Share of Voice
Share of Voice (SoV) is a measure of the market your brand owns compared to your competitors, and could be your secret weapon for growth in the coming months and years.
With all things being equal, a business that has a Share of Voice greater than its Share of Market (SoM) is likely to gain a higher market share in the long run. Why is this? Well, because over time, as you continue your marketing activities, your brand recognition and equity will only grow, affording you a greater market share.
In every market, there will be an equilibrium between your SoV and SoM, which will dictate your position. Gradually as you continue to overspend your Share of Voice, your business will eventually move closer towards the equilibrium, naturally increasing your market share.
Excess Share of Voice
Excess Share of Voice (ESoV) is calculated as Share of Voice – Share of Market. On average, research company Nielson have found that a 10 point difference between Share of Voice and Share of Market leads to 0.5% of extra market share growth.
So, a brand with a market share of 20.5% with an Excess Share of Voice of 10 points would grow to 21% market share over a year.
Of course a number of other factors such as the size of the competition and quality of your campaigns will contribute to your overall success, but the premise remains sound. For those that are looking to grow, you will need to outspend your competition; and there’s no better time to do it.
As your competition looks to review their spending, one of the first expected cuts will likely be to marketing – with many businesses either reducing or pausing their marketing activities.
With a reduced Share of Voice, your competition is naturally likely to see their Share of Market also reduce, as it follows in line with the market equilibrium.
This represents a huge opportunity for your business to increase its share of the market, without needing to increase spend to do so. Simply staying the course, and perhaps even increasing your marketing spend could see your business’ market share improve in the long-term.
This is an opinion held by marketing experts Les Binet & Peter Field, who believe that Excess Share of Voice matters now more than ever when looking to achieve marketing effectiveness.
Binet and Field’s core principles of B2B growth are to build a strong brand, expand the customer base, maximise mental availability, harness the power of emotion, budget for growth, and balance the budget between brand building and activation. Just like in B2C.
Binet has gone on to say: “Advertising does work in B2B… Share of Voice is a relevant metric. How fast a brand grows to a very large extent depends on its share of voice and in particular whether its share of voice is above or below its share of market.”
Increasing your Share of Voice and creating a brand for your business will be one of your key drivers for long-term growth and success.
But, that doesn’t mean that you should ignore short-term tactics completely. Whilst brand building activities will go on to create brand equity and influence future sales, your business will still require a tightly targeted, short-term sales activation strategy that will exploit the brand equity that you have built.
According to Binet & Field’s research, the best approach to take is a 60:40 split between long-term brand building and short-term sales activation.
Combining these two factors, and ensuring a strong marketing budget, will not only help you in the coming months, but also put your business in a strong position to navigate the coming years as well.
A fantastic example of the benefits of working on your brand, and increasing your Share of Voice comes from German FMCG giant; Lidl.
Despite being in the UK since 1994, Lidl had previously struggled to gain a foothold in the British market, with larger brands such as Tesco, Sainsbury’s and Asda taking the majority of the Share of Market.
As Marketing Week columnist Mark Ritson explains in the below Effy case study – Lidl struggled to grow its market share any higher than 3% by solely focusing on the low pricing of its products.
In fact, the business’ low-price offering lead consumers to assume it was low in quality too.
Launching a major advertising campaign in 2014, outspending its Share of Voice led to dramatic changes in the company’s fortunes – increase Share of Voice from 5% to 19%, deliver £2.7bn in incremental sales!
How to improve your Share of Voice
To improve your Share of Voice, we recommend the following tips:
- Go broad – this may go against your first instincts, but using a blanket approach to your brand-building will help to ensure that your business covers all bases. Of course, this does not mean that your business should target its advertising to the entire nation, but rather not get caught up in the slight differences between certain core groups and industries.
- Be concise – when building your brand, you need to communicate your core purpose simply and effectively. A great example of this in action is Morrisons’ ‘Feed the Nation’ campaign, providing all the context you need as to what Morrisons aims to deliver and to who in the current climate.
- Advertise – The main way to quickly and effectively grow your Share of Voice is to advertise. Go big, and go broad.
For years now, digital marketing has extolled the virtues of targeted, ROI-focused campaigns as the only way to be effective online, however, this is not the case.
Due to current events, the majority of the UK has been thrust into an online environment, providing your business with a bigger audience than ever before to improve your brand awareness and recognition, without needing to break the bank.
Social media advertising offers a whole raft of opportunities to build closer relationships with your audience and prospects for a low cost – especially channels such as Facebook and Twitter. LinkedIn can provide organisations within the B2B sector with an opportunity to communicate broadly to potential customers; something that is not always possible in an offline environment.
As well as Social advertising, the Google Display Network provides you with the opportunity to showcase your business on millions of websites across the web, with a host of targeting options to ensure that your brand is communicating effectively with your target audience.
To learn more about how your business can advertise effectively online, and grow your organisation’s Share of Voice, speak to one of our expert marketing consultants today.