Ad Optimization Tier Research Presentation

® 2015 Cox Automotive, Inc. Proprietary & Confidential.

T1-T3 Research Study Maximizing the Autotrader Advertising Experience


Autotrader aimed to prove that its Multi Tier ad experience generates the most impact

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Research Questions

• How do ad placements impact…

o Vehicle purchase consideration and dealership

visitation intent?

o Brand & Dealer recall, perceptions of vehicles and

dealerships, and motivation to take action?

• What impact does incentivized messaging have on

consumers’ response to advertising?

x

Quantify advertising value for…


Speaking to a relevant audience

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Respondent Qualifications n=2,103:

• In-market for a new sedan or truck within the next 12 months

(70%/30% split)

• Actively searching for next vehicle

• Considering a qualifying vehicle for purchase/lease

• Aware of/have visited an automotive resource site

• Age 18-64

• 59% Male / 41% Female

• Not employed in sensitive industry

• Primary / joint decision maker

• Currently have a driver’s license

Honda Accord

Toyota Camry

Ford Fusion

Chevrolet Malibu

Toyota Tundra

Ford F-150

Chevrolet Silverado

Dodge Ram


Qualifying

Vehicles


Consumers evaluated various combinations of Tier advertising within the website experience

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Endemic Regular Messaging Incentive Messaging

Tier 1 Usually filled with an ad

from the VEHICLE

MANUFACTURER

(e.g. Toyota)


from the REGIONAL

NETWORK

OF DEALERS

(e.g. Southern California

Toyota dealers)


from the LOCAL DEALER

(e.g. Miller Toyota)


Consumers answered pre-exposure questions, were exposed to the website experience, then answered post-exposure questions

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Pre Exposure

to Advertising

• Likelihood to consider

buying

• Likelihood to visit

dealer

• Call to action

• Vehicle/Dealer

perceptions

• Brand familiarity

• Dealer awareness

Post Exposure

to Advertising

• Likelihood to consider

buying

• Likelihood to visit

dealer

• Call to action

• Vehicle/Dealer

perceptions

• Make/Model recall

• Dealer recall

N=350

Ad Experience

Tier 1/2/3 Cell


Does a three tier buy work better than two or one?

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The Power of a Multi Tier Ad Experience on Autotrader

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CREATING VALUE FOR

OEMS



A Multi Tier ad experience has the most influence on vehicle purchase consideration

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Base: Total N=2103. Discrete Choice Model: Optimized Comparisons of the Monadic Placements (SRP).

Includes Regular and Incentive. DCM1: Which of the two web pages makes you most likely to consider

[MAKE/MODEL] for your next vehicle purchase or lease?`

Layout that makes you most likely to consider purchasing vehicle

%

Endemic

%

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%

T1 + T2 T1 + T2 + T3 T1 T1 + T3

%



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ad experience is more motivating because the ads…

%

%

%

Are more

appealing

together

Stand out more

Give more information

about where to buy

Base: Chose T1/2/3 layout at FC1. N=632

FC3. Please tell us why you chose this webpage.

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Multi Tier – T1+T2+T3


A Multi Tier experience drives vehicle make and model awareness

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Correct

unprompted

recall for…


Featured Vehicle Make

(ex: Toyota) Featured Vehicle Model

(ex: Camry)

79% 79%

85%AB

71%

73%

78%A

Base: 3 Tiers N=350; 2 Tiers (Net) N=701; 1 Tier (Net) N=1052.

A/B/C Significantly difference at 90% confidence interval.

AD3. Using the space below, please list the vehicle that was featured in the advertising on the webpage.

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TIER TIER TIER TIER TIER TIER

Double Tier – T1+T3 or T2+T3

Single Tier – T1 or T2 or T3



Perceptions of style, availability, and performance increase with greater tier exposure

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+17%

+40% +9%

+15%

+13%

Stylish

High performance vehicle

Agree completely that the

featured vehicle…

Newest models available

Base: 3 Tiers N=350; 2 Tiers (Net) N=701; 1 Tier (Net) N=1052.

Significant PRE/POST lift at 90% confidence interval

PRE2/POST2 (Top Box): Based on the automotive resource site web

pages, please rate how much you agree that each statement describes [MAKE/MODEL].

