Category: Metrics

with Raoul V. Kübler and Kai S. Manke, July, 2020

Abstract:

To what extent did external events and news versus the candidates’ own actions drive the 2016 election outcome? And were candidates misled if they focused on traditional market research versus the newer probabilistics polls? Based on the dynamic political will formation framework, the authors address these questions with a national daily dataset combining polling, donations, and TV advertising data with social media interactions to all candidates’ posts of the two candidates on Twitter, Facebook, and Instagram. Persistence modeling reveals that donations followed rather than drove the candidates’ polls. The probabilistic polls show a different impact of candidate ads and statements, news coverage, and fake news than do the traditional polls. TV ads on the economy or gun control, and on terror threats were most effective for respectively Hillary Clinton and Donald Trump. Topics matter, as fake news about a candidate hurts her chances on one topic, but benefits her on another topic. Moreover, platforms matter: Clinton’s chances benefitted from promoting women issues on Instagram, but declined from doing so on Twitter. Her moral language on Fairness Vice and social media users’ on Authority Virtue made voters less likely to vote for her, but more likely to share fake news about her and to talk positively about Trump. While news coverage had minimal impact, fake news on Clinton’s emails, shared on her Facebook page, greatly damaged her election chances. This fake news impact was most pronounced for seniors, Hispanics and high earners – demographics who moved towards Trump in the last weeks before the election. The authors draw lessons from the past election to advise where, when and how to drive the political conversation.

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with Bernadette van Ewijk, Journal of Interactive Marketing

Full Article

Abstract:
Consumers leave traces of key interest to managers on their journey to purchase. Next to traditional survey-based attitudes, readily available online metrics now show aggregate consumer actions. But how do survey response metrics and online action metrics relate to each other? To what extent do they explain and predict brand sales across consumer categories? This article shows that surveys and online behavior provide complementary information for brand managers. Times series data for 32 brands in 14 categories reveal low correlations but substantial dual causality between survey metrics and online actions. Combining both types of metrics greatly increases the model’s power to explain and predict brand sales in low-involvement categories. By contrast, high-involvement categories do not gain much from adding survey-based attitudes to a model including online behavior metrics. The authors synthesize these generalizations in a new framework relating enduring attitudes to the contextual interest expressed by online actions. This new framework helps managers assess both types of metrics to drive brand performance depending on whether their goal is short-term sales or long-term brand health.

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International Journal of Market Research, with Lia Zarantonello and Marcello Formisano

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Abstract:
What does it take to grow a brand? How to avoid its decline? Some popular answers to these questions can be found in the research by Byron Sharp and others from the Ehrenberg-Bass (EB) Institute on “how brands grow.” In this article, we propose that such an approach, despite its strengths, lends itself to some limitations when taken too literally. We maintain that a broader notion and role of branding—encompassing brand equity, brand portfolio, and circular relationship of attitudes and behaviors—should be adopted by marketeers to derive better managerial implications for sustainable brand growth. We, therefore, invite marketers to not oversimplify Dirichlet evidences by thinking of availability as the only (costly) response to all marketing challenges

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with Dominique M. Hanssens, Journal of Marketing, 80 (6), 2016,173-190.

Full article

Summary
Marketing departments are under increased pressure to demonstrate their economic value to the firm. This challenge is exacerbated by the fact that marketing uses attitudinal (e.g., brand awareness), behavioral (e.g., brand loyalty), and financial (e.g., sales revenue) performance metrics, which do not correlate highly with each other. Thus, one metric could view marketing initiatives as successful, whereas another could interpret them as a waste of resources. The resulting ambiguity has several consequences for marketing practice. Among these are that the scope and objectives of marketing differ widely across organizations. There is confusion about the difference between marketing effectiveness and efficiency. Hard and soft metrics and offline and online metrics are typically not integrated. The two dominant tools for
marketing impact assessment, response models, and experiments, are rarely combined. Risk in marketing planning and execution receives little consideration, and analytic insights are not communicated effectively to drive decisions. The authors first examine how these factors affect both research and practice. They then discuss how the use of marketing analytics can improve marketing decision making at different levels of the organization. The authors identify gaps in marketing’s knowledge base that set the stage for further research and enhanced practice in demonstrating marketing’s
value.

