For consumer facing companies, Net Promoter Score (NPS) - measuring customer loyalty and satisfaction - has become a primary KPI in assessing the health of their business. In a three year Harvard Business Review study of the car rental, airline and internet service provider markets, high NPS scores correlated closely with business growth. More companies today are looking to NPS as one of their most critical business metrics. In turn, advertisers are starting to follow suit and measuring the NPS impact from their campaigns has become one of the more promising methodologies to help them understand what their media investment is doing to drive business results.
At Sharethrough we have now worked with a number of advertisers to measure how their native ad campaigns impacted NPS results and have seen some hugely positive results. Not only has this approach helped our clients gain a new insight to the relationship between their media spend and business objectives, but our early exploration has surfaced a unique ability that native ad formats have to impact this key metric.
How NPS Works
Pioneered in 2003 by Bain & Company, the now ubiquitous Net Promoter Score (NPS) system is a simple idea, asking someone to rate on a scale of 0 to 10 how likely they would be to recommend a certain brand or product to a friend. A score between 0 and 6 classifies someone as a detractor - likely to hurt the brand’s value - and a score of 9 or 10 makes them a promoter, a likely advocate of the brand. It has proven to be a versatile metric, honing in on the strength of a brand’s true connection to its customers.
Through our partnership with Kantar Millward Brown, we are able to accurately survey control and exposed audiences across their audience panel to provide our advertising clients with a statistically significant baseline for their NPS score and evaluate their advertising campaign’s impact.
Why it matters: NPS is a strong predictor of business growth
For a brand, having an NPS higher than your competitors correlates directly with market growth. According to research from Qualtrics, the market leader for NPS will outperform its nearest competitor by roughly 200 percent.
The full market picture is crucial. To get this, brands can study their own NPS and the NPS for their main competitors, both for control groups, and for those who were exposed to their ads.
Working with a leading fast moving consumer goods company we saw that while their own NPS score stayed relatively stable, they managed to knock the score of three of their competitors score down by an average of 24 points among those exposed to their campaign.
How NPS compares to traditional brand lift metrics
As the digital advertising industry continues to mature, brands are raising their expectations for their ability to understand the true return on investment from their media dollars. Current brand lift practices still often track rudimentary metrics, such as whether an ad was seen and remembered, which do not provide an insight to meaningful business impact. Basic viewability and engagement metrics are now accurately recorded through modern software solutions such as Moat and IAS, leaving marketers more opportunity to dig deeper into how their ads are affecting consumer sentiment.
Asking someone on a scale of 1 to 5 how favorable they feel toward a particular brand’s ads was always a limited framework. Favorability and ad recall only say so much. NPS on the other hand, is setup to tell you how you’ve impacted your audience’s sense of connection with your brand.
This shift in methodology is particularly important for judging the success of native advertising because of its unique ability to engage consumers in reading a brand’s sponsored headlines and watching their video content. Native advertising is much more akin to content marketing, a form of media meant to spread ideas. And, as a result, KPIs should measure and reflect the same.
Why Native advertising is uniquely suited to help improve NPS
Our work so far has shown us a clear picture: NPS tells a richer story about digital advertising performance than traditional measurement metrics and native ads are proving to be a powerful tool for brands to impact their NPS.
In the classic Don Draper-age of advertising, word of mouth was considered the target metric, because that’s all there really was. It took several decades, but brands finally found a way to measure it via NPS. The only issue being it’s really hard for brands to know how to move the needle around word of mouth.
Enter native ads. You can say how you want people to talk about you, but it is not as tangible as user acquisition. What we’ve found is that content marketing, especially with the direct line to an audience that a smartphone provides, can have a tremendous impact on brand advocacy. Native ads are able to expand on the experience that consumers have with a company to forge a deeper connection, moving them from being a passive customer to a brand advocate, with the help of content.
Native ads are straightforward, they’re read as text and spread an idea at the moment of impression. They seed meaningful ideas and help a brand promote an authentic connection through content to their target audience. NPS is set up perfectly to measure native’s impact, and native in turn is the right tool for brands to achieve their core objectives.