Measurement that adds up

PR measurement has come of age in recent years. Now the time has come to compare PR with other marketing - and it's not easy.

PR measurement has come of age in recent years. Now the time has come to compare PR with other marketing - and it's not easy.

PR measurement has come of age in recent years. Now the time has come to compare PR with other marketing - and it's not easy. By Erica Iacono

In an integrated marketing campaign, PR is just one component trying to successfully convey a message. But when a campaign is truly integrated and messages are consistent, measuring the specific contribution of PR can be difficult.

Now, however, developments in measurement and technology, as well as new thinking, are enabling marketers to do just that.

Xerox began using a marketing dashboard three years ago as a way to showcase the ROI for all marketing efforts to the company's senior executives, says Valerie Mason Cunningham, VP of corporate marketing services. "It was clear to us that you can't go and ask for money... unless you can show a return," she says. "You can't show a return unless you have measurement."

Ed Gala, Xerox VP of worldwide strategic PR, explains: "We don't really view it as measuring PR against another discipline. It's more about measuring PR in conjunction with other marketing disciplines and initiatives so that we can get a strong integrated view in how we're doing with all of our strategic marketing and communications activities."

But that doesn't mean that there hasn't been an effort among marketers to evaluate PR's individual contribution to integrated campaigns in relation to advertising, direct marketing, and other disciplines. "The environment is different," notes Mark Weiner, president of Delahaye. "Companies are under a lot of pressure to perform. They put so many resources against marketing that to not answer these questions is a form of malpractice."

Marketing mix modeling, which looks at the presence of marketing in various markets simultaneously, allows marketers to analyze marketing performance based on what works in each marketplace in terms of sales.

"In the past, when people tried to do this, the only way to get information about what was happening in the marketplace was to talk to people," Weiner says. "The trouble is, nobody can remember what they watched on TV last night, let alone what commercials they have seen. There was no way to capture what else they might have been exposed to.

"The cool thing about marketing mix modeling is that rather than beginning with what people remember, which is not much, it begins with what actually happened within the market at a particular time," he adds.

For example, if sales are up in a certain market, it is possible to eventually determine which discipline or activity is most responsible for the increase using regression analysis.

The news that Procter & Gamble used marketing mix modeling to show a better ROI for PR than other marketing disciplines in four of the six brands tested has only added to the interest in measuring integrated marketing, says Katie Paine, CEO of KDPaine & Partners.

"The fact that Procter & Gamble is including PR in its marketing mix measurement... is going to make more VPs of marketing include PR in the mix," she says.

One obstacle to measuring integrated campaigns, she notes, is that the heads of different disciplines within the same company are not always united in measurement efforts.

"The difficulty to this is getting commitment from everybody," she says. "[Marketing mix modeling] is not a new thing. It's just that people still aren't disciplined enough to do it."

Another challenge is the amount of data that is needed. Typically, anywhere from one to two years of data is needed, which is why there are more companies in the midst of this type of measurement than those who have completed it, says David Rockland, partner and global director of research at Ketchum.

"Even a year ago, I don't think that many people were thinking that market[ing] mix modeling and PR go together, and now they do. It's most beneficial to the clients because they can make more intelligent and effective decisions about how they spend money," he says.

 As is the case with the P&G model, which Delahaye worked on, including PR in a marketing mix model can often benefit PR and the company in the long run.

"In every case we've seen, which is two or three dozen, PR delivers the best ROI across the mix," notes Weiner. "PR drives sales much more dramatically in multiples than any other form of marketing."

Gary Getto, EVP of media research at VMS, notes that clients who have included PR metrics in a marketing mix model have also been able to show a more accurate prediction of sales and other business outcomes.

"More companies are seeing that PR is an independent variable that needs to be in the mix," he says. "The more people look at all the factors, the smarter they're going to get."

A marketing mix model is not the only answer for those looking to measure integrated campaigns. Rockland says that very often the problem is that the head of research and head of PR for a company are not in sync. One simple way to start is to add questions about PR efforts to existing attitude and usage surveys. "If you can do that, you can accomplish 90% of trying to evaluate PR," Rockland says.

While incorporating PR in such a model is becoming more common, the concept is still in its early stages. "The state of PR measurement is in catch-up mode right now," he says.

"Five years from now... I would venture that almost any smart marketer will be doing some form of market[ing] mix modeling that includes PR and will also have adjusted their tracking surveys to reflect this broader mix of integrated marketing communications."


The marketing mix model

Who it is for Marketing mix modeling isn't right for every company. Mark Weiner of Delahaye suggests these criteria:

1 Consumer-facing companies in the following categories: food and beverage, fast food, cosmetics, automobiles, long-distance and local telephone providers, financial services, electronics, and entertainment

Companies that have sufficient marketing activity throughout the year

3 Companies that have a significant amount of sales activity throughout the year

How to get started

Companies will need about two years of data: detailed PR metrics, including date, market, outlet, circulation, and "quality" score of the media coverage

The components of a marketing mix model

Marketing activity
All of the company's marketing efforts, e.g., advertising, PR, direct mail, etc.

Information about a specific campaign or tactics

Number of units sold

Amount of money spent on specific marketing efforts

What results when you subtract the cost from sales

Volume of sales in relation to money spent

How much was spent for the volume of sales and/or volume and quality of coverage generated

Return on investment

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