Vehicle Perceptions Pre/Post Lift

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Single Tier – T1 or T2 or T3



Creating Value for OEMs: Recap

•A Multi Tier ad experience influences purchase consideration 3x more than endemic ads

•A Multi Tier ad experience is more appealing and more noticeable than a Single or Double Tier ad experience

•A Multi Tier experience generates the highest lift in make/model recall – significantly more than a Double or Single Tier experience

•OEMs enjoy a unique boost in perceptions of style, availability, and performance with a Multi Tier ad experience

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TIER 2

IMPACT



Tier 2 advertising enhances purchase consideration when paired with Tier 3 14


Includes Regular and Incentive. DCM1: Which of the two web pages makes you most likely to consider

[MAKE/MODEL] for your next vehicle purchase or lease?`

Layout that makes you most likely to consider purchasing vehicle

%

Endemic

T3 T2 + T3



Tier 2 and Tier 3 also generate higher intent to visit a local dealer than Tier 3 alone

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Layout that makes you most likely to visit local dealer


Includes Regular and Incentive. DCM2: And now we’d like to know, which of the two web pages makes you

most likely to visit your local [VEHICLE BRAND] dealer?

%

Endemic T3 T2 + T3


16 Consumers are significantly more likely to call a local dealer when Tier 2

advertising is shown along with Tier 3

Base: Tier 3 N=351; Tier 2 + Tier 3 N=351. Significant PRE/POST lift at 90% confidence interval

PRE3/POST3 (Top Box). Based on the automotive resource site web pages, how likely are you to do

each of the following in the future when shopping for a [MAKE/MODEL]?


Call a Local Dealer to ask about Inventory or Pricing Pre/Post Lift – Extremely likely to…

-9%

+45%

Tier 3 Tier 2 + Tier 3


Tier 2 Impact: Recap

•Tier 2 advertising enhances purchase consideration when paired with Tier 3

•Tier 2 and Tier 3 generate higher intent to visit a local dealer than Tier 3 alone

•Consumers are significantly more likely to call a local dealer when Tier 2 advertising is shown along with Tier 3

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CREATING VALUE FOR

DEALERS



Would recommend to others


Is a good value

Broad selection available at the

dealership

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Base: Tier 1 N=351; Tier 2 N=350; Tier 3 N=351.

Significant PRE/POST lift at 90% confidence interval. PRE2/POST2 (Top Box): Based on the automotive

resource site web pages, please rate how much you agree that each statement describes [MAKE/MODEL].

Tier 3 ads encourage word of mouth, and communicate selection & value

+6%

+9%

+6%

+18%

+33%

+24%

+20%

+19%

+12%

0%

-5%

+11%

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Tier 1 Tier 2 Tier 3 Agree completely…


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Broad selection available at the dealership

Offered at high quality dealerships

Would recommend to others


Available at a local dealer

Base: Tier 1 N=351; Tier 1 + Tier 3 N=350.



Tier 3 advertising especially compliments Tier 1

0% 40% 10% 20% 30%

TIER 1 TIER 1 + TIER 3

+0%

+11%

+6%

+12%

+6%

+38%

+28%

+26%

+21%

+11%

+4%

-4%

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Agree completely…


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Base: Tier 1 N=351; Tier 1 + Tier 3 N=350; Tier 1+Tier 2+Tier 3 N=350.



All three tiers maximize perceptions of quality, performance, and availability

Offered at high quality dealerships


Available at a local dealer

0% 40% 10% 20% 30%

TIER 1 TIER 1 + TIER 3

+6%

+6%

-4%

TIER 1 + TIER 2 + TIER 3

+26%

+33%

+13%

+11%

+4%

+11%

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Agree completely…


Tier 3 enhances Tier 1 and Tier 2 ads. The Multi Tier ad experience is the most effective at driving dealer visits

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Layout that makes you most likely to visit local dealer

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Includes Regular and Incentive. DCM2: And now we’d like to know, which of the two web pages makes you


%

Endemic Tier 1

+ Tier 3

Tier 1 +

Tier 2 + Tier 3

Tier 1

+ Tier 2

Tier 2

+ Tier 3


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Base: Tier 1+Tier 2+Tier 3 N=350. Significant PRE/POST lift at 90% confidence interval

PRE3/POST3 (Top Box). Based on the automotive resource site web pages, how likely are you to do

each of the following in the future when shopping for a [MAKE/MODEL]?

