P&G manages what it has measured

Market mix modeling gave a view into the function, and the vision to change.

In 2004, Charlotte Otto set out to do what they said couldn't be done: to measure the effectiveness of PR (or, as known in Procter & Gamble idiom, external relations or ER) in driving brand sales. Otto, the now-retired global external relations officer at P&G, lobbied for budget to attach a communications module to the company's existing market mix modeling.

The pilot program tested six brands in the beauty, healthcare, and family categories in the US. The results were stunning - in three of the brands, ER demonstrated the highest ROI. In the remaining three it was second highest. "We always felt accountable, but we didn't have the tools to back it up," Otto told PRWeek. "It's no longer a matter of saying, "trust us."

Back when PRWeek reported on P&G's breakthrough metrics, I was reminded of that old joke about the dog fruitlessly chasing cars. Even if it caught one, would it know what to do with it? Having caught meaningful data about the effectiveness of communications in its teeth, P&G was not at that time drawing glib conclusions about the implications.

PRWeek duly asked for proof that the data would lead to greater PR spend. It would have been so easy to say "yes" to such a loaded question, but P&G wouldn't take the bait. "The results lead to a question the company is still trying to figure out: whether it can scale to make PR a larger part of the mix, and still retain the ROI," PRWeek reported. "'How do we optimize that?"

Seven years later, P&G is refining and integrating external relations, henceforth to be known as communications, under Mark Pritchard, global marketing and brand-building officer. The function will focus on brand PR, corporate communications, and consumer relations.

What happened between 2004 and today? Well it's obvious. Social media exploded, and neat categories and silos have been forcibly upended. The corporation that is P&G no longer stands apart from its brands in the minds of consumers. "Technology is giving us 24/7 real-time information, we're all totally connected, people expect transparency and want to know more about our company and our brands and the people behind them," Pritchard told PRWeek last week. 

Not long ago a change like P&G's would have drawn loud protests that PR was being subsumed by marketing. But so far at least, the reaction has been matter-of-fact. The communications role in today's world grows organically within organizations that recognize its value. Scaling PR happened because the world changed, not because P&G tracked positive results for the discipline. It's always been difficult to grow PR in a big way vertically alone, through larger levels of engagement with individual brands. Instead, it has also moved across the organization, linking the formerly (and in P&G's case, very separate) disparate needs of corporate and marketing communications.

Will other companies follow suit and radically reformulate their comms structure? It depends on how well they know what communications is already doing. After seven years, we must be due for another other major brand data breakthrough. But despite our great romance with data these days, insight into the effectiveness of communications is still a mixed bag.

In the coming week, I will talk to some analytics experts about the state of the art in PR metrics, and market mix modeling in particular - stay tuned.

 

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