Why Focusing on Share of Voice is Critical for Brands
5 MIN READ
Consumers and buyers today are fickle and time poor.
It doesn’t matter whether you're a B2B or B2C brand, a high-growth tech company or a national charity – if your creative and content focuses on the wrong topics, or the wrong channels, then it will fail to engage.
In fact, when brands talk about their key competitors – and we see this regularly with clients – they will typically look only at who has the lions’ share of spend, rather than at who is dominating the conversation.
It’s this that can be the downfall of market leaders. It’s easy to do “busy work” – creating heaps of SEO optimized content, or creative campaigns, that people simply fail to engage with.
Brands need to tell prospects something interesting or relevant to catch their attention - a unique perspective to cut through the noise.
Here’s a quick definition:
Share of wallet is how much a specific customer spends on a brand relative to its competitors.
Share of ad spend is how much a specific brand spends on advertising compared to competitors.
Share of voice is how much a brand is able to shape the conversation around certain key topics.
Share of engagement is how much consumers are sharing and engaging with the content a brand creates.
Ads Don’t Equal Sales
There is an important distinction here to be made between share of wallet and share of ad spend. In fact, a brand can invest heavily in ad spend, and gain neither share of voice nor share of wallet.
We have seen this happen with brands that receive significant funding to enter new markets, or launch new products, and essentially "splash the cash" by spending advertising dollars (or euros, or pounds) without due attention to message or channel, and essentially wasting the investment.
PepsiCo Crystal: In 1992, PepsiCo launched Crystal, a clear cola beverage, backed by an advertising campaign featuring Van Halen's "Right Now" song.
But despite the hype, the product failed to stand out in the market, with consumers finding it not different enough from regular cola. Critics blamed the gimmicky advertising for its failure to engage customers.
Casper Sleep: Despite heavy investment in advertising, Casper, a startup mattress brand that went public in 2020, struggled to gain significant market share. Its advertising campaigns failed to effectively communicate the benefits of its products, and the company faced stiff competition from established players in the mattress industry.
WeWork: Once considered a hugely promising startup, WeWork's overly aspirational advertising campaigns failed to effectively communicate the practical benefits of its services. Additionally, scrutiny over its business model, which relied heavily on long-term leases and high occupancy rates, ultimately led to the company's decline and failed IPO.
WePay: A B2B payment processing platform acquired by J.P. Morgan & Chase, invested heavily in advertising to small and medium-sized businesses but struggled to differentiate itself from established players in the industry. Ultimately, WePay was acquired to help J.P. Morgan expand its presence in the payment processing market.
One way to make more of your marketing budget is by focusing on share of voice (SOV), the proportion of advertising that a brand has in relation to its competitors in a given market or industry.
However, many brands still fall into the trap of solely focusing on share of wallet (SOW), the proportion of a customer's spending that goes to a particular brand or company, and as a result, miss out on valuable insights that could help them stay ahead of the game.
In 2023, share of voice is no longer about the size of your ad budget, but instead about how you can dominate the conversation.
You could argue that this has always been the case. But in 2023, as more advertising dollars are spent online, and peoples’ buying decisions are heavily influenced by digital and social media, advertisers’ ability to monitor those conversations at a macro-level, and make informed decisions, is greater than ever before.
Why Share of Voice Matters
While share of ad spend is an important metric, it only tells part of the story. A high share of ad spend indicates that a brand is focused on capturing attention and building awareness, which is essential for attracting new customers and increasing market share.
However, a brand may be spending a lot on advertising but not necessarily converting those efforts into sales. By focusing on share of voice and share of engagement, brands can gain a better understanding of their brand's visibility and awareness among consumers, using that information to improve their marketing strategies and increase their market share.
The Dangers of Focusing Solely on Share of Wallet
Focusing solely on SOW can lead to complacency and an over-reliance on existing customers. Established brands that have a high SOW and market leadership may become complacent, thinking they do not need to invest as heavily in advertising and marketing. They may also fail to notice smaller, more innovative competitors that have a disproportionate share of voice because they understand the importance of storytelling and having a unique perspective.
This can result in missed opportunities for growth, as newer, more agile competitors can quickly gain market share and erode the dominance of established brands.
Brands that Focused on Share of Wallet and Missed the Mark
One example of a brand that became complacent due to market leadership and missed the importance of storytelling is Kodak.
Despite being a leader in the photography industry for decades, Kodak failed to recognize the disruptive potential of digital photography and missed the opportunity to innovate and adapt. Smaller, more agile competitors, such as Canon and Nikon, quickly gained market share by offering more innovative products and solutions.
Another example is Blockbuster, which had a high SOW in the movie rental industry. However, they failed to notice the rise of new competitors like Netflix, which had a much higher share of voice due to their innovative business model and unique perspective. Blockbuster was slow to adapt to the changing market and eventually went bankrupt.
Stop! Listen to Customers and Competitors
To stay ahead of the game, established brands need to listen harder to customers and competitors.
In today's digital age, customers have more power than ever before, and their opinions and feedback can shape the direction of a brand's marketing efforts. New tools such as Brew, which measure share of voice and engagement levels, are giving smaller, newer brands insights that may leave established leaders lagging. By listening to their customers and competitors, brands can gain valuable insights into the needs and preferences of their target audience and adjust their marketing strategies accordingly.
For example: if your competitors are running a large number of webinars, or focusing their ad budget on LinkedIn, consider whether you can beat them at their own game – or perhaps - try something different?
Equally, if your competitors are all talking about predictive AI, to pick a topical example, do you pick the same topics, but do them better (e.g. by having SEO baked into your content creation process)?
Or do you pick a different topic, a subset of the topic, or a new angle on the topic, that reflects your own brand personality and product or service offering?
Final Thoughts on SOW vs. SOV
Focusing on share of voice is critical for brands that want to achieve sustained growth and stay ahead of the competition. While share of wallet is an important metric, brands that solely focus on SOW may miss out on valuable insights that could help them adapt and stay relevant in a rapidly changing market.
By listening to their customers and competitors, and investing in creative thinking and storytelling, brands can gain a better understanding of their market position and use that information to drive growth and increase market share.
The problem is this: if you don’t know who’s dominating the conversation online, or what they are talking about, your content strategy and ad messaging will always be a shot in the dark.
Is that a risk you can really afford to take?
For a trial of Brew, or to find out more about how BH&P used a range of insight tools to build out a new content and social engagement strategy for a challenger brand in unified communications, get in touch.