Performance Branding: Valuable knowledge advantage thanks to Big Data analysis

Companies want and need to shape their future. But how can they do this if they don't know the customers of the future? If they are not sure whether today's competitors are actually tomorrow's? Most CMOs and brand managers agree on this: Reliable data is needed to make trend-setting brand and marketing decisions. A good gut feeling and primarily experience-based knowledge are no longer enough.

When gut feeling becomes a trap

Many companies make decisions for tomorrow's markets based on yesterday's knowledge of customers and competitors. In 2015, for example, Swatch CEO Nick Hayek laughed at the new Apple Watch and was convinced that the hype would soon be over. Five years later, Apple generated more than twice as much turnover with the smartwatch as its entire Swatch Group, namely 9.5 billion Swiss francs. It has been proven that the Swiss watch industry thoroughly overslept its entry into the smartwatch business. Would access to up-to-date data on customer needs have helped to set a different course?

Fast, shallow information vs. complex in-depth analyses

The question is where this data should come from. Until now, those responsible for marketing and brand management have had to choose between superficial information at the touch of a button or in-depth, laboriously collected data. The monitoring of individual social media channels or sentiment analyses provides up-to-date images of sentiment and information about brands or marketing-relevant topics. These images are helpful, but only show individual sections.

Performance marketing dives one level deeper and provides data on effective customer behavior and the effectiveness of marketing activities in the selected channels. What performance marketing cannot determine, however, are the causes of the effectiveness of these measures, the correlations and important details about the resonance of the brand, the consideration of its credibility or differentiation power.

Compared to performance marketing, conventional market research is significantly more complex and slower, but provides in-depth insights into customer attitudes and behavior. Focus groups and surveys provide details and background information. However, the findings are inherently a reflection of the past because the answers are based on the experiences and habits of the respondents; memories and self-reflection are recalled. It is therefore possible that the picture communicated by the interviewees in the interview deviates from reality.

One example: Sustainability is important to more and more people. Almost everyone would agree with this in a market research interview. But how consistently do we act accordingly? How often do the cheap steaks from the discount store end up in the shopping cart instead of organic meat from sustainable farms?

Performance branding: understanding behavior instead of evaluating surveys

Performance branding is a new method that closes a long-standing gap in data provision and analysis for brand decision-makers. With performance branding, all data available online about a brand, customers and competitors and their activities is collected, analyzed, processed and linked to "human intelligence", i.e. brand strategy expertise, and interpreted with the help of AI-based big data analysis. For example, a study by BrandTrust, in which over 100 mineral water brands were analyzed using the performance branding method, revealed surprising results regarding the relevance of sustainability. The evaluation of around
300,000 texts from over 180 different data sources revealed that for Generation Z, also known as the "Fridays for Future" generation, cool bottle design is ultimately more important than sustainability aspects or regional origin.

The overall strategic picture and the individual backgrounds

Conventional market research methods and the new, AI-based brand analysis world are not in competition with each other. After all, they ultimately pursue the same goal: decision-making reliability in marketing and brand management in times of disruptive market upheaval and rapidly changing customer needs. Cleverly combined, they complement each other as complementary approaches and form a superior unit. Because the weaknesses of one system are the strengths of the other.

Performance branding provides the big picture, uncovers correlations, keeps an eye on developments and places them in a larger context. For the BrandTrust study, AI-based big data analysis was used to determine both the causes and the status quo of the attractiveness, competitiveness and brand strength of over 100 brands in an industry in just a few days. The immediate availability of the analysis results makes developments visible more quickly and gives brand decision-makers a great deal more agility and decision-making security.

Market research, on the other hand, scores with detailed insights through targeted questions and finely selected or broad and representative samples. Specific hypotheses can be individually queried and validated. Decision-makers receive concrete answers to highly individual questions.

2.5 million data points analyzed by seven algorithms

The data sources for performance branding are not only the well-known social media channels, but all information available online - i.e. all data points from comments, likes, forum visits or other analyzable data traces. In the BrandTrust study, 2.5 million data points were analyzed by seven specially programmed algorithms.

However, the prerequisite for this is that people leave traces on the Internet. Traditional market research also includes customer assessments that are almost impossible to capture online. Very small or specific groups of people, such as professional buyers, can also be surveyed in a targeted manner.

Ideally suited for understanding Generation Z

The digital-savvy community is particularly important for brands that want to be attractive to younger generations. For example, a bank can use a performance branding analysis to quickly gain an overview of how relevant its own brand is compared to the competition per generation. Building on these findings, background information can be further developed in a targeted manner through supplementary market research.

Performance branding does not dictate anything, but recognizes who is interested in which brand or which topic. With a performance branding analysis, Mercedes might have realized earlier that they are actually competing with Google, Uber or Share-Now rather than BMW among tomorrow's customers. Performance branding analyses can also provide valuable insights into the relevance of the brand among potential employees for HR departments that need to ensure an attractive employer brand.

The potential for "A Perfect Match"

While market research works with clear and individual questions, performance branding incorporates all the data that has been collected and can be analyzed into the analysis. In future, brand decision-makers and CMOs will therefore be able to incorporate current snapshots into a time and market analysis and thus give the results a strategic context. Performance branding therefore does not stop at information gathering, but becomes a management tool for effective brand management.

Cleverly combined, performance branding and traditional market research save companies a lot of time, money and resources. Coordinated with each other, they ensure that you are at least one step ahead of the competition thanks to superior market knowledge.

* Benedikt Streb is a Senior Brand Consultant at BrandTrust and has been working on the measurability of brand success since 2014. His industry focus is on financial services and M&A, pharmaceuticals and the technology sector.