Brand Metrics as Early Warning

Marketing AnalyticsSrinivasan, S.; Vanhuele, M.; Pauwels, K. · 2010Journal of Marketing ResearchEvidence: 62 brands analyzed (of 74) across 4 FMCG categories; 96 four-weekly observations per brand, Jan 1999-May 2006
Topicsmind-set metrics·brand consideration·advertising awareness·brand liking·sales response models·leading indicators·brand tracking

Imagine finance puts the brand tracker on this year's cut list because it sees no connection to sales. The evidence shows that brand metrics add sales information beyond the marketing mix. Their strongest link with sales comes later than the links for price and promotion. That timing supports testing the tracker as an early-warning system before cutting it.

Brand metrics add sales information beyond the marketing mix.

Data chart

How the model attributes variation in brand sales

Share of the variation in brand sales over six months that the model traces to each source, in percent (the five shares add up to 100).

47%23%14%Past buying habit (purchase inertia) —47%The brand's own marketing mix — 23%Competitors' marketing mix — 14%The brand's own brand metrics — 8%Competitors' brand metrics — 8%
  • A brand's own and its competitors' brand metrics account for about 16%.

A brand's own and its competitors' brand metrics together account for about 16% of the variation in brand sales.

Share of the variation in brand sales over six months, averaged across 62 established consumer-goods brands, France, 1999-2006; exact values 46.8%, 23.1%, 13.8%, 8.4% and 7.9% in the order shown, and 16.3% for the two brand-metric shares combined. Once past buying habit is set aside, brand metrics account for almost one-third of what the other sources explain.

Data chart

Brand metrics reach their strongest sales link later than price and promotion

Average months from a change in each lever or brand metric until its effect on sales peaks (62 brands).

Advertising awareness (brand metric)2.32 monthsConsideration (brand metric)2.23 monthsDistribution (marketing lever)2.12 monthsLiking (brand metric)2.00 monthsAdvertising (marketing lever)1.83 monthsPrice (marketing lever)1.59 monthsPromotion (marketing lever)1.02 months
  • Consideration peaks later than price and promotion, leaving time to respond.

Brand metrics reach their strongest link with sales after 2.00 to 2.32 months, compared with 1.02 months for promotion and 1.59 months for price.

Average months from a change in each measure to its strongest link with sales, 62 established French consumer-goods brands, 1999-2006; means only, as the paper reports no spread.

Action guide

  1. Require response plans for consideration and liking declines.For a consideration decline, ask insights and brand teams for price or promotion options, since their sales effects build fastest. For a liking decline, ask for advertising weight and copy options; advertising spending has the smallest link with liking of any lever. The study proposes, but does not test, these responses.
  2. Keep brand metrics in sales forecasting.Ask analytics to include advertising awareness, consideration, and liking alongside the marketing mix and document the model specification.
  3. Before stopping a marketing action that looks ineffective, give its effect time to build.Promotion and price effects on sales build fastest, then advertising, then distribution.
  4. Track competitors' brand metrics alongside your own.Ask insights to deliver the same three measures for major competitors because their association with sales is nearly as large.
  5. Protect distribution coverage for established consumer-goods brands.If your sales data confirm distribution has the strongest link with sales, have brand and trade teams flag planned coverage losses.

Evidence

  • Brand metrics reach their strongest link with sales after 2.00 to 2.32 months, compared with 1.02 months for promotion and 1.59 months for price.
  • With advertising awareness, consideration, and liking included, the average adjusted share of sales variation explained is .61, versus .53 with the marketing mix alone.
  • A brand's own and its competitors' brand metrics together account for about 16% of the variation in brand sales, beyond price, promotion, distribution, and advertising. Competitors' brand metrics account for about 8%, nearly as much as a brand's own.
  • Distribution has the strongest link with sales among the four marketing levers and the strongest link with all three brand metrics. After distribution, advertising has the strongest link with advertising awareness and promotion with consideration, while a price increase is linked with lower liking.

Key takeaway

Brand metrics add sales information beyond the marketing mix and can give earlier warning of later sales changes.

Limitations

The study tracks established brands in four French packaged-goods categories from 1999 to 2006. It finds links between brand metrics and later sales, not proof that the metrics caused the sales changes, and it does not measure the financial return of tracking.

Source

Srinivasan, S., Vanhuele, M., & Pauwels, K. (2010). Mind-set metrics in market response models: An integrative approach. Journal of Marketing Research, 47(4), 672–684.

https://doi.org/10.1509/jmkr.47.4.672

Exact values behind the rounded figures: 16.3% of the variation in brand sales for a brand's own and its competitors' brand metrics combined, 8.4% for a brand's own and 7.9% for competitors'; 46.8% for past buying habit, 23.1% for the brand's own marketing mix and 13.8% for competitors' marketing mix.

Read the paper ↗

Same study, another angle

Which Marketing Levers Move Sales Most?For mature consumer-goods brands, distribution is linked to the largest sales response among the four marketing levers.Read this translation →