Posts Tagged ‘ROI’

Communicators too often out the door in hard times

Monday, March 8th, 2010

I’ve been a regular reader of the New York Times’ Corner Office series, where they interview a senior executive, usually a CEO, about how they hire, how they lead and manage and what they do.  There is a central theme that runs through literally all of these interviews: communication excellence.

Every exec talks about how important communication is to their work — both by them and with them. Of course, there is a bit of the “usual” about that kind of statement. No one would ever say, “communication is not important at all in my work.”  But what I find striking about this observation is that ostensibly, we public relations people are the experts in communication, but get too easily dismissed from the leadership table.  We are welcome during times of crisis (the one time, it seems, that the mahogany row types understand our value) but aren’t regularly consulted about the communication dynamics of decisions.

Additionally, financial pressures often lead to cuts in the communication staff that could help the company deal with the financial issues, particularly internal communication.  It’s a fact that internal communication pros earn less than their media relations colleagues and tend to be lightly regarded. I’ve encountered this in my own career. I feel reasonably comfortable saying that generally, businesses don’t care about internal communication very much at all. They care about “getting the word out” internally, or “making sure we’re all rowing in the same direction.”  But honest improvement in the process of communication within the enterprise? Not so much.

Why?

Some of the issue emerges from a distinct lack of communication curriculum in colleges of business. Marketing, management theory, finance and operations, but no communication theory that could help leaders understand their workers (and customers) better.  More of the blame goes to convenient financial thinking. It’s easier to impose across-the-board cuts than dig into an income statement and excise the real waste, duplication and nonessentials.

One company had a largely decentralized communication structure that permitted significant duplication in communication infrastructure. Some such duplication is inevitable in a multi-national company, but why have 40-something different intranets, run on multifarious platforms? Why not unify newsletter design under a singular brand?  This company really has no idea what it spends on communication, because the units are autonomous — the financials are opaque.

Canada’s Bombardier (a few years ago) published a paper newsletter that permitted regions to wrap their own around the corporate version. All the design elements reinforced the brand. You knew it was a Bombardier newsletter whether you were in Montreal or Dublin, Ireland. That kind of consistency is economical.

How about automating manual processes on the intranet? Sounds like it should be an easy sell, but companies look at the up-front costs and decide to forget it.

I fault us.  As the putative experts, we should have a deep understanding of how moving communications levers will create value for the business.

But too many of us don’t have a clue, and that means, when the going gets tough, we’re the ones who get told to get going…out the door.

The Measurement Debate Continues

Tuesday, February 2nd, 2010

The estimable Shonali Burke has started a fortnightly Twitter chat — #MeasurePR — that begun 2 February, with the equally estimable Katie Paine as first guest. I caught only the last half, which featured good discussion and the usual paroxysm over advertising value equivalency. AVE is bete noir for @KDPaine and @Shonali, who both are categorical in their condemnation of the practice. A couple of participants, however, say that there still is demand on the part of clients for AVE.

The Institute for PR Measurement Commission condemned AVE last fall, AMEC (the professional organization for media evaluation firms) has declared its intent to find a logical replacement, and a recent paper offered Weighted Media Cost as an element worthy of inclusion in measurement programming. Where does this leave us?

I have no stake in this game. My personal belief is that AVEs are bad science, but I’m also sensitive to the need to help clients. AVE is easy for a client to grasp — “if we paid for the space our story ran in, it would have cost us X.”  Katie points out that doctors won’t prescribe a medicine if it’s not right for the patient. AVE isn’t life and death — but what do we do after we’ve explained the drawbacks and negatives and the client still wants it?

I can’t help but put myself in that situation — young company, trying to latch on with a client. Do I tell the client “No. I won’t do AVE” and risk having him/her say, “Well then, I’ll go find someone who will!” ?

#MeasurePR had much more great content than this AVE nonsense, and I really do wish we could collectively move on. I’m done writing about the debate, at least for now.

Looking for a quick way to improve measurement?

Start setting objectives and measuring your attainment of them. Stop worrying about generating lots of eyeballs and do some audience research to reach the right ones. Start looking for correlations between your various communication outputs (and outtakes) and business metrics, such as revenue, cost savings, cost avoidance, time saved, help desk traffic, speed of benefits enrollment, travel system savings, expense systems savings, etc…

Objectives most critical element in measurement

Tuesday, December 1st, 2009

One smart PR pro told me years ago that even the best road map is useless without a destination. Because so many communicators are struggling to understand the role of strategy in a world of fascinating tactics, it can seem like the universe is throwing map after map to us, shouting “you need this right now!”

