THE AGENCY BUSINESS: Measurement and strategy are the foundation of GCI's future

Seeking the key to overcoming financial woes, GCI Group is determined to become a strategic partner that can better serve clients and then offer measurable ROI to show the value it brings.

Seeking the key to overcoming financial woes, GCI Group is determined to become a strategic partner that can better serve clients and then offer measurable ROI to show the value it brings.

After nearly two years of declining revenues and shrinking margins for large multinational PR firms, GCI Group CEO Bob Feldman decided earlier this year that it was time to take a long, hard look at the PR business in general, and his firm's business specifically. One of his first steps was to hire Debjani Deb, a former Booz Allen & Hamilton consultant, as the firm's director of strategic planning. With a Stanford and MIT education, as well as a background in management consulting and strategic planning, Deb focused on digging deep into the nuts and bolts of the PR industry. She spoke to GCI clients, executives, and other industry watchers. So what did she find? "[In the PR industry], value comes from bringing out-of-the-box thinking to the table consistently," says Deb. "The commodity side of the business has been pushed further and further into trading away their margins." By "out-of-the-box" thinking, Deb means the "strategic" thinking that big firms are always talking about - well at least to PRWeek. That means being a full partner with a client's corporate communications by helping to develop sophisticated answers to daunting marketing and communications problems. In short, this remains the part of the business for which clients are willing to pay a significant premium. When Deb says the "commodity side of the business has been trading away their margins," she means that what PR execs usually call the "tactical side" of the business - the arms-and-legs support to a campaign - has lost much of its pricing power in recent years. Indeed, much of large agencies' future appears to rest on the strategy side. So what's a firm to do in this environment? GCI is now focused on several initiatives, including to change the culture of its firm and the structure of its offerings. Perhaps the most interesting undertaking involves delving into its clients' businesses as never before. "It's not like we didn't try to be smart about knowing our clients' business last year," says Feldman. "We're simply saying it must be taken up five notches. That requires a deep understanding of how clients make money. For instance, where are the margins in a client's business? How is their pricing influenced? How is share price influenced?" According to Feldman, this means investing in educating his current workforce and hiring people from backgrounds outside of the industry - including some MBAs and sector experts. The hope is that GCI will then have a business knowledge and expertise that exceeds its competition. The firm calls this initiative "business analytics," and says it is based on a five-step program designed to better service and pitch accounts. The five steps are company analysis; industry analysis; looking at the client's objectives; developing a quantified solution set; and creating a measurement program. While the first three steps seem rather self-explanatory, the final two may be where the ultimate allure for clients will lie. The firm now believes it's imperative that it measures nearly all of its service offerings. "We want to approach our clients and prospective clients with a deep understanding of their business, the industry, and the problems they face," says Deb. "Taking that into account, we want to translate that into a measurable solution. So it's not enough to say, 'I'm going to do this.' We would very much like to say, 'I'm going to do this and that will gain you this.' Which will be followed by a very structured measurement program to live up to the goals we set out for ourselves." Deb says that GCI realizes that although it would always like to be able to point to ROI, finding a clear roadmap to that point is still an uphill battle for most of the industry. Still, that should not derail all attempts at measurement. "It doesn't always have to be ROI. In many cases ROI is very difficult to measure, and I should know because I spent months trying to come up with ROI on many projects," explains Deb. "It's not a trivial problem. But our approach has been that it doesn't have to be ROI in every case, but it has to be something measurable." ----- GCI's 'business analytics' GCI's "business analytics" approach initiative is based on five steps.
  • Conduct company analysis. An in-depth look at a client's business model.
  • Conduct industry analysis. An in-depth look at the state of the client's industry.
  • Examine the client's objectives. Help the client decide how it wants communications to drive its business.
  • Develop a quantified solution set. Develop a metric that will help measure the successfulness of a program.
  • A measurement program. Measure the program using that metric. "It's not enough to say, 'I'm going to do this.'" says GCI's director of strategic planning Debjani Deb. "We would very much like to say, 'I'm going to do this and that will gain you this.'"

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