Les Binet, the head/effectiveness at agency adam&eveDDB, discussed this subject at EffWorks Global 2020, an event held by the Institute of Practitioners in Advertising (IPA), the UK trade body.
“What we found is that share of search can predict market share, sometimes up to a year ahead,” he said. (For more, read WARC’s in-depth report: Les Binet outlines why "share of search" is a powerful, predictive marketing metric.)
His analysis was based on three categories with very different lengths of purchase cycle: automotive, energy (gas and electricity), and mobile phone handsets.
“The good news is we found that, in each of the three categories, share of searches is a leading indicator for market share,” he said.
In practice, that means if a brand’s share of search increases, market share typically rises in the months that follow. Declines on the former metric, by contrast, usually occur alongside a contraction in the latter.
For mobile phone handsets, Binet further ventured, share of search leads market share “by about six months” as a performance indicator - offering marketers a chance to adapt their strategies if needed if a decline is expected.
“If the brand … had access to the share of search data at the time, it would have had a six-month warning that share of market was about to turn around,” Binet said. “That's an incredibly useful metric.”
Share of search’s predictive quality for energy brands, Binet explained, was noticeably shorter, at just “nought to three months.”
For automakers, by contrast, share of search anticipates market share by “nine to 12 months,” he said - a significant timeframe for marketers to potentially refine strategies.
Breaking out data for Volkswagen, the auto marque, provided corroboration that sales forecasts based on share of search “are incredibly close to what actually happened,” Binet said.
Comparing the share-of-search model against “four or five different forecasting methods” yielded more compelling evidence. “Share of search won every time, not just on an annual basis, but on a quarterly basis,” added Binet.
Sourced from WARC