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Do you ever look at your data and say, “huh?” The Unusual Statistical Phenomena of Simpson’s Paradox

November 2nd, 2021 Comments off

Sometimes when looking at the results from survey data, we see something that makes us say “huh?” or “that doesn’t look right”.  When the odd results persist after verifying the data were processed correctly (always a good practice), there is typically still a logical answer that can be uncovered after doing some digging.  Sometimes the answer lies with something that we will call “unusual statistical phenomena.”  This is part 1 of a series that will look at some of these interesting – or confounding – effects that do pop up now and then in real survey research data.

This time we will look at Simpson’s Paradox.  And we aren’t referring to the fact that Bart Simpson never seems to age while the rest of us do.  It is actually a phenomenon first described by the statistician Edward H. Simpson in 1951.

It’s easiest to understand this phenomenon through an example.  So, let’s say that we have two ads that have been on air, ad A and ad B.  In our tracking survey among adults 18 to 65, we will ask respondents if they recognize having seen each ad on air.  Earlier in the survey we ask Purchase Intent for the product which is featured in each of the two ads.  From these results, we will compare Top Box Purchase Intent among respondents who recognized each of the two ads.  The results in the table below show somewhat higher Top Box Purchase Intent for Ad A:

However, the client is also interested in seeing the results among each of two age groups: age 18 to 39 and age 40 to 65.  When we table those results, we find something that just doesn’t make sense.  Purchase Intent is slightly higher for Ad B among both age groups – a reversal from the overall results.  How can that be!

After verifying with data processing that the data are correct, we have our team dig into the data to figure out what is going on.  Finally, an explanation is found.

Ad B was aired heavily among programming targeted to a younger audience, while Ad A was primarily aired in general interest programming – which skews to a slightly older audience.  Hence Ad B had much higher recognition among the younger age group – and as a result, a much higher proportion of young people in the set of respondents among whom purchase intent was calculated.

The table of base sizes shown below reveals this imbalance. When combined with the younger age group’s more skeptical nature (and lower results) when it comes to Purchase Intent – especially in our category – the apparent anomaly is explained.

This is an example of Simpson’s Paradox.  It is a phenomenon in which individual subgroups all show the same trend in results, but the trend reverses when the subgroups are combined.  This occurs when there is a confounding variable that causes an imbalance in base sizes such as we saw above.  In our example, the confounding variable was the differing recognition levels for the ads among the two age groups.

Simpson’s paradox shows us the importance of knowing and understanding our data and keeping a watch out for the kind of confounding factors that could end up misleading us if we don’t account for them.

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Streaming Services Deep Dive… | The Brand Strength Monitor / RDE Chart of the Week | Pre/Post Pandemic Penetration and Usage

June 22nd, 2021 Comments off

In our last Chart of the Week we started looking at the Subscription Video Streaming Services category and specifically the pandemic winner – HBO Max.  This week we’re taking a deep dive and examining the Pre/Post Pandemic Penetration and Usage by demographics.

The MSW TBSM tracking service measures category penetration and level of usage as one component of the survey.  A comparison of results taken before the beginning of the pandemic to a comparable assessment from May 2021 reveals explosive growth in the Subscription Streaming Video Services category.

  • Overall, category penetration increased from 75.4% to 86.6%, which represents a 15% increase.  Moreover, claimed heavy usage increased by over half during the pandemic, from 18.5% before the outbreak to 29.2% in May 2021.  Clearly, as a result of spending much more time at home during the pandemic, people were turning to video entertainment.

 

  • Those demographic groups which have seen particularly large gains include:
    • Women, with heavy usage of streaming video services more than doubling.
    • Age 55 Plus, which had the lowest pre-pandemic penetration, but closed the gap substantially, reaching penetration of 70% in the latest reading.
    • Below Median Income, clearly also looking for entertainment options and perhaps enticed by some of the newer services, particularly lower cost “basic” plans.

 

  • Clearly these results are consistent with the surge in subscription levels reported by the major subscription streaming video services for 2020:
    • Netflix added 37 million new subscribers worldwide in 2020 – easily the largest annual increase since expanding into video streaming 14 years ago.
    • Hulu added 9 million new subscriptions, a 29.6% year-over-year increase.
    • While Disney+ debuted with very strong numbers pre-pandemic, growth continued to surge through the pandemic. The service hit 100 million subscribers in March 2021; a remarkable feat for a service just over a year old which initially hoped to reach 60 to 90 million subscribers by 2024.
    • At the end of the first quarter of 2021, HBO and HBO Max totaled 44.2 million domestic subscribers – far exceeding the 33.1 million subscribers a year ago (before HBO Max).

 

While subscriber growth is seen to be slowing with the easing of the pandemic, it is clear the pandemic accelerated the trend toward the use of streaming services, particularly among those groups which had been slower to adopt the technology.

 

| The Brand Strength Monitor / RDE Chart of the Week | HBO MAX: Pandemic Winner

June 9th, 2021 Comments off

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. The RDE composite strongly relates to – and helps explain – CCPreference which itself is a validated predictor of market share.

Comparing RDE Assessment taken before the pandemic to comparable assessment from May 2021 reveals one brand in the Subscription Video Streaming Services category that has emerged as a winner – HBO Max.

  • HBO Max was launched in May 2020 well after the COVID pandemic was underway. It essentially replaced the previous HBO streaming service, HBO Now, but with a huge amount of new content from a variety of WarnerMedia brands.
  • Despite RDE levels being generally depressed as a result of the pandemic, HBO Max RDE levels easily surpass HBO Now pre-pandemic levels.
    • HBO Max easily outstrips HBO Now on all three RDE dimensions.
    • HBO Max is particularly strong in terms of relevance meaning that SVOD consumers feel that the HBO Max service is for someone like them.

  • HBO Max also far exceeds HBO Now in terms of CCPreference – the percent of consumers preferring HBO Max over competitors in the subscription streaming services category. This suggests that HBO Max should be performing well in the marketplace. How has it done?
  • HBO Max’s strength is its large and varied TV and movie catalog. In addition, Warner Brothers has been releasing its 2021 movies on HBO Max simultaneous with the theatrical release which has proven very popular.
    • At the end of the first quarter of 2021, HBO and HBO Max totaled 44.2 million domestic subscribers – far exceeding the 33.1 million subscribers a year ago (before HBO Max).
    • A report from Reelgood indicated HBO’s share of streaming activity rose from 2.0% in Q1 of 2020 (pre-HBO Max) to 12% in Q4 2020, placing HBO Max ahead of Disney+ and behind only Netflix, Prime Video and Hulu.
  • This success – mirrored by extremely strong CCPreference growth – has come despite a soft launch which slowly added support for many popular streaming devices, the COVID pandemic and accompanying economic downturn, and ever-increasing competition in the streaming video space.

The RDE composite is strongly related to brand preference in this category, with a correlation of 0.96