Understanding Context is a key part of Strategy and market share data is the most useful comparative contextual piece of data allowing you to understand who is winning and hypothesise but; its typically only available to those with the deepest pockets buying data from the big research companies. After 6+ years of working with the technique “in the wild” both myself and the Marketing legend Les Binet independently published our research on “the most important metric you’ve never heard of”.
That metric is Share of Search
Share of Search is calculated using the Free to Use analytics tool “Google Trends”
With a few simple adjustments this data source can be turned into a powerful diagnostic data source.
Whilst Les Binet is a qualified econometrician and mathematics genius, I have concentrated on developing techniques that apply this metric to brands and businesses in multiple categories using a combination of Trajectory and trend analysis combined with ratio and relationship mapping in order to provide/provoke a sophisticated picture of a categories dynamics. From seemingly humble beginnings to strategic guidance in relatively few steps.
The following insights and observations seem to hold consistently across multiple categories (including a variety of FMCG product types)
• Bigger brands drive greater levels of search
• SoS = SoM because people search in proportion to how they spend (its value share not volume share)
The benefits this provides to practitioners by this discovery are
• Longitudinal data going back to 2004
• Freely available
• Rolling the data allows for trajectory analysis
• Annual growth rates can be calculated (growth is the key output after all)
• Works for bespoke categories not just standard groupings
Ultimately success in business is relative. Businesses work in competitive markets and so performing better relative to others is the real signifier of success (alongside profitability). Absolute measures such as “Like for Likes” or “year on years” are useful but they lack relativity. A business may have grown year-on-year, but its market share could have declined, suggestive of a multitude of other external and internal effects that point to potential weakness and problems in the future.
Many brands talk about market share, but because it’s a slow-moving measure very few truly engage and understand the causal relationships that drive it. How many brands, for example, measure this as an output in econometrics? The difficulty in analysing market share is understandable given that getting hold of this data is often expensive and difficult to attain for all but the biggest brands and businesses.
This is where the key observation that Share of Search = Share of Market (SoS = SoM) becomes valuable, providing every brand in every country/world, (subject to Google trends consistency of algorithm), with access to an accurate proxy of market share.
There are multiple caveats to any measure and its application but in utilising the techniques I have developed they force you into questioning any outliers, understanding shifts, validating the measure, diving deeply into the category dynamics and becoming more comfortable in what’s happening whilst often the analysis provides practitioners with access to clear foundational data required for developing business cases. In addition we believe there is an opportunity to overcome the survivorship bias inherent in databases like the IPA databank to analyse the loses as well as the winners. The potential is endless.
DMX Dublin panelist James Hankins, (Vizer Consulting), is an ex-agency strategist who’s research and writing helped uncover and popularise the Share of Search measure.
Join us on March 25th to hear James discuss Share of Search on the panel “the most interesting marketing metric you’ve never heard of”. Hankins will be joined by Mark Ritson (Marketing Week Mini MBA) & Dr. Grace Kite (MD at Gracious Economics), facilitated by Shane O’Leary (Rothco Accenture Interactive Media & Performance Lead )