When I step back from “being strategic” (quite a trick for someone once called, with some derision, “strategy boy”) it is no exaggeration to say, echoing the travel metaphor, that the best strategy is useless without an objective.

Strategic objectives need three things: 1) a benchmark. You need to look back to see where you’ve been. 2) A target. You need to look ahead and see where you’re going. 3) A time period. You need to articulate how long it’s going to take to get from where you were/are to where you want to be.  If you’re missing any of those things, chances are good that you don’t have a strategic objective.

The trick is, too often, we set objectives with no clear understanding of where we are, let alone where we were. That’s where research comes in. It’s right out of PR 101 — start with research before you launch a campaign — and we find lots of reason not to do the research. Sometimes it’s related to cost, sometimes to our own skillsets. We like to think of ourselves as creative geniuses, unencumbered by such trivialities. This attitude is especially prevalent in media relations, where our relationships and seat-of-the-pants skills can mean so much in a crisis; when things go right in our activities, that can reinforce the perception that PR is art, rather than science.

Of course, our “gut” is merely the application of our accumulation of experience, both in terms of time and in terms of education. We think we know what our employees, or our customers, for example, know/think/feel about our organization, when we could remove any uncertainty with some simple research.

But, I digress — the objective-setting process is even more important when considering social media.  Too many organizations are jumping in without a clear idea of what they want to accomplish.  More on this topic to follow.

What about your communication planning process? Does it start with objectives?

Still stuck on AVEs

Monday, November 23rd, 2009

The continuing debate over advertising value equivalency reached the pages of the New York Times 22 Nov., with a “Soapbox” piece saying Hollywood studios are cutting ad budgets and using public relations as an alternative. One anecdote:

Disney recently went so far as to develop a computer program to help it determine how much monetary value was coming from such publicity efforts. It can quickly plug in data — “Access Hollywood” had a 30-second interview with a star of “The Middle,” a new ABC comedy — and the program spits out what that same 30 seconds would cost to buy.

AVEs are a sore spot in PR circles these days.  KD Paine, measurement maven extraordinaire, has campaigned against them for years as bogus figures that don’t quantify the value of media hits. The Institute for PR Measurement Commission (of which I am a member) officially condemned the practice in October, and PRSA has formed a blue-ribbon panel to address measurement generally — looking to a world without AVEs.

I believe there are certain circumstances where AVEs are useful — product publicity, for one, where features and benefits are the subject. But AVEs need to be net of cost, be based on actual charges, not simply “book rate,” and the publication has to be targeted to the specific business need. My example is Goodyear, the tire company. If they get a product review in Road and Track, it’s going to be relevant to their audience, include features and benefits, and in nearly all cases quite similar to an advertisement. What’s unaccounted for is the reader’s perception of value — AVEs are limited by an inability to include the weight of third party independence.

Look, notwithstanding this last paragraph, AVE is a bad metric 90 percent of the time, and there are other ways of evaluating media coverage that are better.

So, why does it appear that so many firms are stuck on this difficult metric? Well, AVEs are simple to understand. Here’s what it would have cost us to buy this time or this space — that’s a lot easier to grasp for a lot of people. There also is the pressure on PR agencies levered by their clients — “I understand you don’t like AVE, but I have to have a dollar figure to tell my CEO, so if you don’t give it to me, I’ll find someone who will.”

Still, I wish that more companies would stop using AVE. Oh, and that more people would understand that PR isn’t limited to publicity and press agentry. Perhaps the best reason not to use AVE is that it doesn’t measure the reputation work that represents most of what PR work is in business these days. For every stunt PR trick, there are months of quiet conversations with centers of influence, months of work on helping employees better understand their industries and organizations, and programs designed to help people grasp the significance of a company’s role in the community. There is more to our profession than being a low-cost replacement for marketing.

Discussions you should read

Tuesday, November 17th, 2009

Several good ones:

Rich Becker — great discussion in the comments on social media concepts…

Brian Solis — Do we need to redefine “influencers?”

Chuck Hemann — What impact on social media use/adoption does organizational culture have ?

