More than 100 years ago, John Wannamaker was famously quoted as saying: “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.”

Only half?

Fast forward 100 years, and many marketers still don’t know how much of their advertising is wasted. And with the myriad new methods for advertising (e.g., digital, social media, reviews, etc.), we’d be lucky if we are only wasting half our money. John Wannamaker would be horrified!

That is why it is so critically important for marketers to use validated, sales predictive metrics when evaluating advertising. Validation means that the metric predicts real, in-market behavior: brand preference, sales, share lift, revenue, and loyalty. Advertisers who do not use market proven validated metrics risk wasting significant resources both in advertising expenditure and in the health of their brand.

Validation Obsession

MSW is obsessed with validation and has been for decades. As far back as the 1970’s, MSW began testing their fundamental metrics for predictability. Since then, MSW’s validation efforts have been continuous and rigorous, including cross-client analysis, client sponsored independent studies, publishing in academic journals, and independent industry trade group audits. Here are a few examples regarding MSW’s CCPersuasion metric (which measures a pre-to-post change in brand preference as the result of advertising):

• L’Oreal: BBDO’s conducted an independent analysis for three L’Oreal brands: Preference, Excellence, and Revitalift. Their analysis concluded that MSW metrics strongly validated with advertising in-market performance. And as determined by L’Oreal a one-point increase in CCPersuasion yielded a 0.6% lift in retail sales. The analysis also determined that as CCPersuasion increased versus the norm, so did Annualized Customer Value (ACV) with a top 10% television ad resulting in an increase of ACV of $42.5 million.
• Celestial Seasonings: Celestial Seasonings evaluated five selling propositions, moving forward with the strongest which measured CCPersuasion significantly above Fair Share. The brand went to air with an ad that outstripped even that superior selling proposition. “. . . Our advertising didn’t just steal share from competitors; it grew the herbal tea category. While tonnage for most other hot beverages was declining during this time period, herbal tea sales were up, with increases as high as 12 percent in one of the spot television markets,” said VP Marketing Mike Mondello.
• StarKist Tuna in a Pouch: Our research suggested increased emphasis on the “fresher and better taste” product benefit could improve effectiveness. In fact, the finished execution scored 2.5-times the benchmark. “The results from the initial advertising quarter yielded an ROI of 76 percent, an enormous improvement over the break-even ROI we had expected for the quarter using a traditional approach,” reported Barry Shepard, StarKist.
• Walmart: Walmart compared the incremental sales generated (from MSW’s Marketing Mix Modeling) by a specific television ad to the CCPersuasion points delivered (the CCPersuasion score combined with media weight) for that ad. The strong relationship (r = 0.82) confirms CCPersuasion measure is a valid predicter of the sales effectiveness for advertising for Walmart.

CC Persuasion Audit Summary

A combination of industry, agency, and academic leaders created the Marketing Accountability Standards Board (MASB) to ensure“ the efficient and effective functioning of a marketing-driven business because decisions about the allocation of resources rely heavily on credible, valid, transparent, and understandable information.” MASB then established their Marketing Metric Audit Protocol (MMAP) to validate whether marketing and advertising research metrics accurately measure and predict the market behavior they purport to predict.

MASB conducted an 18-month study across 12 product categories and 120 brands, comparing MSW’s CCPersuasion metric to Unit Share. Not only did MASB confirm the strong relationship between CCPersusion and Unit Share (r = 0.88), but it also found that accounting for price and distribution improved the relationship to an almost unheard of 0.94. The MMAP audit concluded that “the CCPersuasion metric is able to quantify the likelihood and magnitude of an ad’s impact on future sales volume and market share.” MASB also concluded CCPreference has been “proven to reflect market share with a high degree of accuracy across a spectrum of diverse categories.”

Summary

As Gayle Fuguitt, former President and CEO of The Advertising Research Foundation summarized, “It is the most complex time in the history of advertising, yet the C-suite questions are simple:

• “Do my marketing dollars drive growth and sales?”
• “Where do I spend the next marketing dollars?”

MASB’s work, focused on the accurate and comparable measurement of marketing efforts, is advancing the industry to respond to these C-suite needs and to drive much needed growth.”

However, MSW is not resting on their laurels. Their validation obsession drives them to continually evaluate and test their metrics to ensure in-market predictability.

Does your advertising drive business results? Do your advertising metrics accurately predict success? Not sure? Contact us today 

MSW’s RDE Analytic Framework rests on a study that found that three equity dimensions (Relevance, Differentiation, Emotion) are responsible for driving a significant portion of brand growth. Our Chart of the Week is dedicated to sharing RDE results for a variety of categories.  If you have questions about your category – give us a call.

RDE Assessment among 500 men and women for eight major brands in the Automobile Insurance category led to the following insights:

RDE Assessment among 500 men and women for eight major brands in the Automobile Insurance category led to the following insights:

• Almost all brands score highest on the emotion dimension, perhaps because the category is heavily advertised with often whimsical copy that is light on functional details but seemingly designed to build an emotional connection with viewers.

• Market leader State Farm is unsurprisingly viewed as most relevant, with this position driven more by emotional connection (after all, who doesn’t want a Good Neighbor) than differentiation.

• USAA is the one brand where differentiation is strongest of the three RDE dimensions, perhaps due to the brand offering its services to past and present members of the Armed Forces.

• In addition, those choosing USAA in brand preference collection had by far the fastest reaction times, revealing a very high degree of certainty among those preferring USAA.

• The smallest brands, Liberty Mutual and Farmers, demonstrate by far the largest gap between emotion and relevance (the RDE dimension most strongly related to preference and market share).  These heavily advertised brands have succeeded in emotionally engaging consumers with the hope of being top-of-mind when purchase decisions are made in this high loyalty/low involvement category.

• The RDE composite is strongly correlated to brand preference in this category.  AAA is something of an exception, with relatively lower preference.  This is likely due to AAA being known foremost for Automotive and Travel Services with automobile insurance only offered through some AAA Affiliates.

MSW’s RDE Analytic Framework rests on a study that found that three equity dimensions (Relevance, Differentiation, Emotion) are responsible for driving a significant portion of brand growth.  In the coming weeks our Chart of The Week will be dedicated to sharing RDE results for a variety of categories.  If you have questions about your category – give us a call.

RDE Assessment among men and women for eight major brands in the Athletic Shoe category led to the following observations:

• As the runaway category leader, Nike easily outstrips the competition in terms of Relevance.  It’s lead in terms of Differentiation and Emotion is considerably less.

• Sketchers most closely challenges Nike in terms of Differentiation and Emotion, and in fact surpasses Nike on those dimensions among women.

• While among the lowest in relevance, Jordan is very strong in Differentiation compared to other competitors of a similar size.

• Puma is lowest on all three dimensions and is especially weak among women.

• And overall the RDE Composite scores for these 8 brands in the category correlate to MSW’s CCPreference at an extremely high .96, proving the connection between these measures and the predictive nature of both.