I’m glad you asked, because they’re on the expanded beta dashboards we’re introducing (shortly). You can get a preview here for now.
First, we track trends, brands and influencers. We refer to these 3 areas as “categories”. Within each category are a series of “sectors”, similar to how the financial market classifies stocks. Within the Brand Category you will find, for example, a Pharmaceutical Drug Brand sector. This sector is composed of peer drug brands. The same holds for how we classify and group auto brands, i.e. in the Brand Category -> Auto Brand Sector -> Honda.
So with that said, what are Sector Indices?
Here’s are 6 sector indices pulled from our new dashboards.
There over 40 different indices in the TrendTopics catalog, one for every sector we track. In the above example, the Financial Services Brands Sector is up+2 points at 92.2. Similar to the Dow Jones Industrial Average (DJIA) or Dow 30, our index is un-weighted and is simply the sum of the current TrendSignal values for all the entities in the sector. Essentially the index represents the sector’s media performance. In the case of our Financial Service Brand example, the sector is composed of 103 unique peer brands. We then calibrate the index so the first period is set to 100. This better facilitates cross-sector comparisons.
That’s pretty much all there is to the calculation itself. Now what does sector index mean?
Think about tides and boats when reading an index value. The entities within the index are the boats while the index itself is a kind of tide. When you’re comparing entities to each other or assessing the media performance of a single entity within a sector, you can look to the sector index value to see if the overall tide is rising or ebbing, i.e. lifting all the entities in the sector, or bringing the overall sector into a decline. An entity gains media share if it consistently outperforms the sector index value.
Indices are just one way to compare a trend or brand within its respective sector. Another approach is to look at both short and long-term growth metrics for the sector and all entities within it using our Growth Quadrant (another element in our dashboards).
Here’s the same Financial Service Brand viewed as a growth comparison chart:
Don’t be intimidated by this growth quadrant as I was when we first developed it for the media dashboards. It shows an entire sector and all its member entities. In this case 103 financial service brands. The horizontal axis is short-term growth (30 days) while the vertical axis is long-term growth (12-months). The units on the chart are TrendSignal points. The important element regarding sector comparisons is the intersecting horizontal and red dashed lines. These represent the average short/long term growth rates for the sector – an average of all the growth rates across all 103 financial service brands.
Here’s the same quadrant with some annotation showing the relative media position of a new entry (Google Wallet) in the Financial Services Brand Sector versus a long standing banking brand, Wells Fargo. You can quickly note the relative differences (both short and long term) between the two brands along with their position versus the sector (or market) averages (denoted by the arrows). A brand’s position in the quadrant determines whether it is Leading, Lagging, Gaining or Falling in its respective sector. Google Wallet is clearly in a sector Leading position while Wells Fargo, due to both declining short and long term growth, is in the Lagging quadrant.
Depending upon a brand’s relative position to these two axes, it is either outperforming or under-performing the overall sector. The only approach to measuring these types of overall media market positions is to capture as many categories as possible, and then ensure that the sectors within those categories are inclusive as many member entities (i.e. brands) as possible. At TrendTopics we’re currently tracking 3 Categories (Trends, Brands and Influencers) over 40 media Sectors which contain 3,000+ Entities.