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Demonstrating PR ROI to the CEO




     Katie Delahaye Paine
“If we can put a man in orbit, why can’t we
with any degree of accuracy, determine the
effectiveness of our communications? The
reason is simple and perhaps, therefore, a
little old-fashioned: people, human beings
with a wide range of choice. Unpredictable,
cantankerous, capricious, motivated by
innumerable conflicting interests, and
conflicting desires.”
Ralph Delahaye Paine, Publisher, Fortune
Magazine , 1960 speech to the Ad Club of
St. Louis
Conversations are a company-wide
                resource
He/she who owns social media, owns the brand and he/she with the most data wins




                              Conversations



 Customer         Marketing &       Competitive        Business              HR
  Service            Sales          Intelligence       Analytics
Everything you know about
              measurement obsolete
Old School Communications
   •  The definition of media has changed             21st Century Role
   •  The definition of timely has changed
   •  The definition of reach has changed
       –  GRPs & Impressions are impossible to count (an irrelevant) in social media
   •  The definition of success has changed
       –  The answer isn’t how many you’ve reached, but how those you’ve reached
          have responded

                                      Page 5
Old School Metrics
  •  AVEs
  •  Eyeballs
  •  HITS (How Idiots Track
     Success)
  •  Couch Potatoes
  •  # of Twitter Followers
     (unless you’re a
     celebrity)
  •  # of Facebook Friends/
     Fans (unless they
     donate money)
           Page 6
It’s the end of measurement as we know it
  1 person --Dave Carroll (United Breaks Guitars) cost United $180M—the cost of more
     than 51,000 replacement guitars.
    USO’s donation server crashed when Obama was wrapping care packages
    Procter & Gamble is now paying for engagement, not eyeballs
    Sodexho cut $300K (NET) out of its recruitment budget using Twitter
    HSUS generated $650,000 in new donations from an on-line photo contest on Flickr
    IBM sells more with a $500 podcast than it does from an ad
    11 Mom’s turned around Wal-Mart's image and delivered measureable increases in sales.
    In a week, the Red Cross raised $35 million for Haiti relief via texting
    Mark Stouse at BMC Software reports results in EPS every quarter
    SAP made $1 million from its small business community
    Stanford Univ. measures success on Facebook from applications & revenue
Media Engagement & Online Giving

                                      35,152,789 OTS




                                                       Red line
                                                       indicates media
                                                       impressions
                      6,253,852 OTS
Correlation exists between traffic to the ASPCA web site
     and the organization’s overall media exposure
Exposure drives donations
A measurement timeline



                            Social
     MSM        Online
                            Media

      Eyeball
                HITS     Engagement
     counting
The Engagement Decision Tree

              Consider-
Awareness                  Preference      Trial    Purchase
                ation


                                                    Purchase/
                Observe/                 Engageme
       Find                Participate              Act/Link/
                 Lurk                       nt
                                                      WOM
Measurable Goals for Marketing
            Today
1. Marketing/leads/sales/
2. Mission/safety/civic
   engagement
3. Relationship/reputation/     Or get to this
   positioning
                  To fix this
Goals drive metrics, metrics drive results
            Reputation/         Get the word       Sales
Goal       Relationships             out

            Relationship                        Engagement Index
              scores              % hearing
                                                Cost per customer
                                                   acquisition
            Recommend-
               ations             % believing     Web analytics
Metri
            Positioning
 cs                                % acting
                                                   Sales leads