Paul Seaman — The Excellence theory says PR is about fostering relationships. Paul disagrees.

Ethics in PR: The Social Media Question

Tuesday, November 10th, 2009

In the political firestorm that engulfs the United States, one side claims the other has no principles, whilst the other claims their opponents show a slavish devotion to ossified beliefs that make no sense in modern America.  Moral relativism, one side’s rhetoric goes, has brought our society to the brink of destruction. Outmoded thinking, the other side’s speaking points read, has made our country a cruel, Darwinist dystopia, where “survival of the fittest” is played out in policy.  For some reason, the ongoing debate of tea parties and new Fascism makes me think about public relations.

The collapse of centralization of news and the growth of social media is fueling a similar decamping in our profession.  On one side, those who believe that social media is an incarnation of evil, bent on destroying the concept of objectivity and authoritative sources, not to mention the homicide of the public relations industry. On another side (there are more than two), those who see social media as the democratization of information and the dissolution of concentrated media power, elevating ordinary people and adding to the diversity of voices in the media mix.

The ethical questions percolating for me these days relate to our role as PR people in participating in social media.  In the sense of the “Excellence Theory,” social media should represent the triumph of two-way, symmetrical communication; active engagement of organizations and their stakeholders, seeking mutual benefit.  But it seems to me that organizational participation in social media is still largely an asymmetrical game of persuasion, of message sending rather than dialogue. Marketers dominate the conversation online, devaluing PR objectives regarding reputation in favor of metrics focusing on revenue generation.  Organizations continue to struggle to find applications for social media inside the enterprise (speaking broadly here; fully aware there are exceptions), as despite efforts to embrace openness and multi-directional communication, command and control is difficult to release.

The dilemma for practitioners is especially acute for agencies and suppliers, and the ad value equivalency debate is an example. AVE has been discredited for years, but is still in common use because many clients demand it. They understand it, and AVE provides a shorthand description that they find useful.  The Institute for PR Measurement Commission recently condemned the practice, with one member writing that just because something is popular doesn’t mean it’s right.  When a client pays an agency and asks for AVE, we should say “no,” goes that argument. But the fear is that, “If I don’t give them AVE, they’ll go find someone who will.”

On the social media side, should all organizations use social media?  What is our ethical responsibility here? I’d be hard pressed to say that everyone should embrace social media.  I cannot make that claim, that is, if I care about giving good advice to my client. It’s not much different than telling a client reflexively that they need an intranet, or a newsletter, or a video. I need to understand the client’s objectives before I jump to tactics.

That doesn’t even address the more serious ethical challenges represented by social media.

Look at the Astroturfing issues, from fake blogs to agency staff commenting on client products.  Is the free market of ideas and caveat emptor sufficient to rein in those who have no compunction about engaging in such tactics?

I have always been an idealist with respect to media, seeing the years between Edward R. Murrow and Watergate as the pinnacle of journalism, heroic reporters, courageous editors and committed publishers digging for The Truth, all with peerless ethical grounding. The disappearance of even the pretext of objectivity in journalism (reaching its zenith — or nadir — with MSNBC/Fox News/The Washington Post/New York Times) has disgusted me, even as I admit that objectivity was a goal, not a reality according to my own journalism professors. We could aspire to objectivity and embrace fairness, something few media outlets now even attempt, at least by my crude measure.

Certainly the outright failure of the trust equation (media, government, business all suffer), should be laid bare here. One must evaluate the media’s biases and objectives, and caveat emptor reigns there, as well.

People determined to do wrong will find a way if their personal ethical compass permits. Maybe that’s the scariest part of all of this. We’re relying on individuals to manage their own ethics in a time when ethics are subjective, not objective, and right and wrong are relative concepts.

Great discussion at [grow] on Social Media dissent

Monday, September 21st, 2009

Mark W. Schaefer writes a great blog, and today there is a terrific discussion there regarding the echo chamber surrounding social media’s expert class, the Chris Brogan, Brian Solis, Julien Smith, Beth Harte, Amber Naslund slate.  Namely, Mark observes that we are lacking strong dissenting voices.

Obviously, there are a few people out there who are refusing to drink the social media Kool-Aid — @amandachapel the most notable.  My own experience with social media as a user is putting me in the class of skeptics, not outright refuseniks, but I have been asking about the value of social media in PR and bemoaning the lack of objective, independent research to evaluate the often breathless claims of its moral superiority.

