One Marketing Metric to Rule Them All? Group Believes It Has One. Lengthy Test Across 100 Brands is a Step Toward Linking Marketing to Cash Flow
The Marketing Accountability Standards Board (MASB) has developed a method to measure brand value and predict movements in market share. Jack Neff, writing for Advertising Age, analyzes this “Brand Choice” metric.
MASB was established seven years ago by a coalition of academics, market researchers, and marketers. It recently concluded Phase I of its Brand Investment & Validation project. MASB tested a “Brand Choice” metric based on surveys of approximately 500 people per brand. These consumers were asked to select among several competing brands in a category as if they were winners of a prize drawing.
According to David Stewart, Marketing Professor at Loyola Marymount University in Los Angeles and MASB chair, “We believe by linking this Brand Choice metric to some pretty simple metrics like market share, price premium and distribution coverage, we can actually generate estimates of future operating cash flow, which allows you to get at the value of a brand.”
He also pointed out that this is the first time the Brand Choice Metric has been studied across such a broad array of brands in consumer packaged goods and automotive.
Phase II of the project involves comparing how the MASB’s metric compares to other brand valuation and evaluation models. MASB will also study what factors reliably drive its Brand Choice metric – including marketing spending, advertising quality, and social media. Study parameters are still in development, and will likely take 18 months to test. As a result, Mr. Stewart doesn’t expect results until 2018.
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