Competitive Benchmarking Using Social Media Analytics

See how brands stack up against the competition using social media data

In the Broadway hit song “Everything Old is New Again,” one verse advises “Don’t throw the past away. You might need it some rainy day.” That sentiment certainly applies to competitive benchmarking, which has been around in one form or another since businesses began looking for ways to gain an edge.
It’s a pretty simple idea: compare your firm’s performance against others in your market. Smart marketers have been doing this for decades. You might benchmark against those companies you regularly compete with for sales. Or against those that dominate a market — assuming you don’t. You could call this “aspirational” benchmarking. Or competitive benchmarking can be used to keep an eye on fresh players. Companies that aren’t really competitors yet but could be. With social data, brands can now  benchmark products, audience, and more efficiently and at scale.

Data Defines the Benchmark

The point of competitive benchmarking is to answer two basic questions: “How are we doing?” and “How can we do better?” There are a lot of ways to come at those questions. And, in terms of competitive analysis, social media has given marketers access to enormous volumes of data to slice and dice. Let’s look at some of the metrics that can be measured using social media for competitive benchmarking.

Share of Voice versus Share of Market

Share of market (SOM) is not a social media metric; it’s been around forever. But it’s clearly a metric that says a lot about how your business is doing. Share of market is the percent of total sales for a brand or category.
Likewise, share of voice (SOV) is a traditional metric from the world of advertising. It’s a brand’s percent of total ad spending for a category over a specific period. Traditional SOV is a “one-way” measurement — advertisers talking to the market for their product or service. It tells you nothing about the market’s response to that “voice.”
But SOV has a different meaning in social media. In social media analytics, it would be the share of total posts — likes, tweets, retweets, etc. — about a certain topic or brand. In social media, share of voice could more accurately be called “share of the conversation.” For example, if we’re looking at the general conversation around soda, Coke’s SOV would be the number of posts that reference Coke divided by the total number of mentions about soda, including unbranded mentions.

Measuring Share of Voice

There are different ways to measure share of voice based on keywords. You might put a constraint on the measurement to narrow the conversation. Instead of measuring SOV for the entire conversation about soda, you might want to know your SOV just for conversations that contain Coke, Pepsi, Dr. Pepper, and Sprite.
Of course, the traditional take on SOV can also impact the metric as it’s understood in social media. For example, when Pitney Bowes placed its first television commercial in 20 years on a Sunday football game, it generated a dramatic increase in social media SOV. And that’s a very precise way to measure impact.
Changes in share of voice may or may not correlate with changes in share of market. And even if they do, that doesn’t mean that one caused the other. As Nate Silver points out in “The Signal and the Noise,” correlation is not causation.
But SOV does provide a very good benchmark for how much consumers are talking about your company and what they’re saying. And other types of competitive analysis can tell you why using the same data.

Going Beyond Share of Voice

Using the same data or subsets of it, you can go beyond just how much people are talking about your brand to analyzing what people are saying and how they feel about your brand and the brands you compete with. That’s brand perception.
Without a good handle on how your brand is perceived, it’s tough to market effectively. In fact, there’s an expression for marketing campaigns that don’t have accurate brand perception at their core: “spray and pray.”
There are several ways to approach brand perception in terms of competitive benchmarking. Three of the most common compare brands based on:

  • Products and features
  • Reputation or image
  • Category or industry

Products and Features

Over twenty years ago, the abstract from a research paper for the Journal of Marketing Research noted that, “Companies often introduce new product features to differentiate their brands and gain a competitive advantage.” Of course, this isn’t news. But does it work? The paper presented the results of six studies that tried to answer this question.
What the studies found was that adding new features to a product doesn’t always boost sales or increase market share. It depends on how the products and its features are perceived. If your product is already perceived as superior to its competitors, adding a new feature will have less impact than if people feel your product is inferior to competitors.
Using social media data to see how people feel about your products and their features relative to competitors can help determine whether feature upgrades are worth the investment.

Reputation or Image

If you Google the terms “reputation” and “image,” you’ll find a lot written about how they differ — and not much agreement. Of course, you can define them however you want as long as you’re consistent.
For competitive benchmarking, we’ll use this from a Sloan Review article, that image is “customer centric.” It’s about what a brand promises to its customers. Reputation is “company centric.” It’s about the legitimacy a company has across “a broad set of constituencies, including employees, investors, regulators, journalists and local communities — as well as customers.”
Using social media data to evaluate image relative to competitors can tell you whether the way you’re portraying your brand has real traction in the market. And whether a competitor’s brand may be “drafting” off your messaging.
In terms of reputation, competitive benchmarking can tell you how your company’s reputation stacks up against competitors. Adding historical data, you can track this over time. And you’ll be able to see whether and how events that affect reputation have a trickle-down effect on image.
So, it’s good to keep in mind that reputation and image are not the same, but they do affect one another.

Category or Industry

Another way to look at your brand compared to others is through the lens of an entire industry or category. At the industry level — the 50,000-ft. view — you’ll get a good idea of what matters most to buyers in general. You’ll see what brands have the most mindshare, not just your competitors but everybody.
Once you have that as broad benchmark, you can narrow the analysis to a category. Some marketers divide brands into three types: functional, image, and experiential.
A good example of a functional brand would be automobiles. Functional brands fulfill a functional need. All automobiles share certain characteristics. They’re transportation. They have an engine, wheels, windows, etc. But automakers differentiate themselves into categories: luxury, near-premium, performance, economy and so on.
Category leaders can change the standard for the category. For example, BMW spends heavily on R&D — or at least they want you to think they do. The brand emphasizes luxury, innovative design, and performance in its marketing. It has created a luxury/performance category.

Do You Understand Your Target Audience?

In the late 1970s, the Stanford Research Institute’s (SRI) Arnold Mitchell created the values, attitudes, and lifestyles (VALS) psychographic method to “explain changing U.S. values and lifestyles.” Of course, marketers could not resist using VALS to better understand their target audiences and predict consumer behavior. Advertising Age magazine called VALS “one of the top ten market research breakthroughs of the 1980s.”

VALS is alive and well today. Its mix of psychographics — the classification of people according to their attitudes, aspirations, and other psychological criteria —  and demographics is still highly valued by marketers. The U.S. VALS classifications:  innovators, thinkers, believers, achievers, strivers experiencers, makers, and survivors each have psychological traits that map to consumer behaviors. For example, survivors are risk averse and are loyal to brand and products.

All this is to say that marketers have been searching for better ways to define and understand their target audiences for a long, long time. And social media data can reveal details about your target audience as well as your competitors, which no classification schema can.

If you have the right tools, you can use social media data to better understand the demographics of your audience and their likes and interests (affinities). You may find people who use your product or prefer your brand share some affinities with consumers that use a competitor’s product. But there will likely be affinity differences as well. Understanding the similarities and differences is necessary to create relevant and engaging campaigns. Especially when you’re trying to get consumers to switch brands or products. In other words, you can use competitive benchmarking via audience profiling with social media to hit the marketing sweet spot of your current audience and go after the competition’s.

Topics of Conversation: People are Talking

Another effective way to use social media data in competitive benchmarking is via topics of conversation. You can do this in several ways:

  • Brand to brand
  • Category or industry
  • Culture, politics, or events

Of course, there can be — and often is — overlap between them. Take, for example, the controversy over the national anthem protests before NFL games.

In 2017, there are 35 brands sponsoring the NFL, including big consumer brands like Anheuser-Busch InBev, Barclays, Bose, Bridgestone, Campbell’s, FedEx, McDonald’s, Microsoft, Nationwide, Nike, PepsiCo, Ticketmaster, Under Armour, and Visa. Last year, $1.25 billion of the NFL’s revenue came from sponsors.

Each of those 35 brands could use social media data to learn what their customers are saying about the protests and, if the brand chooses to make a statement about them, how that statement is received.

If you search “Nike NFL,” you’ll find Twitter users claiming they’ll boycott or stop purchasing Nike products because of Nike’s implicit support of the player protests. Using topics of conversation, Nike could evaluate how this issue is affecting its sponsor competitors like Under Armour and how its non-NFL sponsor competitors such as Adidas are leveraging the general issue of social justice.

Net Sentiment: Do You Like Brand X?

Gauging how people feel about a brand is complex. Users of a brand don’t usually declare their feelings in a statement like, “I hate/love [brand name]. Analyzing sentiment requires social listening tools that can interpret the nuances of language. That’s the basis of natural language processing. Some tools go beyond basic positive, negative, and neutral categories to include emotions like anger, fear, disgust, joy, etc. by training the tool with sample data that defines a brand or company’s point of view.

For competitive benchmarking, net sentiment can be very revealing. For example, in the mobile payments category, which got off the ground six or so years ago, consumer sentiment in general was initially very positive. Consumers were bullish about the convenience. But they were less enthusiastic about the number of options and very concerned about security.

Today, some early leaders like Square Wallet are gone. According to Statistica, the top five mobile payment providers as of 2016 were PayPal, Amazon Payments, VisaCheckout, Google Wallet, and ApplePay. Any one of these providers could use net sentiment to find vulnerabilities in the marketing strategy and tactics of the others.

Social Media is a 24x7x365 Focus Group

Focus groups have been around for a long time. Sociologist Robert Merton came up with idea in the 1940s. Merton was asked to find out how Americans were affected by mass communication, especially war propaganda, during World War II. After the war, focus groups were quickly adopted by businesses. In the 50s, focus groups helped Chrysler boost sales of their convertible by changing their advertising to appeal to women.

Focus groups have not disappeared. But as blogger Zuzanna Pasierbinska-Wilson points out, “The emergence of social media now provides brands with unique insight into the minds (and buying habits) of consumers. Brands get an unfettered view of consumer opinion about their products and even competitor offerings by monitoring and analyzing social network data (“social analytics”). Think of it as the new focus group without those paneled walls, water glasses and two-way mirrors.”

Social media analytics for competitive benchmarking is a powerful way to use that “always on” focus group to your advantage.

To learn more about how social media analytics can help you with competitive benchmarking, check out Crimson’s Competitive Intelligence guide:

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