Automotive Industry Overview

1. Automotive Industry Overview Patrick Muir | April 2011

2. Table of Contents • Key resource overview • Market sizing and players • Industry trends • Organization & target audiences • KBOs & Adobe opportunities • Summary & takeaways • Appendix • Terminology • Quotes & Notes • Company Indices

3. Contributing Interviews Contributing to Automotive Overview • Austin Bankhead • Tyler White • SVP Corporate Communication • Director of Marketing and Media • VP Sales& Marketing • Zone Marketing Manager • eCommerce Manager • Internet Director • Jim Reimann, Account Executive OBU AutoNation Nissan Ford Motor O’Reilly Auto Parts JM Family Enterprise Team Detroit Ad Agency

4. Resource List

5. Table of Contents • Key resource overview • Market sizing and players • Industry trends • Organization & target audiences • KBOs & Adobe opportunities • Summary & takeaways • Appendix • Terminology • Quotes & Notes • Company Indices

6. Four Main Segments in the Automotive Industry 2 3 1 4 Auto Manufacturers Auto Dealers Auto Parts Retail Auto Repair Description Sell automobile parts to customers. Repair an automobile or auto part. Design, manufacturer, and finance the automobile. Sell the automobile to the customer. Example Brands / Companies

7. Automotive Industry Size Exceeds $800B Date obtained from IBIS World and Hoovers

8. Automotive Industry is Highly Fragmented

9. OMS Customer Industry/Product Penetration: Automotive 9

10. Table of Contents • Key resource overview • Market sizing and players • Industry trends • Organization & target audiences • KBOs & Adobe opportunities • Summary & takeaways • Appendix • Terminology • Quotes & Notes • Company Indices

11. The Big Picture: Automotive Online Video Decision Made Online Purchase Made Offline Industry Trends Mobile Interaction Digital Ad Spend Increasing

12. Online Advertising Spending by the US Automotive Industry, 2010-2015 (billions and % change) 11.4% of all online advertising is from the automotive industry. *Data from eMarketer report “Automotive Marketing Online: Negotiating the Curves,” June 2008

13. Automotive Industry Values Online Video Ads “We are gravitating away from banner ads to more video…because we’re a more highly considered purchase, we’ve got to make an impact. With banner ads we are limited... so, that’s why we’re looking to do more things with sites like Hulu.” According to Video Content Providers in North America, Nov. 2010 % of Respondents

14. Use of Mobile Advertising on the Rise 25% of new-vehicle buyers in 2010 used the mobile internet during their research process.

15. The Classic Automotive Purchase Funnel Prospects Awareness Consideration Marketing & Sales in Control Preferences Purchase Closing Ratio Retention Customers

16. The Digital Automotive Purchase Funnel Prospects Awareness Consideration Customer is in Control Preferences After Purchase Service Relationship Building Purchase Customer and sales in control Closing Ratio Retention Customers

17. Sources Used by US Consumers Who Have Recently Purchased or Intend to Purchase/Lease a Vehicle Websites and Search Engine are a major sources of information for car buyers

18. Dealerships Engage Online to Pull Customers to an Offline Dealer

19. Ford’s Torture Test – Online Video Engages/Educates Customer

20. New Trend is an Integrated Media Marketing Campaigns. Marketing main functions is to get customers through the door. Efforts to integrate campaigns across media “There’s fundamentally much greater impact when we start to think about paid, earned and owned media all working together.” —Scott Monty, head of social media at Ford Motor Co.,

21. Integrated Marketing Campaign – The Ford Fiesta

22. Agenda • Market Sizing and Players • Industry Overview • Organization and Target Audiences • Digital Strategies & KBOs (Key Business Objectives) • Takeaways • Appendix • Key Industry Terms • List of Key Players

23. Organizational Structures Auto Parts Retail & Auto Repair Auto Manufacturers

24. Agenda • Market Sizing and Players • Industry Overview • Organization and Target Audiences • Digital Strategies & KBOs (Key Business Objectives) • Takeaways • Appendix • Key Industry Terms • List of Key Players

25. Digital Tools used to Execute the KBO’s in the Automotive Industry • Educate the Customer • Revenue Generation • Lead Generation • Build Relation-ships • Branding • Mobile • Ecommerce • Website • Website • Website • Social Media • Video • SEM • Video • Email • Email • Social Media • Mobile • Video • Mobile • Mobile • Social Media • Video • Banner Ads • Banner Ads

26. Auto Companies Have Five Principal KBOs Key Business Objectives (KBOs) For Automotive Industry Relative Priority Auto Repair Auto Manufacturers Auto Dealers Auto Parts Retail     1 Educate the Customer Generate Sales Leads Build Relationships Branding E-Commerce     2     3     4 5     

