Confidence level describes the percentage likelihood that the results of a survey, for example, will fall within a certain margin of error.
For example, suppose you conduct a survey to find out from consumers what color of car they would be most likely to buy at their next purchase. The research firm tells you that 75% of consumers said they would be most likely to buy a red car. They tell you that the margin of error is + 5% with a confidence level of 95%
That means that if the survey was repeated 100 times you could expect that 95 out of 100 times (confidence level) the response would be between 70% and 80% (margin of error.)
Confidence levels are typically provided in conjunction with margin of error. In marketing research, confidence levels of 95% and a + 5% margin of error are standard.
See also Statistically Significant.