Consumer Querimetrix
- 1. Option 1 presents New Rules, NewTools!
- 2. CONVENTION TODAY. INVENTION YESTERDAY
- 3. An illustration—the Beer Can PULL-TAB
- 4. Today’s convention—the Pull Tab
- 5. The Moral—not about beer cans But the story: - not about beer cans The main plot: -The obsolete tool (churchkey) TODAY’S CONVENTION was YESTERDAY’S INVENTION
- 6. New Rules, New Tools WHEN RULES CHANGE, TOOLS NEED TO CHANGE!
- 7. CHANGING GROUND RULES ARE CHANGING
- 8. The India story—a ‘digital’ consumer story Source: IAMAI, IMRB International, TRAI
- 9. Search queries—capture the Zeitgeist
- 10. EXAMPLE: THE EVOLVING CAR-BUYING JOURNEY
- 11. Car-buying journey—Then and Now!
- 12. The New Consumer Decision Journey PURCHASING FUNNEL— a simple straight route NEW CONSUMER DECISION JOURNEY—more complex and unpredictable
- 13. The Active Evaluation Phase • Active evaluation adds 2-3 more brands to your initial consideration • Only BUDGET and COLOR are non-negotiable • At least ONE brand initially considered gets eliminated • 54% of car buyers change their consideration set during their research phase
- 14. Google searches—in evaluation phase 40% YoY growth in car queries 100+ queries every second on Google search 8-10 times daily On average every car buyer uses Google search during his car buying journey 50% car buyers research themselves 25-30% additional car buyers have their friends and family research for the car purchase
- 15. DECODING GOOGLE TRENDS: BIG DATA PROBLEM
- 16. Solving A Big Data Problem • Are search queries related to real-world activity? • If so, which search categories/queries are relevant? Consumer activity needs to be associated with search queries
- 17. In A Big Data World QUANT OLD TOOLS BIG DATA WEEK #1
- 18. Big Data—solution or problem? 1) ADAPTABILITY TRADITIONAL DECISION SUPPORT TOOLS SHORTCOMINGS: GAME-CHANGER? INFORMATION OVERLOAD? 2) SCALE
- 19. QUERIMETRIX: BIG DATA MEETS MACHINE LEARNING
- 20. Consumer Querimetrix TELEMETRY (REMOTE MEASURE) CONSUMER SEARCH QUERIES Uses framework proposed by Hal Varian and Steven Scott ‘Predicting the Present using Bayesian Structural Time Series’ whitepaper series (2009-14)
- 21. The need for Machine Learning ADAPTABLE: multi- utility SCALABLE: ASIMO to Predictive text
- 23. Consumer Querimetrix • Identifies proxy indicators • Delivers on-ground insights • Nowcasts to stay ahead of the herd • Catches inflection points earlier • Derives business insights using digital footprints
- 24. Consumer Querimetrix • identifies proxy indicators • Delivers on-ground insights • Nowcasts to stay ahead of the herd • Catches inflection points earlier • Derives business insights using digital footprints
- 25. Querimetrix—as a proxy indicator • OLX is a clear leader from Google Trends data OLX leads Quikr in auto-related queries on Google Normalized query trends for India car classifieds, 2004-current Source: Google Trends, Kotak Institutional Equities 0 20 40 60 80 100 120 Jan-04 Jun-04 Dec-04 May-05 Nov-05 Apr-06 Oct-06 Mar-07 Sep-07 Feb-08 Aug-08 Jan-09 Jul-09 Dec-09 Jun-10 Nov-10 May-11 Oct-11 Apr-12 Sep-12 Mar-13 Sep-13 Feb-14 Aug-14 Jan-15 Jul-15 Dec-15 carwale cartrade olx quikr
- 26. Consumer Querimetrix • Identifies proxy indicators • Delivers on-ground insights • Nowcasts to stay ahead of the herd • Catches inflection points earlier • Derives business insights using digital footprints
- 27. The Maruti Baleno car launch 21,000+ Bookings in 10 days after launch 56,000 footfalls in 10 days of launch 9,000 November 2015 sales (>i20) 40,000+ Bookings since launch
- 28. Querimetrix—an ear to the ground 0 20 40 60 80 100 Nov-11 Jan-12 Mar-12 Jun-12 Aug-12 Oct-12 Dec-12 Mar-13 May-13 Jul-13 Oct-13 Dec-13 Feb-14 May-14 Jul-14 Sep-14 Nov-14 Feb-15 Apr-15 Jun-15 Sep-15 Nov-15 Honda Amaze Ford Ecosport Hyundai Creta Maruti Suzuki S-Cross Hyundai Xcent Renault Kwid Car model launches result in large online inquiry of launched model Google Trends search volumes of recently launched cars in India, 2011-15 Source: Google Trends, Kotak Institutional Equities Kwid Second-best launch Baleno Best launch of the year
- 29. Querimetrix—on ground insights A linear relationship is evident between advance bookings and search volumes The relationship between search queries and advance bookings during car launches Source: Google Trends, Kotak Institutional Equities 0 10,000 20,000 30,000 40,000 0 20 40 60 80 100 Maruti S-Cross Hyundai Creta Hyundai Xcent Honda Amaze Ford Ecosport Trend Maruti Baleno Linear (Trend) Indexed Google query volumes Advancebookings higher search- share higher bookings
