Mark Ritson wrote an article for Marketing Week titled It’s time for ‘share of search’ to replace ‘share of voice’ (Sept 24, 2020).
« Share of voice is a key metric for setting budgets and predicting growth, but digital media make it impossible to calculate accurately. Understanding your share of search queries is a simple and elegant alternative. »
Share of Voice
James Peckham had a 43-year career at AC Nielsen. « Peckham’s Formula posits that when you launch a brand you should set its advertising budget based on your desired share of market. Specifically, your initial share of voice should be 1.5 times the desired market share you want to achieve by the end of the brand’s second year. »
« Peckham spent almost 20 years studying the relationship between what grocery brands spent on marketing communications and the subsequent market share they achieved. And, as such, Peckham was the first marketer to connect the dots between a brand’s share of voice and its share of market in a formal, prescriptive way. »
« The final major piece in the SOV/SOM puzzle came from Peter Field and Les Binet. The duo might now be famous for The Long and Short of It, but over a decade ago their work was also instrumental in showing an equilibrium between a brand’s share of voice and its share of market. More importantly, it was Field and Binet who also established the idea that a brand achieves excess share of voice (positive ESOV) if its share of voice significantly exceeds its share of market. And that excess was then shown to result in market share growth, gradually over time, if it was maintained. »
« caveats… For starters, most of this work was done in the relatively stable and predictable world of FMCG and might not apply quite as well or as easily to other corners of the marketing universe. It is also important to realise that the actual amount spent on advertising is merely one variable in a phalanx of inputs that lead to overall effectiveness. Budgets can only tell us so much and they often obscure other crucial strategic and tactical questions. Were the ads any good? Was the media selected appropriately? Was the strategy correct? And – lest we forget – was the brand shit? But the big practical caveat behind all of this work is access to the communications data. »
« First, you have to identify who is also actually playing in the category. That is not as easy as it sounds… It is essential marketers get this point. Competition is not up to them; like everything else in marketing, it is ultimately decided on by the consumer. And the competitor that kills you is inevitably the one you did not see coming because you were too busy working on your category to see them attacking you via your blind spot. »
Share of Search
« If we apply the idea of ESOV to search and call it ESOS – excess share of search – we could incorporate those different category relativities and the impact of brand size too. Your brand has a 15% market share but enjoyed 30% of the total search frequency last month. Congratulations, you have +15 ESOS and we know that translates into X% of market share growth in your category per year. »
Related: James Hankins wrote a blog post on share of search seven weeks prior to Ritson’s article (August 7, 2020).
“And why is Share of Search (SoS) important? Its because its an accurate proxy for Share of Market (SoM)”
Ritson does a good job of identifying problems with executing the SOV/SOM model.
But, I agree with James Hankins. SOS is more logically a proxy for SOM (market share) than a proxy for SOV.