27. Key Challenges Provide Opportunities for Adobe to Add Value Key Challenges/Opportunities For Automotive Companies Relative Priority Auto Repair Auto Manufacturers Auto Dealers Auto Parts Retail     1 Track ROI of digital marketing to in-store sales Keep customer in sales channel Personalization Leverage web infrastructure across BU Keep costs down through efficiency     2     3 4     5    

28. Agenda • Market Sizing and Players • Industry Overview • Organization and Target Audiences • Digital Strategies & KBOs (Key Business Objectives) • Takeaways • Appendix • Key Industry Terms • List of Key Players

29. Summary and Key Takeaways Target Audiences Challenges / Opportunities KBOs Segments • Educate the customer • Generate sales leads • Build relationships • Leverage infrastructure • across BU • Branding • eCommerce • Track RIO of digital marketing to in-store sales • Keep customers in sales channel • Personalization • Leverage infrastructure across all BU • Efficiency • General Manager or SVP of eCommerce • Direct of Marketing and Media • CMO • Auto Dealers • Automakers • Auto Repair • Auto Parts Retail • . Summary • 3. Increase the closing ratio with a smarter purchase funnel. • Engage customers through digital marketing and pull them to a retail location to change a researcher into a buyer. Takeaways • 4. The biggest challenge is to connect digital marketing efforts to in-store sales. • 2. High executive make decisions but rely on internal and external experts • 1. Highly fragmented but dominate players at the top

30. Automotive – Key Performance Metrics

31. Appendix

32. Agenda • Market Sizing and Players • Industry Overview • Organization and Target Audiences • Digital Strategies & KBOs (Key Business Objectives) • Takeaways • Appendix • Key Industry Terms • List of Key Players

33. Key Terms: Automotive Industry • CLOSING RATIO The number of customers sold divided by the total customers. This is the key ratio marketers at Automakers and Auto Dealers use to measure performance. • PURCHASE FUNNEL The process customers go through to purchase an automobile, part, or service. When purchasing an automobile this process takes 3-4 months. Auto parts and repair are very short because the need to purchase something usually results from an something that has broken down. • PRICING METRIC What costs go into buying a product. This can be complex when buying a car. More customers are coming into dealership having the whole pricing metric figured out because of the information they found online. • MAXIMIZE RELATIONSHIP To successfully engage a consumer. • ZERO POINT OF PURCHASE Customers come to a retail location already sold on a product or service because what they learned online.

34. U.S. Market Share of Major Players in Auto Dealerships NEW USED Information from IBIS World

35. Company Index: Auto Dealerships

36. U.S. Market Share of Major Players in Automakers Information from IBIS World

37. Company Index: Automakers

38. U.S. Market Share of Major Players in Auto Parts Retail Information from IBIS World

39. Company Index: Auto Parts Retail

40. Company Index: Auto Repair

41. Types of Products Searched for via Mobile Phone

42. Integration of Media • “We’re putting more and more money into digital, but also into online and offline integrated programs…. It’s not so much a shift as it is a growth in media consumption. If it was as simple as taking money from TV and putting it into digital, it would be easy, but we’re seeing customers spend time with TV and spend time with Hulu and on mobile devices. We have to be in more areas.” —Scott Kelly, digital marketing manager at Ford Motor Co., in an in an interview with eMarketer,February 8, 2011

43. Online Video Metrics

44. Top 10 Automotive Manufacturer Websites Among US Internet Users, Ranked by Market Share of Visits

45. Quotes from Interviewees “It isn’t all about the 30-second commercial anymore.  The future is digital.” “Educating the customer is the primary goal.” “There is a big cost to provide access to multiple communication streams. How do we get a return on our communication?” “In 3 to 5 years customers will be able to buy a car from the website.” “Our dealerships track inventory levels based on web analytics. If a certain type of car is getting a lot of hits online, we make sure have increase the inventory levels.” “We find monthly traffic to our site has the highest correlation to actual sales volume.” “We believe connecting with shoppers online where they consume media, with compelling content, is a key ingredient to sales volume..”

46. Consumers Worldwide Who Have Internet Access viaTheir Car, 2009 & 2016 (thousands) *Data from eMarketer report “Automotive Mobile Market Shifting Gears,” June 2010

47. Auto industry ad spending will grow to 13% of total online spending by 2015

48. CEO Organizational Structure - Automaker • CMO • Vice President of Marketing • Internal • IT Strategists Manage website and digital marketing • Outside Agency Experts • Director of Marketing and Media Ultimate decision maker • Vehicle Line Brand Manager • Vehicle Line Brand Manager • Vehicle Line Brand Manager

49. GM • CEO Organizational Structure – Auto Dealership Corporate Dealership Local Dealership Ultimate decision maker • Sales Manager • SVP eCommerce • VP eCommerce • Director • eCommerce Ultimate decision maker • Internet Director Manages website Manages website and digital marketing IT Team

50. CEO Organizational Structure: Auto Parts Retail • CMO Ultimate decision maker • VP Marketing • eCommerce Manager Manager of the website