Compete, Inc.'s Latest Spark! Advisory Sheds Important Light on Automotive Incentive Efficiency Phenomenon; First-Ever Study to Incorporate Vehicle Shopper Counts and Conversion Rates in Order to Quantify Incentive Effectiveness

BOSTON--Aug. 2, 20053, 2005--Compete, Inc., the leading predictive analytics firm, today announced the availability of its latest Spark! research advisory, "Paying More for Less: Conversion Efficiency and Effect of Incentive Spending". In this Spark! edition, Compete identified that higher incentives do not always convert more shoppers to buyers; conversion actually worsened for vehicles with over $5,000 in incentives. Additionally, incentive cost-effectiveness varies by vehicle type and brand.

Compete correlated incentives and the resulting shopper conversion rate for the first three months of 2005. The research identified two waves of peak incentive effectiveness: from zero to $1,000 and from $3,000 to $5,000. To highlight the opportunity in assessing incentive effectiveness at a more granular level, Compete quantified effectiveness by vehicle type and origin. The approach yields a powerful, new technique for automakers to compare the cost-effectiveness of incentives across their portfolios, focus incentive spend where it is the most cost-effective and find the most cost-effective mix of advertising and incentives to reach retail sales goals.

"Automakers continue to rely on increasing incentives to convert shoppers into buyers, but they have done so without an effective measure for incentive efficiency," said Lincoln Merrihew, managing director for Compete's automotive practice. "Incorporating the number of shoppers and conversion rates is the key for OEMs in being able to quantify incentive effectiveness. This scientific approach is being embraced by several automakers to help drive sales and better optimize incentive budgets."

Select findings from this edition of Spark! include:

-- There are two waves of incentive effectiveness. Incentives enhanced conversion when raised from zero to $1,000 and conversions peaked in the $3,000 to $5,000 range. Above $5,000, conversion rates decreased.

-- Incentives on trucks are 22 percent more efficient in driving conversion than on cars. Incentives in the $1,000 to $2,000 range produced a 10 percent conversion rate for cars and 14 percent for trucks (or 46 percent better for trucks). For cars, the peak incentive effectiveness was in the $3,000 to $4000 range, with no gain in conversion above that level.

-- Import brand vehicles faired best. Compete identified incentive cost effectiveness at the vehicle level based on dollars spent per conversion achieved. All of the top 10 most cost-effective conversion vehicles were import brands.

Spark! is a research series providing brands with the insight and information they need to better target consumers and enhance overall marketing effectiveness. It reports the latest research, trends and data impacting the financial services, wireless, travel and automotive industries.

For a copy of the full advisory, e-mail press@compete.com.

About Compete

Compete provides the earliest indication of actual consumer behavior available, which gives clients the information needed to improve the effectiveness of customer acquisition, servicing, cross-sell and retention. Compete has proven that online data on consumer behavior is a predictive indicator of total demand and purchase intent - both offline and online. Compete leverages its database of the daily behavior of more than 10 million online consumers to offer predictive analytics, which Compete's industry experts interpret to provide clear recommendations for action. Since launching its services Compete has provided major auto manufacturers, financial services companies and wireless carriers with a unique vantage point on their customers and competitors not previously available. For more information visit http://www.compete.com.