- 30. Querimetrix—an ear to the ground Advertising spends may not always guarantee digital buzz The relationship between traditional media spend and advance bookings during car launches Source: Google Trends, TAM, Kotak Institutional Equities 0 20,000 40,000 60,000 80,000 100,000 0 20 40 60 80 100 Maruti S-Cross Hyundai Creta Hyundai Xcent Indexed Google search share Advertisingspends(Rs.'000) Notes: (a) Advertising spends are based on TAM estimates of TV and Print spends during launch week. NO linear relationship
- 31. Consumer Querimetrix • Identifies proxy indicators • Delivers on-ground insights • Nowcasts to stay ahead of the herd • Catches inflection points earlier • Derives business insights using digital footprints
- 32. Consumer Querimetrix • Identifies proxy indicators • Delivers on-ground insights • Nowcasts to stay ahead of the herd • Catches inflection points earlier • Derives business insights using digital footprints
- 33. Querimetrix—nowcasting Querimetrix nowcasts ~195,00 passenger car sales in January Consumer Querimetrix nowcasts of total passenger car sales, 2009-16 (units) Source: SIAM, Kotak Institutional Equities 0 50,000 100,000 150,000 200,000 250,000 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Total passenger cars (units) Passenger car sales nowcasts (units) 23% Reduction in prediction error (MAE) over traditional models performs better near Inflection points
- 34. Consumer Querimetrix • Identifies proxy indicators • Delivers on-ground insights • Nowcasts to stay ahead of the herd • Catches inflection points earlier • Derives business insights using digital footprints
- 35. Querimetrix—Business insights 1 3 2 1. Evaluation 2. Car loans 3. Car exchange
- 36. Car finance—moves up the ladder Car loan searches and car comparisons happening simultaneously Google Correlate results for the keyword 'car loan' in India and US, 2004-15 Source: Google Correlate, Kotak Institutional Equities • More loans to be sourced directly Loan origination costs may come down • Dealer profitability may come down OEMs may need to increase incentive • Car financing can be a differentiator Captive financing can innovate Jan-04 Sep-04 May-05 Jan-06 Oct-06 Jun-07 Feb-08 Nov-08 Jul-09 Mar-10 Nov-10 Aug-11 Apr-12 Dec-12 Sep-13 May-14 Jan-15 car loan (IN) compare cars (IN) emi calculator (IN)
- 37. Used car markets—influencing car sales 1 1 +223% yoy growth in used car queries Online classifieds queries impede new car sales Trade-in an important retention strategy Online Substitute Entry-level car with a second-hand car
- 38. Evaluation—landscape gets competitive 0 20 40 60 80 100 120 2010 2015 Maruti Suzuki Hyundai Maruti Suzuki and Hyundai have both lost search-share since CY2010 Normalized query trends for Indian car OEMs, 2004-current Source: Google Trends, Kotak Institutional Equities All options are being evaluated
- 39. Evaluation—mindshare gets costlier Rising advertising spends indicate costlier mindshare Estimated ad spends per car sale for OEMs in India, 2012-2015 (Rs/car) Source: TAM, Kotak Institutional Equities 0 1,000 2,000 3,000 4,000 5,000 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2012 2013 2014 2015 Maruti Udyog Ltd Hyundai Motor India Ltd Honda Siel Cars India Ltd Total passenger cars Notes: (a) TAM data used for TV and Print advertising spends (discounted from rate card). (b) Advertising spends are divided over total car and utility vehicle sales. (c) TAM data available till August 31, 2015.
- 40. Quick take—Maruti Suzuki How has Maruti maintained market-share? Great strategy is what helped retain market-share
- 41. Relating search queries and car sales CAR SALES SEARCH QUERIES • More model searches (i10 & i20), more salesSIMPL E SIMPLER • More potential car buyers, more Maruti demand
- 43. Querimetrix: just warming up! 0 10 20 30 40 50 60 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Hero MotoCorp Bajaj Auto TVS Motor Company honda bikes Yamaha Motor Company Royal Enfield Two wheelers do not mean Bajaj and Hero anymore! Normalized 12-month rolling Google Trends for various two wheeler manufacturers Source: TAM, Kotak Institutional Equities
- 44. THANK YOU
- 45. Option 1 presents New Rules, NewTools!