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Independent Audit Confirms MSW-ARS TouchPoint® Copy Test System’s Powerful Linkage to Financial Performance

February 20th, 2018 Comments off

Last week the Marketing Accountability Standards Board (MASB) announced that TouchPoint®, MSW-ARS’s advertising copy test solution, has completed the Marketing Metric Audit Protocol (MMAP) – MASB’s formal process for validating the relationship between a marketing measurement and financial performance.

TouchPoint uses a behavioral, multi-media experience to collect the criterion CCPersuasion® metric. This unique approach avoids common pitfalls, such as cooperation bias, of more direct approaches and thus allows for a more meaningful measurement of consumer preferences.  In fact, CCPersuasion utilizes the patented CCPreference® system (also successfully audited by MASB) as its foundation.  The TouchPoint system is flexible enough to measure individual ads as well as full multi-execution campaigns across a wide variety of media types, and integrates extensive diagnostic feedback demonstrated in the audit to have a strong track record in helping to improve the effectiveness of tested copy.

In the MMAP audit, the CCPersuasion metric was assessed against the MMAP ten characteristics of an ideal metric, as well as MASB’s guidelines for measures of marketing productivity.

Most vitally, the audit requires metrics to substantiate a specific link to financial performance. Regarding the TouchPoint system, 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.  This is based on a wealth of information collected over many years proving the predictive validity of the CCPersuasion metric.

Specifically, the audit indicates that the CCPersuasion measure predicts TV advertising’s impact on market results at ~0.90 correlation level when the effect of the ad is isolated from the other elements of the marketing mix. One published study that substantiates this conclusion relates the predicted sales volume impacted by advertising to the actual sales volume impacted from independent Marketing Mix Modeling analysis:

 

What does this mean for advertisers? Well, there are a number of different aspects of the TouchPoint system that have been demonstrated to help improve advertising’s Return on Investment.

On the most basic level, an advertising copy test system is used to qualify specific executions for airing or is applied upstream to determine which initiatives should precede for further development. Since TouchPoint uses a criterion measure strongly related to sales impact, advertisers can have confidence that these decisions will be made on the basis of improving advertising’s return.  TouchPoint takes this a step further by providing the Fair Share® benchmark, a unique modeled norm that is superior to traditional normative approaches.  Fair Share represents an estimate of the sales effectiveness, in terms of CCPersuasion level, for a typical ad for the advertised brand, given the category environment and the brand’s position in that environment.

In addition to giving a meaninfgul go/no-go indication on copy, the magnitude validation of the CCPersuasion metric allows for a forecast of an ad’s expected impact when aired. This is implemented through use of an easy to use elasticity grid which sets expectations based on the CCPersuasion level.

 

 

In addition, MSW-ARS has decades of experience researching and publishing on the topic of advertising wearout. By marrying the findings of validation studies with these wearout learnings, we developed the patented Outlook® media planner.   The Outlook planner, which has been cited in numerous award winning case studies, enables brands to forecast sales impact, plan the number of executions needed to meet business objectives, and allocate media spend among multiple tested executions so as to optimize return on advertising investment.

 

 

The TouchPoint system is also capable of assessing early stage stimuli using the same validated methodology to raise the odds of success before costly development on specific executions has begun. This is demonstrated through a study linking the test results of early stage video value propositions with the CCPersuasion levels of finished executions developed from these propositions.  The results show that ads based on strong value propositions are much more likely to perform above benchmark at the finished execution stage.

 

 

As noted earlier, the TouchPoint system incorporates extensive diagnostics that have been shown to significantly relate to the criterion CCPersuasion measure and which have been shown to provide guidance for improving the effectiveness of tested copy. This diagnostic learning is also key in helping brands understand what is working and how it can best be deployed.  The potential for improvement fueled by validated diagnostic feedback over the course of time is illustrated by a four year case study in which a global MSW-ARS client was able to improve both qualification rate and average CCPersuasion level year-over-year for each year of the study.

 

 

Finally, it should be noted that CCPreference, the foundation of TouchPoint’s CCPersuasion metric, is a common metric running throughout the range of MSW-ARS solutions from early stage creative development through copy testing and creative and brand health tracking. This provides marketers with a unique ability to better connect research from one stage of the advertising process to the next, avoiding potential outages that can occur when attempting to move between different stages in the research process which are assessed using different systems and metrics.

 

 

To learn more about the TouchPoint copy test system, it’s performance on the MMAP audit and how it can help improve your brand’s financial return from advertising, please contact us at aklein@mswarsresearch.com.

 

When it comes to extending your brand, gaining awareness is less than half the battle

July 26th, 2016 Comments off

In previous blogs we have commented on the validity and practicality of applying the MASB Brand Investment and Valuation model.  In those articles we focused on the value the brand derives from cash flows from existing offerings.  But what about potential future cash flows from planned brand extensions not yet launched – both within existing categories and into new categories?  Can the model be successfully applied to those cases?