All three tiers work together to inspire the most interaction with local dealers

+50%

+29%

+17%

+11%

+10%

Extremely likely to…

Call a local dealer to ask about inventory or pricing

Visit a local dealer in person for a quote or a test drive

Visit a sales event at a local dealer

Search for local offers

Visit a local dealer’s website

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Call to Action Pre/Post Lift

TIER 1 + TIER 2 + TIER 3


Creating Value for Dealers: Recap

•Tier 3 ads communicate dealer selection & value, and encourage recommendation. Tier 3 especially compliments Tier 1, with all three tiers maximize quality, performance, and availability perceptions

•Tier 3 enhances Tier 1 and Tier 2 ads, but the Multi Tier ad experience increases dealership visitation intent 3x more than Endemic ads

•Beyond visiting a dealership, Tier 3 activates all types of dealer interaction, while the Multi Tier experience inspires the most interaction with local dealers

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What messaging produces the most effective SRP?

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Optimizing the Autotrader Advertising Experience


Incentive messaging is more impactful than regular messaging in driving vehicle purchase consideration

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Impact of Messaging on Likelihood to Consider Purchase

T1 T2

T3

%

T1 T2

T3

%

+32%

Base: Total N=2103

Discrete Choice Model: Optimized Comparisons of the Monadic Placements (SRP). DCM1: Which of the

two web pages makes you most likely to consider [MAKE/MODEL] for your next vehicle purchase or lease?

Regular Incentive

Endemic

%



Incentive messaging is also more likely to spur dealership visitation 27

Base: Total N=2103

Discrete Choice Model: Optimized Comparisons of the Monadic Placements (SRP). DCM2: And now we’d like

to know, which of the two web pages makes you most likely to visit your local [VEHICLE BRAND] dealer?

%

% % Endemic

T1 T2

T3

T1 T2

T3

+21%

Regular Incentive

Impact of Messaging on Likelihood to Visit Dealer



+6%

+30%

+13%

Incentive messaging is most influential when communicating sales events or cash back offers, especially in driving vehicle purchase consideration

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DCM1: Which of the two web pages makes you most likely to consider [MAKE/MODEL] for your next

vehicle purchase or lease?. DCM2: And now we’d like to know, which of the two web pages makes you


Incentive Messaging Lift Over Regular Messaging

+8%

+20%

+11%

Limited

Time

(T1)

Sales Event

& Cash Back

(T2)

Cash

Back

(T3)

Limited

Time

(T1)

Sales Event

& Cash Back

(T2)

Cash

Back

(T3)

Likelihood to Consider Purchase Likelihood to Visit Dealer


Optimizing Recap

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• Incentive messaging works 20-30% better than regular messaging in fueling vehicle purchase consideration and intent to visit a dealer

•The most motivating incentive messages feature sales events and specific cash back offers


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Summary


Multi Tier Autotrader Advertising Experience: Summary

Tiers are stronger together. A Multi Tier advertising buy generates the most impact on key outcomes and perceptions for both OEMs and dealers.

Each tier benefits from a Multi Tier advertising experience. An integrated ad experience is more impactful than any of the tiers on their own.

Incentivized messaging is more powerful than regular. Incentivized messaging in the most important ad slots creates the highest impact on vehicle consideration and dealership visitation.

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Tier 1 advertising is instrumental for OEMs in communicating the vehicle brand and perceptions, while also positively impacting dealers

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Communicates brand Make & Model

Highlights key vehicle attributes

Inspires action

Broad selection available

High quality dealerships

Special offers/incentives available

Visit dealer website

Find local dealer/call about inventory or pricing

Visit a sales event

PERCEPTIONS

ACTIONS

Good Value Newest models

available Stylish

High

Performance

Recommend to others Visit brand website

Creates halo effect for dealers


Tier 2 advertising benefits from sales events and cash back messages. Ads highlight the dealers while also reinforcing the OEM

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Sales events & cash back deals are powerful

incentive messages

Highlights key dealer attributes

Inspires action

Visit brand website


Stylish

High Performance

Fuel efficient

Good value Visit local dealer for quote/test drive

Recommend to others Visit local dealer website

Search for local offers Find a local dealer

Call about inventory/pricing Visit a sales event

Available at my local dealership

High quality dealerships Special offers/incentives available

Also

reinforces

OEM

Broad selection available


Tier 3 advertising drives awareness of the dealership, and encourages interaction

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Communicates dealership name

Highlights key dealer perceptions

Inspires action

Newest models available Broad selection available

Visit local dealer for quote/test drive

Recommend to others Visit local dealer website

Search for local offers Find local dealer

Call about inventory/pricing Visit sales event

Stylish

Good value

Fuel efficient

High performance

Reinforces

vehicle features

Documents

Ad Optimization Tier Research Presentation