Viewpoint: Measuring the right things

Les Binet and Peter Field

We live in an era of accountability. Everything must be measured so that we know whether we are making
progress and, more importantly, can prove to our bosses that we are doing so. We have a very successful and progressive market research industry that can supply all kinds of metrics to management teams to ensure that their brands are on track.

So how come most of us study the wrong measures?

Analysis of the 880 national case studies of the IPA effectiveness dataBANK (see Binet & Field 2007) suggests that most marketers are far too influenced by intermediate consumer measures, and not nearly enough by business and behavioural measures.

To a degree, this is inevitable: intermediate measures constitute the leading indicators that are a brand’s first signs of progress – market and behavioural effects usually take longer to come through. This would not matter if the leading indicators typically in use were more reliable indicators of subsequent business success. But the IPA data suggest they are not: big shifts in standout, awareness or image scores do not generally correlate with big shifts in market share or profitability. In fact, these measures are the ones that are least closely related to business success, yet form the most common basis for campaign evaluation.

This is reflected in the relationship between targets and business success. Brands that have clear business objectives (especially share or profit) significantly outperform those chasing intermediate objectives such as awareness. Worst performing of all are those brands that target single intermediate measures – especially standout, awareness or image.

This is hardly surprising – brands long since ceased to be such simple entities as ‘reminders of existence’. In the modern world they are highly complex, and the best ones are highly emotionally charged. It is logical to suppose that it would take many such metrics to begin to accurately measure a brand, in the same way that it takes many measures of human health to form a medical opinion. And this is in fact the case: the more measures that improve for a brand, the more reliable the indication of future business success. The relationship is a strikingly linear one. But the mantra of focus on single measures is not only pernicious but also persistent. It is time for a new approach.

Of course some companies are already doing what the IPA data suggest: measuring their brands against a basket of metrics and looking for aggregate movements, not single shifts. But they appear to be in the minority. Also some companies have tried backcorrelating their leading indicators with subsequent business performance to ensure they are reliable, but this is very rare indeed. When did you last see econometrics used to compare tracking study data with rate of sale, penetration or price elasticity? Yet these are exactly the kind of measures that really promote profitability for brands. It would appear that we fear to do so: it is just too tempting to keep chasing awareness. It gives us some impressive looking numbers. They keep the boss off our backs – until, that is, the business data come in …

Reference

Binet, L. & Field, P. (2007) Marketing in the Era of Accountability. Henley-on- Thames: WARC.

Les Binet is European director of DDB Matrix, DDB’s econometrics consultancy. He has won 13 IPA
Effectiveness Awards, more than anyone else in the history of the competition. He was Convenor of
Judges for the Awards in 2005.

Peter Field has been a marketing consultant for the last ten years. Prior to that he ran the account planning departments at Bates and Grey. He set up the IPA dataBANK in 1996 and was a judge of the Effectiveness Awards in 1998. He is an honorary Fellow of the IPA.

International Journal of Market Research 49(5), 2007

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