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The answer is a resounding yes!  All that is required is a measurement of brand strength for the extension before it launches.  Traditionally this has been tried by measuring brand recall among a group of consumers exposed to either launch copy (if available) or a video concept and using this and expected media support to project awareness.  While it is possible to accurately project awareness levels in this way, ATU validation studies show this provides only a partial answer as brand awareness explains only about 40% of the variance in trial rates (correlation of 0.65).  In essence, just because a consumer is aware of a brand doesn’t mean she will try it.

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However, using the MSW•ARS system it is possible to also gather brand preference before launch.  When awareness is multiplied by brand preference, the relationship improves with approximately 90% of the variance being explained (correlation of 0.94).

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Please contact your MSW●ARS representative to learn more about how our brand preference approach has been integrated across our entire suite of solutions.

Categories: MASB, The Brand Strength Monitor Tags:

MASB’s Game Changing Brand Investment and Valuation Project – Part IV

November 30th, 2015 Comments off

In parts I, II, and III of this blog series we discussed the added benefits and technical details of incorporating brand preference throughout the brand building process.  During this time we have received numerous requests for more details with the most common being of the form, “Are brand preferences important for my category?”  Typically this question has come from brand stewards competing in categories where the products or services are either not bought on a recurring, individual basis, are not “bought” at all, or had dynamically changing competitive sets.  So we wanted to take a brief moment to reiterate the breadth of category representation designed into the MASB BIV project and to provide examples from published cases demonstrating the importance of brand preference in other category types.

The MASB-sponsored, multi-year longitudinal study was conducted with the cooperation of six blue chip corporations from a variety of industries including fast moving consumer goods, food, beverages, and autos.   Each of these participants chose two categories to be included.  The resulting twelve categories represented a wide variety of product types and market conditions.  Individual unit prices ranged from under one dollar to over thirty thousand dollars.  Some of the product categories lent themselves to spontaneous purchase while others required greater deliberation which could include third party influencers in the decision making process.  Some of the categories were highly fragmented while others had only a small number of competing brands.  Typical consumer purchase cycles could vary from a week to up to a decade.

Despite these category differences, brand preferences were shown to be the strongest predictor of individual brand unit share both across and within the twelve categories examined.

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Unit share was chosen as the dependent variable for two reasons.  One is that marketing is primarily focused on creating conscious (cognitive) and unconscious (affective) predispositions to choose the advertised brand over competitors.   So for a measure of brand strength to be relevant it must explain the percent of choices allocated to the brand.  The second, equally important reason is that for all of the categories included in the study units sold drive financial cash flow models.  By combining an estimate of a brand’s unit share of market at a given price point and cost of production with assumptions of future category size based on population and category penetration trends, a projection of cash flow can be made.  A discounted cash flow calculation can then be used to create a brand valuation.  Hence, explaining unit share for these categories is fundamental to brand valuation.

But there are other categories where the cash flows do not source from unit sales within a relatively stable competitive set.  For these categories the dependent variable changes but the role of brand preference remains the same.  Here are some examples drawn from previously published MSW•ARS studies.

Web Search Engines

In our first example the service isn’t bought at all!  When a person uses a search engine like Google or Bing they aren’t charged.  Rather the revenue stream comes primarily from advertising revenue from the searches conducted.  So the key variable to understand is the share of searches.

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Credit Card Networks

Credit card networks are similar to search engines as the users don’t purchase them.  Plus there is an added complication that the network (e.g. MasterCard, Visa, American Express, Discover) oftentimes shares the value proposition with partner brands in the cards issuance (e.g. financial institutions, retailers).   But even with this complication brand preference for the networks themselves plays a key role in determining their share of the cards in circulation.

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Restaurants and Retailers

For restaurants and retailers brand preference exerts itself in numbers of visitations and/or the amount purchased on each visit.  Collectively this translates into receipts for products acquired through each brand’s outlets.  The following graph shows the relationship between brand preferences for casual dining restaurants and their percent of receipts captured.

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Pharmaceuticals

Pharmaceutical brands are unique in that the ultimate decision of which to use is necessarily made in partnership with an expert, their doctor.  Still, patient brand preference plays an important role in the process as demonstrated by this meta-analysis comparing preferences for pharmaceutical brands for five afflictions to their corresponding share of prescriptions.

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Auto Insurance

Every subscription based service faces a moment-of-truth in which a customer’s decision to change to a competing service will likely lock the spurned brand out of that customer’s consideration for a period of time, sometimes several years.  This makes consistently maintaining brand preference critical not only for growing share but combatting churn, as demonstrated by this chart of auto insurance brands.

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Movie Box Office Openings

When it comes to movies, predicting opening weekend ticket sales is of paramount importance.  But this is difficult given the constantly changing theater environment – each week the mix of competitors changes with up to one half being entirely new!  As a meta-analysis covering one hundred fifty three movie releases shows, not only is brand preference the most important single element for determining a new release’s share of a weekend’s total box office receipts, but when combined with other elements can accurately project weekend gross well before the opening!

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Please contact your MSW●ARS representative to learn more about how our brand preference approach has been integrated across our entire suite of solutions.

Categories: MASB Tags: