Excess share of voice (eSOV) is an important concept in marketing and media investment planning. The “excess” represents the degree to which your brand’s share of voice exceeds its share of market. Numerous studies have examined this relationship and consistently found that an excess share of voice over share of market is likely to result in brand sales growth.
ESOV was originally identified by John Philip Jones a hybrid marketing practitioner-academic who looked at a number of relationships between marketing and media investment and sales responses.
Here’s how eSOV works. If you have a 10% share of market (SOM=market share) and a 12% share of voice (SOV=share of category adspend) then your eSOV is +2. Jones was able to estimate the statistical relationship between eSOV and sales using panel data.
This relationship has been used by marketing planners for around twenty-five years. It’s a relatively easy concept to grasp, communicate and evidence with data. Most importantly, it’s a marketing argument that many boards are prepared to give a hearing and accept.
In recent years the marketing effectiveness specialists Les Binet and Peter Field have re-examined this relationship and added some interesting findings about how the eSOV concept is impacted by creativity.
But, as with many marketing concepts, there is some devil in the detail. There are five big points that are often overlooked but which should still be considered as part of the marketing planning and budgeting processes.
First – not all categories and advertisers behave in the same way when it comes to eSOV.
Second – SOV and SOM calculations often exclude companies than don’t advertise – think Google, Facebook or Tesla – brands that grew with little advertising support in their early years. They gained share of market through product advantage.
Third – eSOV tends to work much better when the excess share of voice is carrying award-winning creative work and vice versa.
Fourth – you need to think about the relationship between the required SOV and the impact on profits.
Fifth – Jones recommends using econometrics to fully understand how eSOV works as a component driver in your marketing mix. SOV or eSOV may not be the only explanatory variables in your mix. You will need to understand the contribution of all drivers to make valid statements about eSOV.