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GfK-Marketing Intelligence Review, 7(1), Editorial and pages 8-15, 2015

Short Article

Abstract:
A recent study by researchers Germann, Lilien and Rangaswamy showed that companies who deploy marketing analytics obtain 21 % more Return on Assets (ROA) in competitive industries. Unfortunately, few companies appear able to deliver on this promise. In the absence of smarter organic growth, they tend to focus on mergers and acquisitions, which yield high risk and questionable returns (as detailed in Donald Lehmann’s article, p. 16). Marketing accountability is essential for sustained organic growth, but the challenges to it loom large. In my experience across categories and continents, the major steps in truly accountable marketing include defining the right results, using the right metrics and finally acting on the collected insights. As Peter Drucker put it back in 1967, “The question we must ask is not, ‘How many figures can I get?’ but ‘What figures do I need? In what form? When and how?’ We must refuse to look at anything else.”

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with Dominique M. Hanssens, Shuba Srinivasan, Marc Vanhuele and Gokhan Yildirim, Marketing Science, 33 (4), July-August, 2014, 534-550

Full Article

Abstract:
Marketing managers often use consumer attitude metrics such as awareness, consideration, and preference as performance indicators because they represent their brand’s health and are readily connected to marketing activity. However, this does not mean that financially focused executives know how such metrics translate into sales performance, which would allow them to make beneficial marketing mix decisions. We propose four criteria—potential, responsiveness, stickiness, and sales conversion—that determine the connection between marketing actions, attitudinal metrics, and sales outcomes.

We test our approach with a rich data set of four-weekly marketing actions, attitude metrics, and sales for several consumer brands in four categories over a seven-year period. The results quantify how marketing actions affect sales performance through their differential impact on attitudinal metrics, as captured by our proposed criteria. We find that marketing–attitude and attitude–sales relationships are predominantly stable over time but differ substantially across brands and product categories. We also establish that combining marketing and attitudinal metrics criteria improves the prediction of brand sales performance, often substantially so. Based on these insights, we provide specific recommendations on improving the marketing mix for different brands, and we validate them in a holdout sample. For managers and researchers alike, our criteria offer a verifiable explanation for differences in marketing elasticities and an actionable connection between marketing and financial performance metrics.

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with Selin Erguncu and Gokhan Yildirim, International Journal of Research in Marketing, 30 (1), 57-68, 2013.

Full Article

Abstract:
Consumers differ in the way their minds and hearts respond to marketing communication. Recent research has quantified effectiveness criteria of mindset metrics, such as brand consideration and liking, in the pur-
chase process for a mature market. This paper develops and illustrates our conceptual framework of how mindset effectiveness differs between an emerging market and a mature market. We propose that the re-
sponsiveness, stickiness and sales conversion of mindset metrics depend on the regulative, cultural and economic systems that provide structure to society. In particular, we focus on regulative protection, collectivism and income. First, we propose that a lack of regulative protection leads consumers to be more attentive to, and thus more aware of, marketing communication. Second, we propose that consumers living in a collectivist culture are less responsive to advertising in their consideration and liking of the advertised brand. Finally, we propose that lower income among consumers reduces the sales conversion of brand liking. We examine our predictions empirically with data for the same brands during the same time period in Brazil and the United Kingdom. First, we find that brand liking has a higher responsiveness to advertising, a higher stickiness and a higher sales conversion in the U.K. than it does in Brazil. Thus, the advice to focus on the emotional brand connection is more appropriate in the analyzed mature market versus the emerging market. In contrast, knowing the brand is more important to purchase in Brazil and is more responsive to advertising. These first findings establish an intriguing research agenda on winning hearts and sales in emerging and mature markets.

