In the competitive world of marketing and advertising, understanding where your brand stands relative to competitors can be invaluable. Enter the concept of “Share of Voice” (SOV).
Though the term might sound complex to those unfamiliar with marketing jargon, it is a fundamental metric that sheds light on a brand’s position within its marketplace.
This guide will break down the essence of Share of Voice, its importance, and the process of its calculation — SOV calculation.
What is Share of Voice (SOV)?
Share of Voice, in its simplest form, denotes the space a brand occupies in the minds of consumers, compared to its competitors. Originally, SOV was calculated based on the amount of advertising spent.
For instance, if a brand spent $1 million on advertising in a market where the total spend was $10 million, its SOV would be 10%. However, with the evolution of the digital age, the parameters for measuring SOV have diversified to include online mentions, social media engagement, search volume, and more.
Why does SOV matter?
Market Position & Brand Awareness: SOV is a direct reflection of how prominent your brand is within its market. A higher SOV indicates that consumers are more likely to think of or recognize your brand, leading to a higher potential for sales and customer acquisition.
Competitive Benchmarking: It offers an objective metric to understand where you stand against your competitors. If a brand has a higher SOV than its competitors, it is a testament to its dominant market position. Conversely, a low SOV can be a wake-up call, indicating a need to ramp up marketing efforts.
Image Source: Brandwatch
Predicting Market Share: Multiple studies have found a correlation between SOV and market share. If a brand’s SOV exceeds its market share, it’s poised for growth. On the other hand, if its market share surpasses its SOV, it may be at risk.
How to Measure SOV: The SOV Calculation
Given the many channels and metrics available today, how does one go about the SOV calculation? While there isn’t a one-size-fits-all formula, the following steps provide a solid foundation:
Define Your Parameters: What constitutes “voice” for your brand? Is it social media mentions? Search volume? Ad spend? Choose the parameters that align with your brand’s goals and market presence.
Gather Data: For each parameter you’ve selected, gather data for both your brand and your main competitors. Utilize tools like Google Analytics, social listening platforms, or advertising metrics from media partners.
Perform the SOV Calculation: For each parameter:
- Calculate your brand’s value. (e.g., if measuring social media mentions, tally the number of mentions your brand received within a specific timeframe.)
- Calculate the total value for the market, including all main competitors.
- Divide your brand’s value by the total market value and multiply by 100 to get your SOV percentage for that parameter.
- SOV (%) = (Your brand’s value / Total market value) x 100
Aggregate and Analyze: If you’re measuring SOV across multiple parameters, aggregate your results to get a holistic view. This can be a simple average or a weighted sum, depending on the importance of each parameter to your brand.
Monitor and Adjust: SOV isn’t a static metric. As the market evolves, so will your SOV. Regularly revisit your SOV calculation to track changes and adjust your marketing strategy accordingly.
Share of Voice, as a concept, offers brands a quantifiable measure of their market prominence. With the modern shift to digital, SOV calculation has become more intricate, taking into account various online and offline metrics. By understanding and leveraging SOV, brands can craft more informed strategies, ensuring they don’t just participate in market conversations, but lead them.
In today’s cut-throat competitive landscape, having an edge, however slight, can make a significant difference. By mastering the concept of Share of Voice and the nuances of SOV calculation, brands can equip themselves with insights to chart a more definitive path to success.
42Signals helps brands understand their Share of Search which can be a crucial component in the exercise of understanding product performances across marketplaces.