At the [grow] blog, commenter @tamadear offers this important proviso:

Nobody responds well to “You’re wrong; I’m right” dissent, to those who dwell on our weaknesses. It makes us defensive and unwilling to listen.

This is very true, and is why in virtually all of my consulting (both inside and outside organizations) I always assume that I may be wrong and use language accordingly.  There are far too many pronouncements, baseless and unresearched, in all of public relations, but especially in social media.  I have used the term “self-described experts” many times because I have no visibility into the qualifications of the speaker (or writer). Many of them could be literally anyone, and will even call out their lack of qualifications as a benefit of working with them. From Drudge’s refusal to be called a journalist, to Chris Brogan’s declaration that he is not in public relations, I’m often left wondering why I am supposed to regard these people as authorities.

With a tip of the cap to @amandachapel, it’s “caveat emptor” in the world of communication these days — there is big money to be made (a worthy effort that I share the desire to attain) and precious little objective information to help the consumer evaluate claims.  There are also few best practices that include true outcome measurement of the sort Olivier Blanchard describes in his excellent slide show, “The definitive social media ROI presentation.”  My only beef with the esteemed BrandBuilder is that such end-state ROI calculations performed without care lead to assuming that correlation equals causation.  We would love to see revenue increase and expenses go down concurrent with our social media campaign, but what percentage of the improvement is due to social media and how much due to other factors, including simple continuous improvement?

This is the point of the dissent discussion — for every Olivier and Mark there are five people claiming that the action of participating in social media IS the return on investment. That’s just not going to fly, and the more the experts try to convince people otherwise, the worse off we all are.  The “conversation” MAY be important — it always has been prior to all of this Web. 2.0 stuff — but aside from questionable research by the people poised to benefit the most from its findings, there simply isn’t much data at this point to declare the social media discussion closed.

What’s your view?

Does Social Media Engagement Link to Financial Performance?

Tuesday, July 21st, 2009

Charlene Li of Altimeter Group and co-author of social media book Groundswell, released research that appeared to show a correlation between engagement with social media and a company’s financial performance.  “The study looked at how the 100 most valuable brands — as identified by the 2008 BusinessWeek/Interbrand Best Global Brands ranking — engaged in 11 different online social media channels,” Li’s blog read yesterday.

The research said that the companies most engaged, dubbed Mavens, “on average grew 18% in revenues over the last 12 months, compared to the least engaged companies who on average saw a decline of 6% in revenue during the same period. The same holds true for two other financial metrics, gross margin and net profit.”

Sounds great! Wow!

Only, there are a few folks who aren’t wholly convinced.

Larry Dignan, writing on the Between the Lines blog on Znet, isn’t convinced at all. In fact, he says “Color Me Skeptical,” pointing out that the companies listed as Mavens “haven’t exhibited stellar financial performance in the last 12 months. Starbucks, a maven, has had its margins blown apart by McDonald’s, a wallflower. Dell is quite social, but needs to transform itself in a company that looks more like butterfly HP. eBay? Investors aren’t exactly stoked about the auction site’s growth social media aside. In fact, a lot of the revenue growth is challenged among the mavens.”

Li’s post makes it clear that they’re not claiming the research is causal — but how many people understand the difference? Additionally, I looked for but could not find the R-Squared value for the correlations, which would have given a better indication of the strength of correlation. The report says “statistically significant,” and the chart of the three financial metrics certainly implies strong correlation, at least with the Maven group. The charts on engagement are scatterplots with regression lines in place, but the financial charts are simple bar charts…

And, what of other factors contributing to the higher revenue and gross and net margin figures? The assumption is that social media engagement is responsible for the increase — what if it’s the other way around?  It’s possible that with higher revenue and margin, the companies dedicated more resources (either human or financial) to the engagement effort. The report notes that the higher-engagement groups tended to feature robust teams. Chicken or egg?

Aside from the geeky caviling, I’m by nature quite skeptical of reports such as this (with deep respect, please). Those conducting the research have a vested interest in these conclusions — it really wouldn’t do to show research that says social media has no financial impact when your business depends on the reverse! This area desperately needs additional, scholarly research — using advanced stats to look at as many factors as practical would yield better insights.

For now, I’d pull out the salt shaker before taking this to much to heart.