What’s the margin of error?
As a marketer understanding data and being able to craft it into a meaningful and accurate story is a job requirement. We tend to live into a world of data overload and the margin of error deserves a better understanding than the typical single tiny line you see on most slides. The margin of error is a statistic that expresses the amount of random sampling error in a set of survey results. The larger the margin of error, the less confidence you should have in the polls reported results. Remember, data surveys represent only a portion of the audience population and the margin of error naturally occurs whenever a population is not completely sampled.
For those of us in the US, the presidential election is looming in a few days. The race is close and both candidates are scrambling for any last minute votes they can find. Turn on the news and you can hear any number of polls that back this up. It wasn’t until I ran across
this story hidden on a back page of CNN that I realized how misunderstood the margin of error is.
What I think is the most important line:
The margin of error is what statisticians call a confidence interval. Surveys are taken using only a sample of the larger population and the collected data is used to generalize and abstract information about the larger population. For example, a survey may have a margin of error of plus or minus three percent at a ninety five percent level of confidence. These terms simply mean that if the survey were conducted 100 times, the data would be within a certain number of percentage points above or below the percentage reported in ninety five of the 100 surveys.
In other words, if you were to survey a set of your customers and find that fifty percent of the respondents say they plan on purchasing your product and cite a confidence level of ninety five percent plus or minus three percent. This information means that if the survey were conducted 100 times, the percentage who would say I’ll buy your product will range between forty seven and fifty three percent ninety five percent of the time.
Just remember never to place all your faith in just one poll, survey or data point, whether it’s the presidential election or your marketing plans. No matter what you’re looking at get as much information as possible helps to create the most accurate and relevant picture.