                                                  Marketing Mix
            Engagement                             Modeling

                           14
Facebook: Correlating MSM, CGM and signups
•  Strong
   correlation
•  Non-negative
   discussion
   only




                                15
The 7 steps to the perfect 21st Century
            Measurement Program
1.  Define the “R” – Define the expected results?
2.  Define the “I” -- What’s the investment?
3.  Understand your audiences and what motivates them
4.  Define the metrics (what you want to become)
5.  Determine what you are benchmarking against
6.  Pick a tool and undertake research
7.  Analyze results and glean insight, take action,
    measure again
Step 1: Define the “R”
•    What return is expected? – Define in terms of the
     business or mission.
•    What problems are you trying to solve?
•    What were you hired to do? What difference are you
     expected to make?
•    If you are celebrating complete 100% success a year
     from now, what is different about the organization?
•    If your department is eliminated, what would be
     different?
                              17
Reach & Influence are not ROI!
•  Revenue minus cost = ROI
•  Revenue = $$ in or $$ not spent     Reach
   – HSUS                              Frequency
      •  Flickr Revenue: $650,000      Hits
                                       Friends
      •  Contest Cost $1000
                                       Followers
      •  ROI = $649,000
   – Sodexho
      •  Twitter costs: $50,000
      •  Cost savings: $350,000
      •  Net savings (ROI): $300,000
ROI = revenue or savings
•  ROI = cost savings                               Reach
   –  + Cost of program                             Frequency
   –  – Cost elimination                            Hits
•  ROI = greater efficiency                         Friends
   –  +cost of program                              Followers
   –  – cost of doing something “the old way” (cost per
      percentage point gained)
•  ROI = greater revenue
   –  +cost of program
   –  –value of leads/sales
How PR Impacts Financial
               Performance
•  Generates Revenue, Sales, Profit
       •  Marketing Public Relations drives sales
       •  Investor Public Relations drives investment
       •  Public Relations drives donations & membership for relevant organizations
•  Drives Efficiency
       •  Better audience targeting
       •  Reaching more people with a credible message for less money
•  Avoids Catastrophic Cost
       •  Quality counsel helps to mitigate impacts of crises
                                                                              20
Measuring PR’s Contribution to the Bottom Line
•  Revenue Generation
   –  Survey customers to determine intent to purchase isolate causal effects
      through statistical analysis
•  Efficiency
   –  Determine comparative cost of different communication approaches;
      calculate percent of target reached; determine change in purchase cycle
      resultant from PR activity
•  Catastrophic Cost Avoidance
   –  Assess competitors and peers who may have faced similar crises, track
      emergence of their crisis and impact on sales, stock price and relevant
      business measures to evaluate the potential impact that was avoided.


                                                                                21
Step 2: Define the “I”
•  Public Relations is not “FREE”
   –  Staff time
   –  Agency time
   –  Social Media costs
       •  Facebook, Promoted Tweets
   –  Senior Staff time
   –  Opportunity cost




                                  22
Step 3: Define your audiences and how you
                impact them
•    There is no “audience.” There are multiple constituencies
•    Should you blog or Twitter? Don’t ask me, ask your
     customers
•    Understand your role in getting the audience to do what
     you want it to do
     –    Raise awareness
     –    Increase preference
     –    Increase engagement


                                23
Step 4: Define your benchmarks
•  Emerging benchmarks
•  Past Performance
•  Think 3
    – Peer
    – Underdog nipping at your heels
    – Stretch goal
•  Whatever keeps the C-suite up at night
                        24
Step 5: Define your Key Performance Indicators
                       (KPIs)
" The Perfect KPI
   
  "   ets you where you want to go (achieves corporate
     G
    goals)
  "    
     Is actionable
  "    
     Continuously improves your processes
  "    
     Is there when you need it
"  
  KPIs should be developed for:
  "    
     Programs
  "    
     Overall objectives
  "    
     Different tactics
                            25
Step 6: Pick a tool

1.  Content Analysis
2.  Web Analytics
3.  Survey
Step 6: Selecting a measurement tool
                 Objective              Tool
                 Increase inquiries,    Web Analytics, CRM,
                 leads, sales, web      Marketing Mix
  ust be:
 M               traffic, recruitment   Modeling
  • Accurate     Increase awareness/ Survey: Online --
                 preference          SurveyMonkey,
  • Complete                         Zoomerang or Mail
  • Efficient    Communicate            Media content
                 messages               analysis
  • Actionable
                 Beat the competition   Competitive media
                                        content analysis
                                        Survey


                                                            27
Why you need a Kick-Butt Index?



•  You decide what’s important:
   – Is it worse to be bashed or not talked about at all?
•  Benchmark against peers and/or competitors
•  Track activities against KBI over time

                            28
What should go into a Kick-Butt Index?
" Positive:
                            " Negative
                               
  " Mentions of the
                             " Omitted
                                
      brand                  "   egative tone
                               N
  "      ey messages
       K                     "   o key
                               N
  "      ositioning
       P                         message
  "      isibility
       V                     "     ncorrect
                                  I
  "      uotes
       Q                         positioning

                       29
Charting KBI over time between
                                  divisions
                             Optimum Content Score Relative to Competitors
                         The Percent Difference Between Each Business Unit's Average Optimum Content Score and the
               500%             Average Optimum Content Score of Tracked Competitors for each Business Unit


