WPP's Millward Brown is joining with sibling Kantar Shopcom to explore what some have called "the dark side of the moon" in market research: What does it really mean for sales, pricing and profitability when people like a brand?
To find out, the WPP units are merging data from Millward Brown's brand-equity tracking surveys with Kantar's 80-million-member database of shopper loyalty-card data into a single-source database of around 250,000 people. The new panel will look at how shifts in brand equity -- essentially how many and how much people like brands and are loyal to them as determined by their answers in tracking surveys -- actually affect purchase behavior such as how much and often people buy products, and for what price.
The idea is to look not just at what happened in the past but also to track changes in brand equity and analyze the individuals and segments that make up a brand's consumer base as a means to also predict how creative work and media plans will affect brands' sales, pricing power and profits, said Ann Green, senior partner-client solutions at Millward Brown.
She expects clients to use the new single-source panel most often to evaluate cross-media effectiveness and planning and to project how copy-test results will affect sales.
Use of single-source panels mashing data on media exposure and sales isn't new. Nor is testing by various research firms to broadly validate that their testing methods actually predict impact on sales. But the Millward-Shopcom panel aims to go several steps further in looking at small groups of individuals and particular brands, not just historically, but also to make projections about how marketing plans will affect sales and other financial metrics.
In testing the offering earlier this year, Ms. Green said, Millward conducted a large cross-media study to project the value and volume a combination of marketing tactics contributed directly to the bottom line, for example through TV advertising that increased units sold by nearly 60% and the price paid 50% by consumers exposed to it compared to similar consumers who weren't.
"Marketers and researchers have been looking at aggregated relationships between research results and business performance," Ms. Green said. "This solution allows you to get down to the respondent level. So for an individual, I can know their belief system about a brand, their relationship with a brand. I can know what they were exposed to or what their reaction to a piece of creative was. And then I can understand for that person what they're actually doing in the store."
By looking at brand equity, the WPP offering has potential for answering a question that decades of research on advertising effectiveness hasn't addressed well: how much sales are impacted by relatively small changes over time in the size and degree of loyalty among consumers who buy brands almost automatically, said one research-industry veteran.
These brand loyalists account for 50% to 70% of brand sales, he said, with impact from advertising and promotion generally targeting marketing's "swing voters," who account for the other 30% to 50%.
There are some caveats to consider, said another research industry veteran, including the additional load that more research studies may place even on a panel as large as 250,000, and the quality of the data source in using shopper-card data, which may not always have full geographic coverage and which excludes people who primarily shop at such retailers as Walmart, dollar or club stores that don't collect or don't share shopper purchase data.
Both executives declined to be named because they work or recently have worked with WPP or Kantar competitors, but both saw the new single-source panel as a potentially valuable tool.
Ms. Green declined to name clients who've been working with the single-source panel. Among major Millward Brown packaged-goods clients are Unilever, Kimberly-Clark Corp., KraftFoods and Coca-Cola Co., according to the companies or industry executives. Coke, in particular, has had a keen interest in recent years in how changes in brand equity affect sales and other financial metrics, said one of the industry executives. A K-C spokesman said the company hasn't used the panel.
By better quantifying the long-term impact of marketing in building brand equity or loyalty, the system could elevate the standing of marketing broadly by better quantifying its financial impact, Ms. Green said.
"We are now getting clear indications of how important brand equity is ," she said. "And you can then put it on the desk of all the stakeholders of an organization, so you can go to the [chief financial officer] and say, this is what my brand equity is worth and is contributing to the business, ergo I need you to invest in marketing."
