The Value of measurement

What's the ROI on measurement, and who should foot the bill?

What's the ROI on measurement, and who should foot the bill?

Measurement is no fad or buzzword. ROI is king, no pun intended. But in an era of budget cuts, it may be difficult for companies to see why investing in a measurement program is a good move, particularly when no truly consistent standards of PR metrics exist. Companies also take very different approaches to what these programs should do and measure, and who should pay for them. Adopters of measurement programs will often say that in a time when every dollar counts, and every PR campaign has even greater significance, how can you justify not having solid metrics? "If you don't do it, you're flying blind," affirms Tom Galvin, VP of corporate communications for VeriSign, who uses Biz360's Market360 product. Biz360 provides internet-based media analysis systems. For Galvin, as with many others who invest in metrics, the point is not to review past successes and failures, but to let the process inform ongoing strategy. "It's like the Doppler radar for the media environment. If you were a ship's captain, you wouldn't go out without knowing what the weather is like." That sentiment reflects some of the ultimate goals of metrics proponents: to get companies thinking about how data and information should inform planning. The concept has taken hold in a big way, though budget is a concern for companies looking to implement assessment systems. "Even when they understand the need for it, it takes a little bit of time from budget cycle to budget cycle to ease in a new program," says You Mon Tsang, CEO of Biz360. "Another big hurdle is that measurement is still relatively new in PR, and many still don't understand how it plays a role in everyday business." But Tsang points out that 10 years ago, companies were slow to adopt business-intelligence products - compared to now, when they are ubiquitous. "We are seeing the same trend happening in communications." He adds that around 50% of Biz360's prospects are seeking metric systems as a result of a top-down organizational initiative, as opposed to two years ago, when around 25% of clients sought Biz360's services for that reason. That seems to indicate that CEOs, CFOs, and VPs of marketing are demanding measurable results from their PR departments in greater numbers than ever. Part of the package? On the other end of the spectrum, many companies expect their PR agencies to provide these services as part of their investment in the relationship. That has meant that firms have to find ways to answer that need in order to stay competitive. "My business meetings with agencies are markedly different than they were before the downturn," says Angela Jeffrey, VP of the PRTrak division of Surveillance Data. PRTrak has positioned itself as the cost-effective provider of output metrics that deliver data on audience impressions and equivalent ad values. "They say to me, 'We are losing business because other agencies are pitching measurement to prospects, and they are listening.'" Ketchum's David Rockland, SVP and global director of research, says that what clients expect varies. A project the firm did with the state of Florida to educate 650,000 employees on new retirement benefits had a research budget of $1 million to $2 million included. Accountability was a big part of the state's rationale for the investment - a failure to perform on one of its benchmarks would cost the agency its fees. Others expect the firm to provide the data. "You will have clients say, 'We'll give you the business, but we want you to invest in that business,' and sometimes Ketchum's investment will be the measurement program," Rockland says. He adds that more and more RFPs that he sees specifically address measurement. Harris Diamond, CEO of Weber Shandwick Worldwide, believes that agencies have a duty to demonstrate tangible results. "Clients, as part of any type of relationship, expect some terms as to what is a success," he maintains. "Fundamentally, I believe measurement is the responsibility of the agency, to be able to show value." Others believe that, in an ideal world, clients should treat measurement programs like any other agency offering. "Clients should pay for measurement," maintains Lou Hoffman, CEO of The Hoffman Agency. "It's a critical tool for effective PR, and no different than paying for a press tour or a corporate backgrounder." But Hoffman adds that it's easier to set aside 5% of a $500,000 budget for metrics than it is to do so for a $100,000 program. To a certain extent, the larger the budget and risk, the more clients will see the benefits of evaluation. That level of pragmatism is apparent in many firms. "It is very difficult to sell these services to a client in this economy, and it's incumbent upon us to showcase the value," says Alissa Blate, EVP and director of consumer marketing for The MWW Group. One client, Lisa Baxt, communications manager at Nikon, relies on the firm to represent one level of feedback on their marketing efforts, combined with the informal reports they get from dealers and customers. But there are still many companies that embrace and invest