               400%
                                                                              Patriot (Korea)
                                                                            European MD radar
               300%


               200%                                                                                                                        SAS
% Difference




                                                      AESA                  ASAT, Patriot
                       FBX-T                        for F-15E,                                     MALD,                                   IDS
                                                                   Glory APS and
                              DIB                   Army MTS                                      AMRAAM        APG-63 (v3)                IIS
               100%                 DDG-1000 MSE                     VIIRS vs.                                              RIS JPL
                                                                  competitors' EPX                              ATFLIR                     MS
                                                                                            RISS, GBS

                 0%


               -100%                          APG-79, APG63                                 ERGM cancellation
                       ALR-67(V)3                                VIIRS delays                                    NPOESS; BOE B-52 jammer
                       Jul      Aug    Sep    Oct     Nov        Dec     Jan     Feb        Mar     Apr     May      Jun      Jul

                                          2007                                                     2008
Components of a Relationship Index
•    Control mutuality
      –  In dealing with people like me, this organization has a tendency to throw its weight around. (Reversed)
      –  This organization really listens to what people like me have to say.
•    Trust
      –  This organization can be relied on to keep its promises.
      –  This organization has the ability to accomplish what it says it will do.
•    Satisfaction
      –  Generally speaking, I am pleased with the relationship this organization has established with people like me.
      –  Most people enjoy dealing with this organization.
•    Commitment
      –  There is a long-lasting bond between this organization and people like me.
      –  Compared to other organizations, I value my relationship with this organization more
•    Exchange relationship
      –  Even though people like me have had a relationship with this organization for a long time; it still expects something in
         return whenever it offers us a favor.
      –  This organization will compromise with people like me when it knows that it will gain something.
      –  This organization takes care of people who are likely to reward the organization.
•    Communal relationship
      –  This organization is very concerned about the welfare of people like me.
      –  I think that this organization succeeds by stepping on other people. (Reversed)
Step 7: Analysis - -Research without insight is
                    just trivia
•  Look for failures first
•  Check to see what the competition is doing
•  Then look for exceptional success
•  Compare to last month, last quarter, 13-month
   average
•  Figure out what worked and what didn’t work
•  Move resources from what isn’t working to what is
                         32
Actionable Conclusions
           Ask for money
      Get Commitment
  Manage Timing
           Influence
decisions
      Get Outside help
 Just Say No33
Best Practices:
•  Correlations to bottom-line impact          •  Benchmarking against your peers
    –    Donations                                  –  Looking at what the best do
    –    Memberships                                –  Setting goals accordingly
    –    Sign-ups                                   –  Use data to persuade recalcitrant
    –    Leads                                         spokespeople
•  Using data for planning                     •  In Crisis
    –  Define the time frame, market/topic          –  Listen instantly to a wide range of
       you want to study                               influencers
    –  Use Google News to identify the              –  Identify weaknesses in
       conversations around the topic                  communications, customer service,
                                                       or in the product
    –  Analyze the conversations for type,
       tone and positioning                    •  Improve your reputation
    –  Look at share of positioning, tone or        –  Listen first, then respond
       conversation                                 –  Stop doing stupid things
Budgeting Considerations
•  Measurement should average 3-7% of a total PR budget, based
   on research by USC Annenberg
•  Ask client to use existing survey and tracking resources often
   available through consumer insights or market analytics
   department
•  Start with your local University and become a project for them




                                                                35
Resources to Get Started
•  http://www.instituteforpr.org/
•  PRSA Measurement Toolkit
•  “Measuring Public Relationships: The Data-Driven Communicator’s Guide to
   Success,” by Katie Delahaye Paine, Published by KDPaine & Partners
•  “Measuring Social Media,” by Jim Sterne, Published by Wiley
•  “Primer of Public Relations Research,” by Don W. Stacks, Published by
   Gilford.
•  “Evaluating Public Relations: A Best Practice Guide to Public Relations
   Planning, Research and Evaluation,” Second Edition by Tom Watson and Paul
   Noble, Published by Kogan Page
•  “Unleashing the Power of PR: A Contrarian's Guide to Marketing and
   Communication,” by Mark Weiner, Published by Jossey Bass
•  “
                                                                          36
Thank You!
Questions?