Brand accounts for 40% of sales success, according to social listening data
Investing in brand versus investing in performance is a perennial debate – but what’s the point in debating if you can refer to facts instead? Brand measurement approaches based on online reactions close knowledge gaps, allow for more effective brand management and prove the importance of brand, says TD Reply’s Lars-Alexander Mayer.
Industry consensus says that today, brands are more important than ever. Meanwhile, many companies are realizing that they have been underestimating the role of brand building, favoring performance marketing instead. Why can it take years for companies to realize that brand building could be significantly more important (and performance less important) than they assume?
TD Reply on how brand managers can use established survey-based methods for brand measurement
It boils down to the fact that robust evidence relating to brand importance is often not available at the right time. Today, most marketers are simply not able to track and measure brand continuously, scientifically and quickly because conventional survey-based brand measurement methods (so-called ‘brand trackers’) are not fit for purpose. But that is what’s necessary to prove the contribution of brand activities to success.
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This is the crux of the ‘brand dilemma’ that brand managers are facing today. Everyone agrees that brands are important, but how can we prove exactly how important they are? And how can we translate that evidence into concrete actions?
Social listening data enables continuous and granular brand measurement
Common survey-based brand measurement methods are held back by insufficient frequency of data collection, insufficient granularity of data and lacking connection with scientific brand research – we looked into these difficulties in a recent white paper.
The solution lies in a brand measurement approach based not on surveys, but on online reactions tracked by social listening.
Online reactions – social media posts, search queries or forum contributions – are, unlike opinions expressed in surveys, unbiased and can be analyzed in real time. The effect of brand activities, like the opening of a flagship store or a brand campaign, become immediately measurable.
Online reactions are essentially the missing link between brand positioning and continuous brand activities, allowing to finally interlink brand management and brand measurement effectively and seamlessly.
Brand managers are empowered by gaining the ability to immediately uncover discrepancies between desired and actual effect, allowing for continuous optimization. Well, at least in theory – you still need a suitable conceptual framework to combine social listening with meaningful, scientifically-based brand measurement. None of the many social listening tools on the market can do this on their own. Monitoring online reactions is helpful, but not nearly enough.
Focus on brand drivers
It’s important to focus on identifying the most important brand drivers. According to Keller’s Customer-Based Brand Equity (CBBE) model, these are the most important, strongest, most beneficial and most unique brand associations. Specialized text mining tools can extract these from the content and tonality of online responses. Natural Language Processing (NLP) algorithms are used to interpret slang and context within online reactions. Identifying and continuously tracking brand drivers allows brand managers to strategically calibrate and control the delivery of messages. In this way, they can strengthen brand associations that improve the brand image vis-à-vis competition. In addition, it becomes clear who the main competitors are for certain brand associations (for example, ‘sustainability’ or ‘sportiness’). This facilitates positioning in new categories or markets, and the development of new customer segments.
From brand measurement to sales impact
Social listening data comes with the great advantage of being available as digital time series data. This means that consumer associations and reactions can be easily integrated into statistical sales models and related to hard sales and marketing metrics. Enriching sales models with this data reduces the proportion of unexplained purchase decisions to a minimum and makes sales effects quantifiable.
We used this trick to compare the sales effect of brands across different industries. The result: on average, brand explains 38% of all purchase decisions. For some industries, such as electronics and fashion, more than half of all purchase decisions can be attributed to the brand. In comparison, the average sales effect of advertising expenditure amounts to only 19%.
Statistically modeled effects of brand and media performance on realized sales across industries (in %). Based on data from TD Reply client projects in the period 2013-2020. Vertical arrow: reliance on brand or media effects per industry
The inclusion of digital consumer reactions, which are woefully neglected in today’s brand management, proves how big brands’ share in the success really is.
Brand managers who rely solely on established survey-based methods for brand measurement are leaving unused an important means to substantiate their own relevance. Employing innovative brand measurement approaches based on digital data, they could leverage the ‘hard’ facts only obtainable through these approaches, and in doing so be empowered to do what they do best: strengthen their brand.
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TD Reply is a marketing and innovation consultancy that drives change by merging data science and business expertise with creativity. Founded in 1999 at the Technical University of Berlin, we are now one of the world's leading specialists in the field of data-driven marketing and innovation. This is why we are trusted by global market leaders across a wide variety of industries, including automotive, consumer goods, and ICT. With China Beats, Pulse, and Sonar, we also offer a growing portfolio of AI-powered business intelligence solutions. At our locations in Berlin, Beijing, and Munich, around a hundred data scientists, creative strategists, futurologists, consultants and designers share a common vision: to explore the unexplored in our data-driven world.Find out more