in measurement on a number of levels. Bill Margaritis, SVP of worldwide communications and IR for FedEx, says that the company has long invested in metrics to help prioritize and execute programs, including research provided by Harris and Delahaye Medialink. But Margaritis says that measurement also plays a vital role in helping the communications team build consensus and messaging in-house, before taking the message public. "A lot of companies tend to go outside first, and then declare victory internally," he explains. "We look within, and make sure the executive team is really on board, especially using stakeholder research." Margaritis says one of the dangers in a big company is that often executives outside communications will pay too much attention to isolated media hits, and not understand the trajectory and detail of the PR strategy. "It helps us leapfrog the qualitative results in a methodical way," he says. Custom-made measurement Siemens turned to two agencies, Brodeur Worldwide and The Bivings Group, to help the company build a proprietary measurement tool designed specifically to help track its media relations efforts (see sidebar). "There was a significant investment in creating this, including time internally and with the agencies to put it together," says Bud Grebey, Siemens' VP of PR. Previously, he explains, the company did not have a reliable way to fall in step with Siemens' overarching goal to operate as one US entity, instead of 14 separate and unrelated entities. "We weren't very efficient in the way we were doing it before. This helps educate people about what's going on in other parts of the company, and helps us improve our effectiveness." For these companies and others, investing in measurement is not optional. It's part of the fabric of their work. "You can't manage what you can't measure," Margaritis maintains. "Everyone's looking for a seat at the table, and they ought to be looking at measurement for getting to the table and staying there." ----- Siemens: 14 companies, one tool Siemens made a "significant investment" in a proprietary tool to measure the effect of its communications efforts across each of its 14 operating companies in the US. Working with Brodeur Worldwide and The Bivings Group, Siemens Watch, a web-based platform, was completed in January after six months. It takes feeds on Siemens and competitor news from Factiva and eWatch, as well as broadcast data from Delahaye Medialink. Articles are categorized according to their favorability against four core themes that the company aims to convey in all its media activities. The results are mapped out graphically. Also included is a media database, which details previous interactions with reporters. The system is accessible by all internal and external communications staff, and will soon be available to the president of each operating company. The tool's role in helping Siemens shape its communications strategy is far from theoretical. "Our business focus in the US is to operate as one Siemens, rather than a balkanized group of 14 companies," says Bud Grebey, VP of public relations. Results are also directly connected to remuneration. "My team and individuals on my team have specific metrics in their objectives to say that they will increase favorability from point A to point B, and we will have coverage in certain geographical markets increase from X to Y," Grebey says. Their bonuses are tied into these results. "We've put those metrics up for all the internal world to see, so if we're not making it, they will know." ----- What's measurement worth? Angela Jeffrey VP, PRTrak division of Surveillance Data "Agencies tell me they are losing business because other agencies are pitching measurement and the clients are listening, and they almost all don't have budgets." You Mon Tsang CEO, Biz360 "It's almost inconceivable to invest money in a significant program like communications without understanding the results. How would any other department justify its investment without understanding what they are getting out of it?" Harris Diamond CEO, Weber Shandwick Worldwide "I think what clients need to have is the satisfaction and belief that the programs they are rolling out make a difference - that they are impacting sales, reputation, or top-of-mind familiarity." Bill Margaritis SVP of worldwide communications and IR, FedEx "Measurement helps us prioritize and execute our programs; it's a road map to our activities. It also helps build alignment with business objectives, and gives executive management a sense of confidence that we are using a quantifiable process in which to invest our money and time." Bud Grebey VP of public relations, Siemens "It's hard to put a value on PR outside of anecdotal evidence. This way, we can go to our colleagues outside the communications world and say, 'Here's what we are doing, and here's how we track it.'" Alissa Blate EVP and director of consumer marketing, The MWW Group "In consumer marketing, we tend to work with large clients and big brands. It can be very difficult to sell services to a client in this economy, and it is incumbent upon us to showcase the value."

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