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with S. Srinivasan and Marc Vanhuele, Journal of Marketing Research, 47 (4), 672-684, 2010, winner of the 2011 Best Paper Award of Syntec (French professional association of consultants) in Marketing and Decision Sciences.

Full Article

Abstract:
Demonstrations of marketing effectiveness currently proceed along two parallel tracks: Quantitative researchers model the direct sales effects of the marketing mix, and advertising and branding experts trace customer mind-set metrics (e.g., awareness, affect). The authors merge the two tracks and analyze the added explanatory value of including customer mind-set metrics in a sales response model that already accounts for short- and long-term effects of advertising, price, distribution, and promotion. Vector autoregressive modeling of the metrics for more than 60 brands of four consumer goods shows that advertising awareness, brand consideration, and brand liking account for almost one-third of explained sales variance. Competitive and own mind-set metrics make a similar contribution. Wear-in times reveal that mind-set metrics can be used as advance warning signals that allow enough time for managerial action before market performance itself is affected. Specific marketing actions affect specific mind-set metrics, with the strongest overall impact for distribution. The findings suggest that modelers should include mind-set metrics in sales response models and
branding experts should include competition in their tracking research.

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with T. Ambler, B. Clark, P. LaPointe, D. Reibstein, B. Skiera, B. Wierenga, T. Wiesel, Journal of  Service Research, 12 (2), 175-189, November 2009.

Full article

Abstract:
Recent years have seen the introduction of a “marketing dashboard” that brings the firm’s key marketing metrics into a single display. Service firms across industries have created such dashboards either by themselves or together with a dashboard service provider. This article examines the reasons for this development and explains what dashboards are, how to develop them, what drives their adoption, and which academic research is needed to fully exploit their potential. Overcoming the challenges faced in dashboard development and operation provides many opportunities for marketing to exercise a stronger influence on top management decisions. The article outlines five stages of dashboard development and discusses the relationships among demand for dashboards, supply of dashboards, and the implementation process in driving adoption and use of dashboard systems. Key topics for future research include metrics selection, relationships among metrics, and the ultimate question of whether dashboards provide sufficient benefits to justify their adoption.

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with M. Lautman, Journal of Advertising Research, 49 (3), September, 339-359, 2009.

Full Article

Abstract:
How can the importance of consumer wants and needs be quantified? Using data sets from multiple consumer brand and advertising tracking studies, several standard traditional market research techniques are compared to vector autoregression (VAR) modeling. It is demonstrated that by utilizing VAR models and resolving causal ambiguity, key performance indicators can be identified that not only correlate with traditional market research summary metrics, such as overall ratings and purchase interest, but that also drive brand sales/share and thereby qualify as metrics that matter. The analytic philosophy underlying the VAR analytic approach also is shown to be consistent with (and complementary to) market mix modeling analysis. Presented is a procedure for the simultaneous assessment of the relative and absolute impact of multiple marketing initiatives on baseline and incremental sales—including advertising and promotion effects and traditional consumer awareness and attitudinal metrics—facilitating resource-allocation decisions and providing marketers within a single framework for return on marketing investment optimization.

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with Dominique M. Hanssens, Marketing Science, 26 (3), 293-311, 2007, leading article.

Full Article

Abstract:
Even in mature markets, managers are expected to improve their brands’ performance year after year. When successful, they can expect to continue executing on an established marketing strategy. However, when the results are disappointing, a change or turnaround strategy may be called for to help performance get back on track. In such cases, performance diagnostics are needed to identify turnarounds and to quantify the role of marketing policy shifts in this process. This paper proposes a framework for such a diagnosis and applies several methods to provide converging evidence for two main findings. First, contrary to prevailing beliefs, the performance of brands in mature markets is not always stable. Instead, brands systematically improve or deteriorate their performance outlook in clearly identifiable time windows that are relatively short compared to windows Of stability. Second, these shifts in performance regimes are associated with the brand’s marketing actions and policy shifts, as opposed to competitive marketing. Promotion-oriented marketing policy shifts are particularly potent in improving a brand’s performance outlook.

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