutoTrader Classics, AutoTraderClassics.com, and the AutoTrader Classics logo are trademarks or registered trademarks of TPI Holdings, Inc., all used under exclusive license. 13-Q2-066
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